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Downtown office vacancy ticks down, but here comes the new inventory
Major projects in 2018 could also mean challenges for landlords
Downtown office vacancy rates inched lower to start of 2018, but the outlook might not remain so rosy for landlords, with three major projects expected to hit the market this year.
Data from CBRE showed vacancy rates at 12.9 percent in the first quarter, from 13.2 percent at the end of 2017, according to Crain’s. It was 13.1 percent in in the first quarter of 2017.
But 625 West Adams Street, built on spec by White Oaks Realty and CA Office, is about to bring 432,000 square feet of vacant space to the market. John Buck’s 800,000-square-foot tower at 151 North Franklin Street, to be anchored by CNA Financial, will also open this year.
And then there’s the hulking 2.8 million-square-foot Old Main Post Office rehab project that’s billed as a potential site for Amazon’s HQ2, but is still looking for an anchor tenant before its expected debut later this year.
CBRE told Crain’s the city will have to continue to bring in new companies to downtown to offset the added inventory. Landlords should also expect more leases in the range of 30,000 to 50,000 square feet, than deals with large tenants. [Crain’s] — John O’Brien