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CBD Vacancies Plummet 90 Points Y-O-Y
Limited deliveries and tenant expansions helped fuel a 90-basis point drop in downtown office vacancies compared to a year earlier, according to Marcus & Millichap. The CBD’s vacancy rate ended the quarter at 14%, compared to 16.1% for the Chicago region overall.
“Chicago’s vibrant urban core boasts a lifestyle attractive to many young professionals, motivating many corporations to expand their workforces, boding well for office property performance,” according to the firm’s Q2 Chicago office report. That being said, downtown did see a marginal decline in asking rents to $29.79 per square foot, while average asking rents in the suburbs ticked upward 1.4% from the year-ago period.
Low vacancy and steady rent growth sustain both local and out-of-state buyer interest in Chicago office assets, Marcus & Millichap indicated. However, although investor demand remains healthy in the CBD, fewer listings available have pushed many buyers to consider assets in the suburbs.
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