CHICAGO—The sale of the Riverway complex in the O'Hare submarket is another reminder of the strength of significant portions of the suburban market. Blackstone just sold the 869,120-square-foot Rosemont complex to Adventus Realty Trust for $175 million, according to Crain's.
The class A vacancy rate for the class A office properties around O'Hare was at a relatively low 13.6% at the end of the second quarter, according to Colliers International, a drop of 10 bps from the first quarter. And rents in the submarket, especially for class A, are headed up. By the end of the last quarter, average gross asking rents stood at $31.03 per square foot, up from $29.56 one year ago.
A similar pattern can be seen in many suburban submarkets. The average gross asking rents for class A assets throughout the suburbs rose to $28.60, up from $27.63 last year, according to Colliers. Furthermore, “class A assets were the strongest sector ending the first half of 2016 with 147,072 square feet of net absorption, compared to negative 42,447 square feet at mid-year 2015.”
Overall vacancy in the suburbs fell to 18.1% in the second quarter, its lowest level since the beginning of the recession, according to Colliers.
And with the class A market tightening, and rental rates increasing, it's likely that the Riverway complex won't be the last big suburban sale this year. One Pierce Place, a 578,737-square-foot complex in Itasca just west of O'Hare, has been up for sale as well. And Colliers reports that at least ten suburban assets traded hands in the second quarter.
Fulcrum Asset Advisors, for example, completed its $78.5 million acquisition of a three building, 484,328-square-foot portfolio at Parkway North Center in Deerfield, and Imperial Realty bought Concourse Office Plaza, a 294,073-square-foot asset in Skokie, for $30.5 million.
“In addition, at least three properties over 500,000 square feet are expected to come on the market in the third quarter,” Colliers says.
CHICAGO—The sale of the Riverway complex in the O'Hare submarket is another reminder of the strength of significant portions of the suburban market. Blackstone just sold the 869,120-square-foot Rosemont complex to Adventus Realty Trust for $175 million, according to Crain's.
The class A vacancy rate for the class A office properties around O'Hare was at a relatively low 13.6% at the end of the second quarter, according to Colliers International, a drop of 10 bps from the first quarter. And rents in the submarket, especially for class A, are headed up. By the end of the last quarter, average gross asking rents stood at $31.03 per square foot, up from $29.56 one year ago.
A similar pattern can be seen in many suburban submarkets. The average gross asking rents for class A assets throughout the suburbs rose to $28.60, up from $27.63 last year, according to Colliers. Furthermore, “class A assets were the strongest sector ending the first half of 2016 with 147,072 square feet of net absorption, compared to negative 42,447 square feet at mid-year 2015.”
Overall vacancy in the suburbs fell to 18.1% in the second quarter, its lowest level since the beginning of the recession, according to Colliers.
And with the class A market tightening, and rental rates increasing, it's likely that the Riverway complex won't be the last big suburban sale this year. One Pierce Place, a 578,737-square-foot complex in Itasca just west of O'Hare, has been up for sale as well. And Colliers reports that at least ten suburban assets traded hands in the second quarter.
Fulcrum Asset Advisors, for example, completed its $78.5 million acquisition of a three building, 484,328-square-foot portfolio at Parkway North Center in Deerfield, and Imperial Realty bought Concourse Office Plaza, a 294,073-square-foot asset in Skokie, for $30.5 million.
“In addition, at least three properties over 500,000 square feet are expected to come on the market in the third quarter,” Colliers says.
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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.
