Chicago’s River North, a district once notorious for its prostitutes and dilapidated warehouses, has become one of the hottest office markets in the U.S.
The neighborhood has transformed from a wasteland in the 1970s to a trendy spot for living, dining and entertainment that’s also attracting technology tenants. Yelp Inc. (YELP:US), the San Francisco-based business-review website, is one of the latest to lease space in the area, located across the Chicago River from the central business district known as the Loop.
Chicago is among U.S. cities benefiting from the technology boom as job growth in the industry boosts demand for offices. Startups and expanding firms alike are cramming into River North, drawn by its historic buildings and easy access to mass transit, pushing vacancies to the lowest in downtown Chicago. River North office rents jumped 26 percent in the past two years, the most for a high-tech submarket behind only Redwood City on the San Francisco Peninsula and Manhattan’s midtown south, according to brokerage CBRE Group Inc.
“The River North activity is just off the charts,” said Tiffany Winne, a senior managing director at commercial brokerage Savills Studley Inc. in Chicago, who has represented technology tenants.
The vacancy rate for the neighborhood’s 11 million square feet (1 million square meters) of offices was 10.8 percent at the end of June, compared with 14 percent for the 126 million square feet in all of downtown, data from CBRE show. Among companies based in the district is daily-deals website Groupon Inc. (GRPN:US), which has 323,000 square feet at its headquarters at 600 W. Chicago Ave., according to CoStar Group Inc.Tech Turns Chicago Skid Row Into Top Market: Real Estate
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