Cresa Sees Uphill Climb for Suburban Office
This article originally appeared on Connect Chicago.
Chicago’s suburban office market saw an increase in inventory to 218,033,504 square feet in the third quarter, up from Q2 levels, Cresa reported. Dovetailing with the rise in inventory is a decline in leasing volume: 367 deals during Q3, the first time this metric has dropped below 380 since 2009.
Of the existing inventory, 1,905 buildings totaling 110,167,638 square feet have 37,700,490 square feet of available space consisting of 29,827,067 square feet of vacancy, for a vacancy rate of 27.1%. “This rate represents an all-time high for vacancy in the suburbs,” according to Cresa.
Based on the current vacancy rate, “it would take over 10 years of net absorption to reach full occupancy,” according to Cresa. “This seemingly dire situation for landlords is further compounded by the fact that 72% of current vacant space has been on the market for over two years.”