January 2014
Year-End Market Review & 2014 Forecast
We are pleased to present our Year-End Market Review & 2014 Forecast, a detailed look at the past year in the Chicago Metropolitan industrial, office, retail, and investment real estate markets and the outlook for these markets in 2014 and beyond.
This year’s report totals 84 full-color pages detailing:
- Up-to-date market statistics
- Current trends
- Significant lease and sale transactions
- Largest blocks of available space
- Hundreds of detailed charts
- Informative maps
Industrial Vacancy Down to 8.4%, 15.8 MM SF Absorbed in 2013
Chicago’s industrial market experienced its fourth consecutive quarter of positive net absorption during the fourth quarter, as more than 4.4 million SF of vacant space was removed from the market through leasing activity and user sales. Net absorption averaged more than 3.9 million SF per quarter during 2013, bringing the tally for the year to more than 15.8 million SF, the highest total since 2007. The vacancy rate dropped 81 basis points over the course of the year to 8.4%.
Both Suburban and Downtown Office Markets Improve in 2013
The suburban office market absorbed 960,233 SF over the course of 2013, with the fourth quarter posting the greatest tally of 457,564 SF of positive net absorption. This activity pushed the overall vacancy rate below 20% for the first time in over five years to 19.88%.
The downtown office market vacancy rate decreased by 96 basis points during the past year to 12.51%, the lowest rate the downtown market has seen since 2008. More than 1.1 million SF of vacant space was absorbed, as demand continued and several sizable leases were signed.
Vacancy and Rental Rates Stabilize in Retail Market in 2013
The Chicagoland Metropolitan retail marketplace began to stabilize in 2013. Chicago and suburban retail trade areas experienced a decrease in shopping center vacancy as well as stabilization of quoted asking base rents. However, Safeway’s decision to cease operations of the entire Dominick’s grocery chain halted the momentum of recovery in the fourth quarter.
Office and Industrial Investment Activity Modestly Improves
Institutional investment in Chicago’s office and industrial markets has returned over the past few years, and for the first time in more than five years these investors began to focus on non-core assets in 2013. Total industrial investment sales volume for 2013 was about $1.1 billion, while the downtown office sales volume totaled $3.3 billion in 2013 and the suburban sales volume totaled about $845 million.
For further information regarding the content of these market reviews, please contact:
Craig Hurvitz | Director of Research
630 693 0645
churvitz@hiffman.com
If you are interested in attending a custom market overview presentation, please contact:
John R Picchiotti | Chief Operating Officer, Brokerage
630 691 0608
jpicchiotti@hiffman.com
