The Downtown Chicago Office Market held steady during the third quarter as gains realized from new tenants entering the market and the growth of existing companies were offset by an overall move toward more efficent office designs.
This according to the latest Jones Lang LaSalle Chicago Office Insight report, which was released earlier this week.
Here are some of the other key findings:
5,630 square feet were absorbed in the third quarter bringing the year-to-date total to 625,000 square feet. The lower absorption was mainly driven by movement in the North Michigan Avenue submarket and more specifically, by the American Medical Association (AMA) move, which contracted by 76,000 square feet when it moved to 330 N Wabash.
At $31.94, the average asking rents for the CBD increased $0.05 PSF and recovered the small decline experienced in the second quarter. Average asking rent for Class A space increased by $0.26 PSF to $36.67. Class A spaces in the River North and West Loop submarkets continue to demand the highest rents in the CBD market.
With absorption remaining flat the total vacancy rate held steady at 15.3 percent. At the building class level, vacancy in Class A space increased 70 basis points to 14.5 percent and Class B declined 70 basis points to 16.3 percent. The shifts in A and B vacancy were also heavily influenced by the AMA move. We track 515 N State as Class A and 330 N Wabash as Class B so when AMA moved, 350,000 square feet was returned to the Class A market and 274,000 square feet was absorbed from the Class B market.
The Hines development at 444 W Lake Street called River Point is still in its first phase, which includes overbuild of the site. The law firm McDermott Will has signed a lease for 225,000 square feet and another law firm, DLA Piper, is in-lease for 200,000 square feet of low-rise space.
To read the full report, click here.