2021 Q4 Chicago Suburban Office Occupiers Guide
Occupiers looking for space in the suburban Chicago office market are doing so during a time of unprecedented uncertainty for landlords. While the downtown market may be rounding the corner, the suburban market continues to plunge into uncharted territory. Total vacancy continues to break records on a quarterly basis. In the fourth quarter, direct vacant space reached 25.2 million square feet, inching the total vacancy rate to 25.9%. Class B assets remain the hardest hit in terms of square footage, with occupiers leaving or downsizing their space. Approximately 12.7 million square feet of direct class B space is now vacant and, on the market, more than both class A and C space combined. This is the main contributing factor to the increase in suburban vacancy. The Northwest and East West Corridor submarkets construct the bulk of the vacancy, accounting for more than two-thirds of the available space on the market. It is anticipated that more vacant space will return to landlords later this year. Occupiers with a lease expiration in the next 12-18 months will see a plethora of availability across all submarkets and building types. Increasing suburban vacancies are a result of occupiers closing their operation or downsizing their footprint. In the third quarter, 771,701 square feet of negative net absorption hit the market, with Class A & B product types carrying more than 300,000 square feet of negative movement each. Class C product also posted negative figures. The East West Corridor was the only submarket to experience positive absorption for the quarter with the other three suburban markets all posting negative figures over 100,000 square feet. Notable move-outs included Siemens (105,106 square feet) at 887 Deerfield Parkway and AT&T (106,380 square feet) at 930 National Parkway. Noteworthy move-ins included BCI Acrylic (21,805 square feet) at 1950 Innovation Way and Aldridge Electric (26,508 square feet) at 1111 E Touhy Avenue.