Savills Studley Releases Q3 2016 Findings for Chicago CBD

23 October 2016

Savills Studley, the leading global commercial real estate services firm specializing in tenant representation, has released its 2016 Q3 Chicago CBD edition of the Savills Studley Office Market Report.

The quarterly report is an in-depth compilation of office leasing statistics and trends, major transactions, submarket comparisons, employment trends and investment and development trends specific to the Chicago CBD region. In addition to Chicago CBD, Savills Studley has released a 2016 Q3 Chicago Suburbs Office Market Report, which can be found on the Market Research page of the Savills Studley’s Chicago Office website.

Highlights from the 2016 Q3 Chicago CBD Office Market Report include:

 

  • Coinciding with slower employment growth, rising rents and the looming delivery of several trophy towers, Chicago CBD quarterly leasing fell to 2.2 msf in Q3; down 25.6 percent from Q2 and the weakest tally since mid-year 2015. 
  • Overall asking rent increased for the sixth consecutive quarter and the ninth quarter out of the last ten, rising by 1.3 percent from $37.45 to $37.92. 
  • Chicago CBD availability increased for the second quarter in a row, rising 0.1 pp to 15.3 percent. Chicago has 11.5 msf of Class A space available for occupancy within the next 12 months – an increase of 12.4 percent from 10.2 msf a year ago. Additionally, there is now almost double the available sublease space on the market compared to 2014. 
  • New trophy building construction is expected beyond the upcoming 2017 and 2018 deliveries. Tishman Speyer, Hines and Sterling Bay are all in planning stages for transformative developments to be completed after 2018. 
  • Growth in construction costs and property taxes could offset any slowdown in rent growth as a result of increased availability. Construction costs have jumped by 20 to 25 percent in the last 12 to 18 months. Long-term solutions to the City of Chicago’s well-chronicled financial challenges remain unclear.

The 2016 Q3 Savills Studley Chicago CBD Office Market Report can be found on Savills Studley’s webpage, as well as a national report and reports for each of the 29 major U.S. markets.

 
 

General Enquiries

{0}