Downtown office vacancy inches upward in second quarter: report

The vacancy rate rose from 13 percent to 13.3 percent, but absorption remained positive

Chicago /
Oct.October 02, 2018 04:00 PM

Together, River Point Tower and 150 North Riverside have added 2.5 million square feet of office space since last year

Downtown office availability slightly outpaced leasing activity between July and September, nudging up the area’s office vacancy rate.

The overall vacancy rate for Downtown offices rose from 13 percent to 13.3 percent during the third quarter, making two consecutive quarters of increases, according to CBRE data cited in Crain’s

But industy observers remain confident in the underlying demand for office space Downtown, in part because the area registered positive net absorption for the fifth consecutive quarter. About 133,000 more square feet of office space was leased and occupied Downtown than during the second quarter, according to CBRE.

Downtown sublease space vacancy played a key role in pushing up the overall vacancy rate last quarter, jumping from 0.7 percent to 1.1 percent.

Both Facebook and Google have signaled plans to expand their footprints Downtown and Salesforce may join them with a 500-square-foot lease in the under-construction Wolf Point South tower.

They’d join mega-leases from companies like Walgreens, Bank of America and BMO Harris.

Millions of square feet of new office space is on the horizon, though. Riverside Investment & Development got underway on its 1.4 million-square tower at 110 North Wacker Drive earlier this year, and Sterling Bay’s trio of office towers in Fulton Market are expected to add 1.7 million square feet by the time they’re finished. [Crain’s] — Alex Nitkin 


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