Tag Archives: suburban Chicago

Q1 2018 Office Insight: A tale of two markets

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Q1 2018 stats for the Downtown Chicago office market

Two roads are diverging in Chicago, as evidenced by first quarter’s mind-boggling 35.2 percent spread between Class A and Class B asking rents downtown. While the triennial property tax assessment pushed landlords of choice properties to raise rents to record highs, they’re controlling the sticker shock with substantial concession packages.

Tenant improvement allowances are up by an average of 33 percent in the CBD over the past five years, something “that’s really moving the needle for tenant decision,” JLL Managing Director of Research Christian Beaudoin recently told Crain’s Chicago Business.

Construction costs rose 3 percent last year, there’s more than 7 million square feet of product under construction and landlords are competing aggressively to land tenants. These factors are fueling tenant demand for TI dollars, which will be applied toward building out creative, highly amenitized spaces in configurations ranging from traditional to progressive (like GGP at River North Point).

While financial services and law firms are shedding excess second generation Class A space, those vacancies continue to be offset by suburban relocations (including McGraw-Hill and AdTalem Education), particularly to the West Loop. Leasing activity has already reached more than 45 percent of last year’s total volume, a roaring start to the year bolstered by the urban migration trend.… Read More

Retail therapy draws tenants to suburban Class A product

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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.

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Top 10: Trump’s unexpected impact on suburban Chicago real estate

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TrumpOur Suburban Tenant Representation team recently hosted a webinar exploring how President Trump’s policy changes could impact suburban Chicago real estate.

“With vacancy near 10-year lows, strong tenant demand and robust investment activity, the suburbs continue to be a value story with as much as a $20 per square foot rent differential compared with downtown,” said JLL International Director Andrea Van Gelder.

As the new administration takes shape, the suburban market and its well-balanced economy could be affected in good, bad and surprising ways.… Read More