The Chicago suburban office market remains on a roll, recording its 16th consecutive quarter of positive absorption in Q3 2015, with some submarkets recording Class A vacancy lower than the CBD, according to CBRE research.
In Q3 2015, the total net absorption was 184,786 square feet, which is up 166,060 square feet from the previous quarter. This activity brings year-to-date positive absorption in the suburbs to 394,212 square feet.
Class A space has been the real winner, with the overall vacancy rate back to pre-recession levels at 13.3 percent. As a result, landlords have continued to push rents to $26.59, also a pre-recession measurement.
Some Class A markets, such as the East-West Corridor, are outperforming CBD Class A space, recording vacancy rates of around 11 percent.
“In a tightening labor market, tenants are increasingly focused on high-quality space with premium amenities,” said Jeffrey Mann, Senior Vice President with CBRE. “The best-located class A buildings that have invested in amenity and common area upgrades are attracting more interest from tenants and realizing higher rental rates.”
Some of the class A highlights include:
- Accertify vacated 30,349 sq. ft. at 901 Hawthorne Dr. and relocated to 2 Pierce Pl in Itasca, expanding to 40,451 sq. ft.
- Baxalta, the new company that was created after the spinoff from Baxter International, occupied the whole building at 1200 Lakeside Dr. in Bannockburn.
- The North Suburban had the strongest net absorption in class A, recording a positive 121,316 sq. ft. for the quarter.
Since the beginning of 2012, the suburban market has posted 3,817,227 square feet (or 66.7 percent of total activity) of positive net absorption versus the CBD market total of 1,904,948 square feet in that same period.
The job story has been very positive as well. Job growth in the suburbs has accounted for 74 percent of the region’s office-using job growth since 2011. Since the beginning of 2011, the suburban market has added 72,111 office-using jobs, while the CBD market has added 25,280 office-using jobs.