Suburban Office Vacancy Rate Rises

CHICAGO—The suburban Chicago office market has long suffered from a high vacancy rate, and in the first quarter, that number climbed to 21.2%, up from 20.3% at the end of 2013, largely due to the decisions of several corporations to move downtown and the decisions of others to shrink their footprints, according to Colliers, which recently published its overview of the first quarter.

“While there continues to be improvement in certain pockets of the market, tenants in the suburbs are still acting conservatively,” the researchers note. Too few are ready to make the long-term commitments needed to create a healthy market, and many suburban landlords are still offering aggressive incentive packages. “Tenants are taking advantage of current concessions and finding that they can move into higher-end, class A space without significantly increasing their total operating cost. However, these prominent class A options are beginning to diminish.”