Office Sales Spike in Windy City
October 28, 2010
By: H. Lee Murphy

The high-rise construction cranes around Chicago's skyline have been mostly absent this year, as the marketplace suffers its highest office vacancy rates in at least two decades. In recent months, however, dealmakers have swung into action, signaling the beginning of an investment rebound in the Windy City's capital markets. ...

... Kevin McLennan, a senior managing director for Studley in the suburbs, warns that the suburban vacancy problems could spike higher with the expected announcement soon that Alcatel-Lucent, beyond its building sale, is getting ready to put another 225,000 sq. ft. of offices up for lease in the western suburbs. ...

... There are some really good deals in the downtown to be had for tenants now,” confirms Robert Sevim, a tenant rep and executive managing director with Studley's Chicago office. Building owners have been alarmed by a rash of space being given back by companies both big and small. Sevim reports that “between 30% and 40% of my tenant clients are downsizing this year. That's the most downsizing I've seen in my 10 years in Chicago.”

Indeed, companies continue to pare back their space needs. Blue Cross & Blue Shield of Illinois was growing in its 263,000 sq. ft. space at 111 E. Wacker Drive as recently as 2007. In September the company exercised a termination option to leave the building altogether and consolidate operations in a smaller complex nearby. ...

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