Downtown office vacancies fall but rents slip too
April 3, 2012
By: David Roeder

A few trends are becoming clear with the latest batch of statistics about the downtown and suburban office market. The main one is that in and around the Loop, office vacancy rates are still declining, with some sharp reductions from the reports that covered the end of last year.

The tenant representative firm Studley Inc. said its data for the first quarter showed overall downtown vacancy to be 17.5 percent, a figure that includes what’s available via sublease, compared with 18.1 percent for the fourth quarter of 2011. ...

... But Studley also found a slight decline in average rental rates during the quarter, a sign that landlords are nervous and that the market has yet to enter full-throttle expansion.

Joseph Learner, managing director at Studley, said the declining vacancy rates are misleading. Choices are limited for big users who need 250,000 square feet for more, he said, “but this a market of mid-size users and if you need 25,000 to 50,000 square feet, you have many options you can evaluate.” ...

... Studley’s suburban numbers show a slight drop in vacancy for the first quarter, to 25.6 percent from 25.7 percent, but the result only seems to reinforce what sorry shape that market is in. “I think of the word ‘bloodbath’ for the suburbs,” Learner said. ...

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