Surge in private-sector jobs helps fuel Downtown office market

The Downtown Chicago office market got a jolt this year, with nearly 20,000 more private-sector employees than in 2017, adding to low vacancy rates and high rents.

The 3.25 percent bump in private-sector jobs was more than triple the rate of job growth for the entire metropolitan area.

West Loop ZIP Codes 60606 and 60607 combined for 45,000 added jobs since last year, thanks in part to the opening of new Fulton Market headquarters for Google and McDonald’s. Suburban Cook County grew its job rolls by about 1 percent between March 2017 and March 2018, and the city outside Downtown saw a net loss of jobs.

The Downtown office vacancy rate has hovered around 13 percent since last year, and rents in the area are higher than ever, [] due in part to technology companies flocking to River North.

Tech brands like Facebook and Salesforce are expected to join McDonald’s and Google by opening new Chicago locations, further padding the city’s Downtown job growth.

But a frenzy of Downtown office development and renovation activity has led owners of older buildings to shell out for concessions packages, potentially signaling that new office supply is starting to outpace the parade of companies setting up shop Downtown.

And landlords are bracing for even more class-A office space to be heaped into the city’s business district over the next few years. 601W’s Post Office redevelopment, Riverside’s 56-story tower at 110 North Wacker Drive and Hines’ Wolf Point South tower are expected to combine for more than 4 million square feet of added office space by 2020.

They’ll soon after be joined by a new 50-story office tower next to Union Station, and a bevy of new office towers in Fulton Market including Sterling Bay’s 19-story complex at 333 North Green Street. [Crain’s] — Alex Nitkin