Chicagoland Suburban Office Vacancy Continues to Rise
According to industry data, space reductions or departures have boosted overall vacancy within the suburban real estate market to 23.6 percent in the third quarter, up from 20.6 percent in the previous quarter. This is the highest mark since the second quarter of 2014. Data shows that the resulting vacancy jump was the highest single-quarter increase by percentage points since at least 2000.
More companies are searching for higher-quality buildings, equipped with improved amenities—a push geared towards attracting and retaining the millennial work force by offering a healthy balance of work and play. JLL data shows that Class B buildings have lost almost 575,000 square feet of occupancy in the third quarter, whereas Class A buildings lost only a little under 157,000 square feet.
As we see the market move toward buildings with better amenities, many owners have upgraded properties to remain competitive in the market. This, in turn, increased asking rents to an average of $25.13 per square foot in the third quarter, up from $25.02 in the second quarter. A recent Crain’s Chicago Business article highlighted how Retail Properties of America spent $9 million to improve amenities and common areas at the former Zurich North America headquarters in Schaumburg, Ill.
Suburban office landlords are also experiencing reduced numbers of prospective tenants. This is brought on by major companies making the move to the city as they look to attract more young talent. The suburban marketplace has responded by sprucing up town centers around Metra stations to attract office development and allow for easy access to those residing in the city.
Whether you’re looking for commercial real estate in the suburbs or downtown Chicago, Bespoke stays on top of industry data to ensure your space serves as a key component of your business development strategy. We accomplish this through providing resourceful problem solving and skilled negotiation to deliver customized real estate solutions that help with recruiting, retention and growth.