While today’s sensationalized headlines have led to some natural jitters across the suburban office landscape, a deeper dive into the numbers reveals a market on the rise and experiencing significant economic growth. More than 50 suburban business leaders joined JLL, the Schaumburg Business Association and the Federal Reserve Bank of Chicago, along with additional sponsors MECU and Rabine Group, last week to discuss the impact of global economic conditions on Schaumburg and the surrounding suburban submarkets.
As a leading indicator, commercial real estate helps us predict what the future holds for the U.S. economy, JLL’s Mark Kolar said. Most major international markets are on the positive side of JLL’s Global Office Property Clock, above, indicating rental growth in both burgeoning and mature markets. The clock has completely flipped since 2009, and Chicago continues to see “rational” exuberance, with building trades at sustainable values.
Chicago’s upswing has translated into falling vacancy across suburban submarkets, with most in the below-20-percent sweet spot that hasn’t been seen in more than a decade. Rental rates are also increasing as tenants grow across a diverse group of industries. With this continued local business expansion, no signs of overspending by investors and stable global real estate demand with measured growth, suburban activity should continue to tell a stronger story than the headlines allow.
View Chicago Fed senior economist Rick Mattoon’s economic outlook presentation below: