Shopping on your lunch hour never gets old. Especially in the suburbs, where the live/work/play perks of urban density are in short supply. Suburban malls offer the opportunity to run errands during lunch, while also conveniently supporting a wide array of business amenities such as restaurants and event space for everyday meetings and larger corporate gatherings.
Across suburban Chicago, Class A office properties within a mile of a major mall are outperforming their competition in three out of four major suburban submarkets. While the area around Woodfield Mall appears to be flagging, JLL Research attributes that to Zurich’s relocation and expects occupancy to soon mirror the strength of its peers.
Expert: JLL Senior Vice President Karla Harmon, one of the leasing agents at Commerce Plaza.
Perfect for: Eastern East-West Class A is perfect for a wide variety of companies, from healthcare to financial services to food companies, and we’re seeing expansions across the board. At Commerce Plaza, we recently had Treehouse Foods expand and recommit to more than 140,000 square feet.
Shop ‘til you drop: Proximity to Oakbrook Center is huge for companies, client-facing businesses in particular, offering clients and employees (both local and those in for training) the ability to walk across the street for a quick bite or some closet restocking. I tell prospects, “It’s 90 steps to Nordstrom,” not to mention a host of restaurants, hotels and movie theaters.
Prediction: Owners will continue to invest in their buildings, adding amenities and pushing rents. This is the tightest market we’ve seen around the mall in the past decade, in fact we’re more than 97 percent leased at Commerce Plaza. I expect demand to stay strong, with walkability a top driver.
Expert: JLL Senior Vice President Rick Benoy, one of the leasing agents at O’Hare Plaza.
Perfect for: For O’Hare Class A, one of the top attractions is proximity to the CTA Blue Line. The O’Hare market is the only suburban office market with that kind of transit access, drawing the highly coveted downtown employee base. Adjacency to the airport also benefits companies that require national and global connectivity.
Shop ‘til you drop: While O’Hare Plaza is slightly east of Fashion Outlets of Chicago, Rosemont’s Class A office buildings directly surrounding the mall have definitely seen an uptick in activity from this discounted luxury mecca, as well as the restaurants, entertainment and hotels of MB Financial Park.
Prediction: Class A in the O’Hare submarket will remain strong and I expect to see vacancies dropping even further as the market continues to tighten. No new spec development on the horizon bodes well for the next few years.
Expert: JLL Senior Vice President Norm Murdoch, one of the leasing agents at Two Century Centre.
Perfect for: Schaumburg Class A attracts all kinds of tenants: financial services, engineering, professional services, etc. It offers easy access to O’Hare, strong workforce demographics and appealing surrounding suburbs for company executives.
Shop ‘til you drop: Woodfield Mall is ground zero for the Northwest and where office has traditionally located—easy access to the Higgins four-way interchange is key. It’s a tale of two extremes around the mall, with both the oldest product in the market and the best of Class A, leading to a diverse group of tenants and a range of rental rates.
Prediction: Near-tem, the Northwest will outperform. We’ve completed 60,000 square feet of new leases at Two Century Centre in the past four months and are tracking considerable activity at Zurich’s former headquarters, Schaumburg Towers.
North (Cook County)
Expert: JLL Executive Vice President Dan Fernitz, North market expert.
Perfect for: This Class A product is located off a four-way interchange on the Edens, it’s just south of the city limits and there’s strong building visibility (i.e. branding opportunities) from the highway. The highest-profile properties, including 5215 Old Orchard and Old Orchard Towers, attract both financial and professional services firms.
Shop ‘til you drop: Westfield Old Orchard has the benefits of a true lifestyle, outdoor shopping center. Unlike other malls that only offer new outfits, Westfield’s differentiators are movie-theaters, high-end brands, trendy restaurants and outdoor mall-walking that can’t be beat.
Prediction: I expect this micro-market within the North market to stay strong with consistent interest from tenants. There is a divide between the Class A product and the older building stock, but those value-add opportunities won’t be realized unless buildings trade and new owners reinvest.