The Northwest Corridor continues to have the region's highest class A vacancy rate. The class A availability did, however, decrease from 30.2% in the third quarter to 29.2% by the end of the year. “Leasing activity rose to 402,006-square-feet in the fourth quarter as Flexera Software inked a 75,000-square-foot lease to relocate to 300 Park Blvd., Itasca, and ATS and Canon Business Solutions sublet 41,332-square-feet and 22,552-square feet, respectively, at 425 N. Martingale Rd.” However, the landlord there still has more than 150,000-square-feet to fill.

But the high vacancy rate has attracted some investors who believe suburban office buildings in struggling submarkets have a great deal of potential. Glenstar and Walton Street Capital, for example, bought the Continental Towers at 1701 W. Golf Rd. in May for $58.5 million and last quarter secured their first new tenant, signing an 18,342-square-feet lease with Rational Cooking Systems. And Zurich Insurance acquired more than 30 acres at the former Motorola Solutions campus in Schaumburg, where it will build a new North American headquarters.

The North Corridor's class A availability also fell during the fourth quarter by 80 bps, from 26.6% to 25.8%, according to Studley, although this was still higher than the 24.8% rate at the end of 2012. “Class A asking rents rose during the quarter by 0.7%, increasing to $25.39 per square foot,” the firm added. The largest suburban lease in more than a year was signed in this submarket when Zebra Technologies consolidated from Lincolnshire and Vernon Hills by subleasing and then extending Aon's 230,000-square-foot lease at 3 Overlook Point in Lincolnshire.

Many of the office centers in East-West Corridor towns like Oak Brook and Naperville remain attractive to tenants, and have driven a healthy-level of leasing activity. During the fourth quarter, the class A availability rate fell to 21.9%, down from 26.6% just one year ago. “Class A asking rents rose by 1.2% to $24.26-per-square-foot in the last quarter,” Studley found.

Middough Inc., an international engineering services company, for example, recently signed an early extension of their existing lease, originally set to expire in 2018, for 68,748-square-feet at 700 Commerce Dr. in Oak Brook. The building had “all the attractions of being in the suburbs in terms of cost,” said Robert Sevim, executive managing director of Studley's Chicago office. In addition, “you're not far from Chicago, you're not far from the airports,” and the highly-educated workforce needed by Middough is just at hand.

The O'Hare submarket also exhibited some strength in the final quarter. Although class A asking rents remained unchanged at $27.01-per-square-foot, the availability rate fell by 150 bps to 19.5% during the fourth quarter, Studley found. The Big 10 Athletic Conference completed one of top deals in the submarket by selling its former headquarters and moving into its new built-to-suit headquarters facility at 5420 Park St. in Rosemont's MB Financial Park.

Deals like this have led Studley officials to believe that the suburbs “remain relevant and are beginning to show signs of life.” They admit that the improvement remains gradual, but “in an era where the overwhelming attention is paid to corporate relocations to the city, the underlying facts contradict that theme.”

The firm analyzed 31 leases for more than 20,000-square-feet and found that 15, totaling about 1.9 million-square-feet, involved companies moving within the suburbs. Ten of the leases, totaling about 1.3-million-square-feet, involved firms moving downtown. “Increased investment sales activity and CAP rate contraction in the suburbs lead us to conclude that those pundits proclaiming that the suburban markets are fading toward extinction were premature in their assessment.”