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CBD Office Leasing Favors Class A
The CBD office market favors Class A, both in the most recent quarter and over the past five years, according to Colliers International analyst Will Goldstick. “Class B assets have encountered more pressure than other assets as tenants have flocked to more efficient space in newer developments,” Goldstick wrote.
Both Class A and Class B assets saw vacancies decline during the first quarter. However, Class A’s vacancies improved by 70 basis points from the prior quarter, versus 17 for Class B. Class A’s quarterly rate of improvement has also been faster over a five-year timespan, reported Goldstick.
The delivery of a new Class A asset during Q2—the redeveloped Old Post Office, still largely vacant—will cause vacancies to rise by itself, Goldstick noted. Longer term, he wrote, “it is expected that more tech firms from the coasts may look to Chicago as a cost-effective, yet valuable, option for talent.”
Pictured: Old Post Office
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