CHICAGO—As reported in GlobeSt.com, the office market in downtown Chicago hit a rough patch in the first quarter, and according to MBRE, the suburbs also experienced a bit of a letdown. Although the suburbs saw 1.3 million square feet of positive absorption in 2014, in the first three months of this year the market recorded just 117,766 square feet of absorption. Still, the vacancy rate shrank slightly to 20.38% from 20.54% at the end of last year. And rental rates in some areas are climbing to heights not seen in years.
In fact, “the North, O'Hare and Northwest submarkets each experienced a double digit rate of rental growth year-over-year with the North submarket commanding 24.1% higher asking rates than just four quarters previous,” MBRE says.
The North suburban submarket at 18.01% is the only one with a vacancy rate below 20%. All that empty space has so far discouraged developers launching new multitenant office buildings. But many have concentrated on build-to-suits in order “to keep construction going in the face of these challenges.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
