CBRE Analysis Finds Chicago Life Sciences Market Poised for Growth

Chicago is one of the nation’s leaders for employment in the life sciences industry, but startups and research and development firms in this sector may have a difficult time finding lab space as the city boasts the lowest vacancy of any primary market, according to a recent report from CBRE.

While many U.S. industries are navigating fundamental disruption, the life-sciences industry – which includes pharmaceuticals, biotechnology and medical-device manufacturing – is on a long-term expansion track.

Chicago is primed to benefit from this industry’s growth, as the market has seen strong gains in employment and National Institutes of Health (NIH) funding in recent years.


Largest U.S. Life Sciences Centers by Employment

However, as employment and funding have increased, available lab space is difficult to find. Currently, the market boasts a less than two percent vacancy, the lowest of any primary market that CBRE tracks.

“Chicago is well-positioned for future growth in life sciences thanks to its large cluster of pharmaceutical and biotech companies and world-renowned research institutions such as Northwestern University, the University of Chicago, Rosalind Franklin University and the University of Illinois at Chicago, Fermi and Argonne Labs” said Scott Brandwein, executive vice president with CBRE in Chicago. “With existing vacancy extremely low for lab space, there is demand for more product in this market. This now has the government and private sector focused on this need and is beginning to facilitate the expansion with some new projects in the development pipeline.”

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CBRE Wins Multiple TOBY Awards in Chicago

CBRE recently took home multiple awards at BOMA/Chicago’s annual TOBY/Gold Circle Award Gala, which recognizes the best and brightest in Chicago’s property management industry.

This year, CBRE won in four categories and was named a finalist in several others.

Winners were:

TOBY Awards

  • 100 N. Riverside – 500,000 – 1 Million Square Feet.

CBRE team: Cory Roberts, Associate Director; Justin Garrison, Real Estate Manager; Meganne Miller, Real Estate Services Administrator; Tom Looney, Chief Engineer; Paul Libbey, Asst Chief Engineer; Kevin Hurley, Engineer; Paul Naylor, Engineer; Ryan Steger, Engineer; Tom Murphy, Engineer; John Carriglio, Apprentice Engineer.

  • 737 North Michigan/Olympia Center – Mixed-Use Building

CBRE team: Laura Bossert, Associate Director; Elizabeth Kilroy, Real Estate Manager; Celia Egleston, Assistant Real Estate Manager; Lexie Polk, Real Estate Services Administrator; Mark Tomczyk, Senior Property Accountant; John McClain, Construction Manager; Larry DeMatteo, Chief Engineer; John Zei, Assistant Chief Engineer; Biff Aiken, Building Engineer; Tom Jurectic, Building Engineer; Freddy Robinson, Jr., Building Engineer; Maurice Hankison, Building Engineer; Victor Melgoza Godinez, Building Engineer; Mitchell Wood, Apprentice Engineer

Gold Circle Awards

HoldermanHeather Holderman – Property Manager of the Year – 353 North Clark

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Zaena Rihani – Full Designation Scholarship Recipient

We would also like to recognize our finalists:

  • 2018 TOBY Award in the 1 million square foot and above category353 North Clark.
  • BOMA/Chicago’s Gold Circle Award for Emerging Leader of the Year –Victoria Larionova
  • BOMA/Chicago’s Gold Circle Award for Building Engineer of the YearMike Moriarty



Congratulations to all on these significant honors!

You can see a complete list of winners here.

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Downtown Chicago Office Activity Remains Strong As New Product Comes on Line

The state of the Chicago office market remains strong and 2018 should be another solid year, according to CBRE’s Drew Nieman, who recently spoke at the Illinois Real Estate Journal’s 16th Annual Real Estate Forecast

Through 2015, the Chicago market had been experiencing robust positive absorption, according to research from CBRE. Yet vacancy began to tick up from a low of 10% in Q1 2016 to 12.2% at the end of 2017 as new product came on line, and, firms continued to contract their space.

“We have seen vacancy tick up, but there is still a lot of good activity out there and suburban firms continue to move to the CBD,” said Nieman. “When you are tracking 140 million square feet, I feel like 12 percent is the new 10 percent.”


CBRE’s Drew Nieman speaks at the Illinois Real Estate Journal Forecast in Chicago.

Nieman did also point out that while vacancy has gone up, lease rates have as well, ending 2017 at an average of $38.95 gross.

“It’s a very interesting market when we see vacancy increase and rental rates increase,” said Nieman. “This is because of the new product coming on line. Rental rates in the newest buildings are about $55 per square foot gross. The newest buildings that will come to market later this year and next year will be pushing $60. Tenants are willing to pay this.”

The panel discussed “disruptors” in the market, or, new trends that are changing traditional business practices. Nieman cited the growth of shared-office providers.

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Warehouse Construction Surge Lifts Industrial-Land Prices By 16 Percent in Chicago Market

The e-commerce-fueled surge in development of warehouses and distribution centers has generated double-digit, year-over-year percentage increases in prices for industrial land in major markets, with Chicago recording a 16 percent price increase, according to a new report from CBRE.

CBRE found that the average price for large industrial parcels of 50 to 100 acres – usually earmarked for construction of large, regional warehouses – increased to more than $100,000 per acre from roughly $50,000 a year ago.

Similarly, industrial plots of five to 10 acres – often suited for construction of smaller, infill distribution centers in urban or suburban settings – increased to more than $250,000 per acre this year from roughly $200,000 a year ago.

In Chicago, the average price per acre of land for prime warehouse development is now up to $250,000, a 16 percent increase year-over-year.

Land Prices

“Overall demand for industrial land remains strong and it is especially high in infill markets,” said Matt Ishikawa, senior vice president in CBRE’s Land Services Group. “Developers have been very active in the Chicago area with both built-to-suit and speculative industrial projects and this activity is not slowing down heading into 2018.   Demand is so strong for industrial sites that buyers are looking beyond just green fields and are also seeking tear-down and redevelopment opportunities.”

Read the entire report here.

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VIDEO: Chicago Condo Deconversions – A Growing Trend

CBRE has executed on several of the largest condo deconversion projects in the city of Chicago. As the multifamily market continues to show strong returns, both developers and condo owners are finding this scenario to be a win-win. Watch this video to lean how the process works.

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Chicago Warehouse Size Increases 134% from 2012-2017

In a recent study, CBRE reports that e-commerce has driven a more than doubling of the average footprint of warehouses built in the U.S. since the early 2000s.


CBRE analyzed the average size of warehouses built in the U.S. during the last development upswing from 2002 to 2007 and compared those figures to the current building period of 2012-2017. The analysis found that the average size increased by 143 percent in that span to 184,693 sq. ft. and the average warehouse clear height rose by 3.7 feet, to 32.3 feet in total.

Chicago warehouse size increased roughly 134 percent in that time frame, with the average new building now at 283,366 square feet, up from 121,133 square feet.

“The e-commerce industry has created demand for massive warehouses with high ceilings to store extensive, fast-moving inventories,” said Matt Mulvihill, executive vice president with CBRE in Chicago. “We have seen this drive new construction activity in the Chicago region and we expect it to continue for the foreseeable future as new product is delivering an advantage to large-scale distributors.”

To read the report, click here.

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Infographic: Chicago Urban Retail Overview

20171127 Retail infographic_03-02

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CBRE Chicago Wins Three NAIOP Awards for Excellence


We are proud to announce that CBRE recently received three 2017 NAIOP Chicago Awards for Excellence – more than any other Chicago commercial real estate firm.

Congratulations to the brokers below for being recognized by their peers for outstanding deals in 2017!

CBRE Chicago winners include:

Broker Transaction of the Year – Downtown Office
Bank of America at 110 N. Wacker Drive
Christy Domin, Drew Nieman, Sara Spicklemire

Broker Transaction of the Year – Suburban Office
Wilton Brands at 535 E. Diehl Road, Naperville
Gary Fazzio

Broker Transaction of the Year – Industrial
E-Commerce Client at 6521 Monee-Manhattan Road, Monee
Traci Payette

Congratulations to our winners and all of our seven finalists.

To see the complete list of winners, visit NAIOP’s awards page.

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Law Firms Taking Less Space in Chicago, with 65% of Transactions Listed as Contractions Since Start of 2016

Law firms are adjusting their real estate strategies in response to advances in technology, shifting client demand, aging workforces and intense competition to attract and retain skilled talent, according to a new report from CBRE.

In Chicago, 65 percent of transactions between Q1 2016 and Q2 2017 have resulted in a contraction of space, with firms reducing their space by 23 percent on average. Nationally, firms reduced their footprint by 27 percent in the same time period.*


Chicago Law Firm Activity

The second-most active market tracked in the study, Chicago experienced 1.6 million square feet of leasing activity in this time frame, with 90 percent of the transactions listed as renewals.

“One of the most efficient ways for law firms to reduce their operating cost is to address their office rental costs,” said Todd Lippman, vice chairman with CBRE. “As a result, many law firms are employing new real estate strategies to shrink their footprint when lease expirations present opportunities. By really examining their space needs, many firms are reconsidering long-held assumptions about how their attorneys work.”

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CBRE Has Once Again Been Recognized in the Chicago Tribune’s Top Workplaces Program

TWP_Chicago_Portrait_2017_AWFor the second consecutive year, CBRE Chicago has been recognized in the Chicago Tribune’s Top Workplaces program.
Based solely on feedback from 950+ Chicago-area CBRE employees who completed a Tribune survey, the recognition places the firm on an elite list of some of the city’s most well-respected employers. CBRE earned the “Workplace Achiever” designation, which means the company held the standards of what it means to be a Top Workplace.
The Chicago Tribune describes a top workplace as an organization that is successful because its employees enjoy their work, embrace their mission and feel like valued teammates.
“This is a very prestigious honor, which reflects the tremendous efforts and dedication of our most valuable resource, our employees,” said John Latessa, president of CBRE’s Midwest division. “Congratulations to all of them for making this possible.”
Thank you to all of our employees for achieving this incredible recognition!

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