Chicago’s Suburban Commercial Real Estate Sector Proves Its Mettle Once Again

[caption id="attachment_125119" align="alignright" width="100"] Richard Gatto, The Alter Group[/caption]Here’s the Chicago commercial real estate market’s big secret: the suburbs never went away. While it’s true that office vacancy rates hit the high 20s in 2008, the truth is that suburban absorption never faltered. In early 2014, Savills Studley reviewed all office leasing transactions from 2010 to 2013, a recessionary period for the sector. The analysis revealed that of the nearly 7.4 …

February 4, 2015Illinois, Market Reports, Midwest, Midwest Market Reports, Office, Retail

Chicago’s Downtown Office Market Enjoys Blockbuster Summer of Activity

Three staggering announcements highlighted downtown Chicago’s office sector during the second and early third quarter as investors jockeyed to get a piece of a market that has been the beneficiary of the tech boom. The CBD office vacancy rate is now at its lowest level in five years — 14.1 percent — aided by downtown net absorption of 592,328 square feet during the second quarter, the most in nearly seven years, according to CBRE Group. Asking rents in the city have risen 3.9 …

August 13, 2014Illinois, Market Reports, Midwest, Midwest Market Reports

Employment Gains Have Positive Effect on Springfield, Ill. Property Markets

When we read or hear about economic recovery, whether it is regarding commercial real estate or a different sector of the economy, so often the perspectives and projections we hear are on a national, or even global, scale. Unfortunately, such analyses can result in a picture of the economy that seems like it was taken with a wide-angle lens. Typically, commercial real estate activity in larger cities will not be representative of tertiary markets like Springfield, Ill. The big picture can …

July 18, 2014Illinois, Market Reports, Midwest, Midwest Market Reports

Apartment Development Activity Ramps Up Across Suburban Chicago

More than 9.5 million people live in the Chicago area, making it the third most populous metropolitan statistical area (MSA) in the country. Like many other markets in the Midwest and Northeast, the ongoing population shift from north to south in the United States continues to pose a challenge. Consequently, population growth during the next five years in Chicago is projected to lag behind the national average. The good news is that Chicago employers are expected to generate the largest job …

April 7, 2014Illinois, Market Reports, Midwest Market Reports

Suburban Chicago's Retail Market Grows More Vibrant by the Day

Is suburban retail dead? The short answer is “of course not.” While the recession was especially hard on many suburbs, recent activity indicates that conditions have improved greatly. To better understand where we are, we need to examine where we have been. During the real estate boom leading up to 2007-08, retail developments were sprouting up everywhere. Many developers expanded farther and farther away from Chicago, while incurring an additional risk through overleverage and …

April 2, 2014Illinois, Market Reports, Midwest Market Reports

Don't Make the Mistake of Counting Out Suburban Chicago's Office Market

There is no question that the technology sector is one of the principal drivers of our commercial real estate sector today. Downtowns nationally have seen an influx of new economy firms because of the presence of young knowledge workers in CBDs — and Chicago is one of its stars. More than $265 million flowed into Chicago-area digital tech companies during the third quarter of 2013. In addition to startups, this growth caused an exodus of firms out of suburban business parks into areas …

March 26, 2014Illinois, Market Reports, Midwest Market Reports

Chicago's Hot Apartment Market Has Owners Eyeing Exit Strategies

Modest economic growth in the Chicago metro area will support further improvements in apartment vacancy and rents this year. Staffing levels grew in the first half of 2013, though the pace of hiring eased from prior periods. Vacancy will remain lower than normal in the near term, though temporary imbalances between supply and demand will occur over the next two years. This trend is especially likely in the city, where the number of new luxury units aimed at upwardly mobile young households …

November 11, 2013Illinois, Market Reports, Midwest Market Reports

Chicago Apartment Market: Vacancies Plummet

Recently employed residents are forming new rental households in metro Chicago, generating positive net absorption, a decline in vacancy and a rise in apartment rents. Additional payroll growth will stimulate new demand and reduce marketwide vacancy to its lowest annual level in 5 years by year’s end to about 4 percent in the city and suburbs. Over the longer term, the market’s stature as a primary destination for college graduates should sustain a vacancy rate of approximately 4 …

August 31, 2012Illinois, Market Reports, Midwest Market Reports

CBD market clearly on the mend.

The Chicago downtown office market is on a roll. Vacancies have fallen for more than 12 months straight as corporations pull the trigger on new or rehabbed office space in marquee locations to accommodate consolidation and growth. One of the big stories is that the market is far more geographically diverse today. We are seeing the suburban sprawl in reverse as corporations leave far-flung business parks to seek out trendier 24-hour neighborhoods such as River North (Chicago’s tightest …

June 29, 2012Illinois, Market Reports, Midwest Market Reports

Patience is the key to success.

Lou Kahnweiler, the founder of Bennett & Kahnweiler, the predecessor to Colliers International here in Chicago, is reported to have once declared, "Industrial Real Estate is a great way to get rich slowly." He meant buying or building buildings, putting 25-year debt on them, keeping them leased and was the way to wake up rich 25 years later. During the late 1990s and most of the 2000s, industrial real estate in Chicago was the place to get rich quick, as developers couldn't build fast …

August 16, 2011Illinois, Market Reports, Midwest Market Reports