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Lengthy “Up” Cycle Has Something for Owners, Tenants

Chicago’s office landlords and tenants continue reaping the benefits of commercial real estate’s longest “up” cycle in 40 years, according to Savills Studley. The firm’s report cites two main reasons that this up cycle is different: low interest rates enabling owners to justify higher rents through up-front concessions, and densification enabling tenants to afford the higher rents.

”Owners are also leveraging their buying power to build ‘ready-to-go’ speculative suites for organizations that have immediate needs or don’t want to absorb all of the details associated with a new buildout, as well as to offer ‘turnkey’ solutions minimizing risk to tenants,” observed Robert Sevim and Eric Feinberg of Savills Studley’s Chicago office.

In Chicago, the amount of occupied space increased by 5.3% between 2010 and 2017, while employment rose by 10.1%, nearly twice that rate. Over the same time period, the amount of square footage occupied by employees decreased by 5.1%.

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Inside The Story

Download the reportConnect With Savills Studley's Sevim and Feinberg

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 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).

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