Although we are still in a ‘tenant’s market’, the local commercial real estate recovery has advanced significantly since the peak of the recession. Since the end of 2010, the Western suburbs absorbed over 1.7 million square feet of vacant space.
Vacancy in the Western suburbs is now at 20.24%, compared to the peak vacancy rate of 23.77% during the third quarter of 2010. The Western suburbs experienced positive demand now for the 4th consecutive quarter, absorbing 80,000 square feet of vacant space in the first quarter.
The aggregate suburban office market experienced more absorption in the 1st quarter of 2014 than the downtown office market, as has been the case for six of the past eight quarters. In the first quarter of 2014, 272,607 square feet of vacant space was absorbed in the suburban office market, pushing the vacancy rate down to 19.67%, the lowest in more than 5 years.
Seventy-two thousand square feet of new office supply will be added to the Western suburbs this year once the iMed Medical Office Campus in Naperville is completed.
The largest transaction in the Western suburbs of the ﬁrst quarter was the purchase of the One Tellabs Center by Select Income REIT. Select Income REIT bought the 819,513 SF class “A” headquarters facility for $187.5 million, or about $229 PSF, and leased the entire facility back to Tellabs. The largest lease of the ﬁrst quarter was signed by Sanford L.P., the maker of Sharpie and Paper Mate pens, which took 55,874 SF in the former Sara Lee headquarters in in Downers Grove.
At Golden Group Real Estate, we specialize in tenant representation real estate services for office space users in the Chicago area, helping local business owners find office space and negotiate lease and purchase agreements. We never represent landlords, so we are prepared to negotiate aggressively on behalf of our tenant clients.
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