2012 was best year for Chicago office leasing since ’06
In these January days, we all could use good news about the economy, so here goes: In 2012, the downtown Chicago office market had its best year for leasing since 2006.
That’s the finding from the tenant-advisory firm Studley Inc. in its market report summarizing the year just finished. Its analysis points to job growth in the city’s core, even if much of it comes at the expense of the suburbs.
Studley counted downtown leasing deals covering 9.5 million square feet in 2012, a 21.5 percent increase from 2011. The higher business volume translated into a march downward in vacancy rates during the year. Studley said that at yearend, downtown vacancy rates, including space available for sublease, stood at 17.2 percent, unchanged from the end of the third quarter but compared with 18.1 percent a year ago.
The average asking rent of $32.94 per square foot is just marginally higher than a year ago. Studley said some tenants found better value moving from the West to the Central Loop, while tech and creative sector companies aggressively pursued space in old lofts and warehouses.
As for the suburbs, Studley called them “stuck in neutral.” Their vacancy rate was 24.3 percent at yearend, the same as the third quarter and compared with 25.7 percent a year ago. “Area companies still face challenging conditions and remain very cost conscious,” Studley said. “One of the tradeoffs, though, is the continued decline in occupancy costs—suburban Chicago is still one of the most tenant favorable U.S. markets.”
The average suburban rent of $19.74 per square foot compares with $20.23 a year ago.
WEST SIDE BOUND: Following a gift from an anonymous donor, the YMCA of Metropolitan Chicago has spent $8.5 million to buy a seven-story building at 1030 W. Van Buren. It will be the new home of the Y corporate staff, most of which works at the Lawson House YMCA, 30 W. Chicago. The organization is in talks with Holsten Real Estate Development Corp. to purchase Lawson House.
The purchase includes the 59,000-square-foot building and adjacent parking for 132 cars, Y spokeswoman Jill McDonnell said. She said the purchase will allow the organization to place corporate staff under one roof while also offering a fitness center and other services to the neighborhood. The move is expected by late fall.
The seller was trader Barry Lind, who formerly used it for his Lind-Waldock brokerage. It was a Chicago fixture that became part of MF Global and disappeared with its financial collapse.
ON THE MOVE: Drew Nieman, one of the best-known brokers of downtown Chicago office space, is going from Colliers International to U.S. Equities Asset Management LLC as executive vice president. Nieman was a longtime executive at the John Buck Co., where he filled Wacker Drive with tenants.
2013 MINUS 11: At the start of 2013, the nonprofit owners of the Clare Oaks retirement community in Bartlett emerged from a yearlong Chapter 11 bankruptcy. With bonds from the Illinois Finance Authority, the property now has a lower debt burden, said Michael Hovde Jr., president of its board. He said it also can afford capital improvements. Clare Oaks serves 325 residents at 825 Carillon Drive.
David Roeder reports on real estate at 6:22 p.m. Thursdays on WBBM-AM (780) and WBBM-FM (105.9). The reports are repeated at 10:22 p.m. Thursday and 7:22 a.m. Sunday.