CHICAGO—The Chicago region's office market has gotten off to a good start in 2018. The opening of several new trophy towers since 2016 has not had an adverse impact on the overall vacancy rate, which continues to fall. It now stands at 16.9%, a drop of 50 bps since the end of 2017, according to a new report on the first quarter by Newmark Knight Frank. And metro net absorption hit nearly 620,000 square feet, a significant jump over last year's first quarter total of 462,000 square feet. Furthermore, average asking rent increased from $27.42 to $29.09.
“The metrics are all pointing to a strong 2018,” Amy Binstein, research manager of NKF, tells GlobeSt.com. “We're seeing signs already.” The metro area's investment sales, for example, reached $1.2 billion by the end of February, according to Real Capital Analytics. Last year, the market did not cross the billion-dollar threshold until May.
A handful of major deals that just closed account for the high investment volume. Starwood Capital Group bought 1 S. Dearborn from Olen Commercial for $360 million, and Sterling Bay purchased 600 W. Chicago, the home of Groupon, from Equity Commonwealth for $510 million.
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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.
