Nothing shapes perceptions of a city like its skyline, and nothing defines a skyline like towering office buildings.
Successive waves of office construction over the past 30 years added striking new features to Chicago's profile, showcasing a vibrant commercial hub.
But office construction tends to track the economic cycle, and we haven't had a new downtown office building since the last crash. That's about to change, as my colleague Ryan Ori reported the other day. Two developers have landed the financing they need to proceed with major office projects on the banks of the Chicago River, breaking a five-year construction drought.
As in the past, these projects are getting off the ground just as the economy perks up. Broad-based growth in the 1980s spurred construction of 30 million square feet of office space, the highest single-decade total for downtown, according to data from Chicago-based real estate firm Heitman LLC. Another 16 million square feet went up during the bubble economy of the 2000s.
Will this latest expansion trigger a similar building boom? Real estate experts say the market can support a few more buildings, but they don't foresee the long-lasting surge we saw in past decades.
“I don't think that conditions are right for a significant wave,” says Lisa Davidson, Chicago-based executive managing director at Savills Studley, which advises office tenants. “I think conditions are right to get another one or two off the ground” in addition to the two buildings that recently got underway...Is this the start of office building boom in the Loop?
Related StoriesChicago CBD Office Sector Report (Q2 2014)
Chicago Suburbs Office Sector Report (Q2 2014)