CBRE is tracking that Chicago has the second largest percentage of big block space available in the nation at 11.2 percent. Big block space is defined as listings of 100,000 square feet or greater.
However, while that number may be accurate, companies looking for quality big block space available in the CBD will actually find that their choices are extremely limited…if they even exist at all.
“A little deeper dive into the numbers behind this data would show that almost half of these blocks are in new office developments, with top of the market rates and with projected delivery dates of 2017 or later,” said Michael Kazmierczak, Senior Vice President with CBRE. “The other half of the counted blocks can be found in existing buildings, and a large portion of those are currently occupied by anchors that have committed to relocate to a new development. Delivery dates for those existing blocks are dependent upon timely moves into new construction, which isn’t a perfect science.”
In other words, for firms looking to occupy big block space in the next 18-24 months, the options are pretty thin, said Kazmierczak. Moreover, not all big blocks are created equal.
“The majority of firms looking for big blocks in the market today want their space to come with large floor plates as opposed to a large vertical stack. In other words, a typical 100,000-square-foot user today is more likely to prefer a two or three floor stack as opposed to five or six,” said Kazmierczak.
He also emphasized the importance of the building itself having high-quality amenities including spaces with lots of natural light and air, along with a wide variety of food and beverage choices on-site. Finally, the building must be in a vibrant location with convenient access for the rapidly evolving CBD workforce.
One large block that checks all the boxes is the 3rd, 4th and 5th floors at River North Point, which provides an opportunity to assemble up to 200,000 square feet. “There simply are no other opportunities like this in River North, and, very few in the CBD.” said Kazmierczak. “For companies that cannot afford to wait for existing space to come vacant in a few years, or space in new developments, the market is very light on quality options.”