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Investor Demand Remains High for Chicago Office

Chicago slipped year over year in the rankings of Institutional Property Advisors’ U.S. Office Index, in common with New York, Los Angeles and Boston. For Chicago, the two-rung drop in IPA’s index measuring the investment outlook is due to an influx of new product keeping vacancies elevated.

The 4.8 million square feet of completions slated for this year is up significantly from 2018’s 3.2 million square feet, according to IPA, a division of Marcus & Millichap. Nonetheless, IPA’s 2019 prediction is that the Chicago market’s vacancies will decline by 10 basis points by year’s end, as demand outpaces supply.

“A healthy pace of net absorption of office space, and stable asking rent growth, continues to sustain investor demand for office properties throughout Chicago,” according to IPA’s latest Office Investment Forecast. Properties downtown and in the surrounding neighborhoods are trading with average first-year returns between 4% and 6%.

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

  • ◦Development
  • ◦Sale/Acquisition
  • ◦Sale/Acquisition