Large users target I-88 corridor

December 8, 2010

The East-West Corridor has experienced increased leasing activity as 2010 comes to a close, and with a high vacancy rate, commercial brokers believe that the market is poised to land several large users that are looking to take space in 2012.

The corridor recorded an office vacancy rate of 23.7 percent in the third quarter, slightly up from the previous quarter.

The biggest deal in the corridor, if not the entire Chicago market, was the much publicized move by Navistar to relocate its headquarters to a 1.2 million-square-foot former Lucent facility in Lisle. The corridor experienced some other positive office transactions, notably Graycor’s 36,000-square-foot lease at 2 Mid America Plaza in Oakbrook Terrace, Treehouse Foods 48,000-square-foot lease at 2021 Spring Road in Oak Brook, Dental Network of America’s 58,317-square-foot lease at 701 E. 22nd Street in Lombard, and Redbox’s 20,000-square-foot expansion of its current lease at the Oakbrook Terrace Tower.

Yet these are the highlights. The majority of activity in the corridor has been consolidations, which has led to continued negative absorption.

“A lot of the moves have been consolidations,” says Andrea Van Gelder of Jones Lang LaSalle. “It might be a while before we see true positive absorption.”

That absorption may come next year, as a slew of big firms are set to either renew current leases, or, sign new leases for 2012. A few of these firms are now outside of the East-West Corridor, but it is well known that they are all looking for potential options in the market.

“Firms are out looking around,” says Van Gelder. “They still have the luxury of time.”

Some of the bigger firms looking for class A space are Wilton Industries, RR Donnelley, Harris Bank, and JP Morgan Chase, says NAI Hiffman’s Dan O’Neill. Read more

Posted by NAI Hiffman | Filed Under Industrial, Market Information, Office 

Suburban office, industrial show signs of improvement

August 18, 2010

Suburban Office Market Summary

Quarter in review
The overall vacancy rate among the suburban office submarkets continued its climb for the 7th consecutive quarter, reaching 23.5 percent at the end of June, up slightly from 23.4 percent last quarter and up more than a full percentage point from the 22.4 percent recorded a year ago.

Suburban office vacancy rates are currently the highest they have been in well over a decade. Demand, as measured by net absorption, remains weak throughout the market. Cumulative net absorption for the first half of the year totaled negative 394,423 square-feet, despite increased leasing activity. While this is an ongoing negative trend, it is an improvement from last year, when net absorption for the first half of the year totaled negative 1.3 million square-feet.

Although vacancy rates continue to rise and demand remains limited, there have been positive signs in the market. The investment sales market, nonexistent during 2009, has picked up during the first half of the year. Similarly, increasingly confident large companies have started hiring again and are actively looking for additional space. These companies are taking their time, however, as options are plentiful, rental rates are low and leasing incentives remain attractive for tenants. Read more

Posted by NAI Hiffman | Filed Under Industrial, Market Information, Office