Observers say activity in East-West Corridor to be slightly less robust in 2012
February 22, 2012
By: Staff Writer
While leasing activity in the East-West Corridor remained strong in 2011, some in the real estate industry are forecasting a slightly less active market in 2012.
... According to an office market and space data report by Studley, the East-West Corridor’s overall availability rate fell quarterly by 1.9 percentage points to 24.6 percent and has decreased by .2 percentage points from a year ago. ...
... The Studley report also noted that leasing activity in the East-West Corridor was fairly robust in the fourth quarter of 2011. The report used as an example HAVI Global Solutions, which signed a lease to relocate to 130,000 square feet in the former Sara Lee headquarters at Esplanade. ...
... However, Studley’s report points out that “with ample capital to deploy and low yields in most other asset classes, investors have shown increasing willingness to make riskier opportunistic acquisitions.”
The report notes that Blackstone Group’s $1.08 billion purchase of Duke Realty’s 82-building, 10.1 million-square-foot suburban office portfolio diverges from the safer CBD purchases made by most investors in the last two years. Blackstone’s primary new assets in suburban Chicago include Executive Towers I, II and III in Downers Grove, as well as O’Hare International Center and the Riverway Complex in Rosemont. The report goes on to say that in contrast to many suburban Chicago properties, most of these complexes are well leased. Executive Towers West I, 1431 Opus Place, has a vacancy rate of approximately 25 percent, but other buildings have vacancy rates of roughly 10 percent. ...
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