On Thursday, October 2nd, Bisnow hosted its 3rd annual State of the Suburbs event at The Westin Lombard Yorktown Center, covering the state of the suburban office market, investment trends in the marketplace, and the outlook for the Chicago suburban office market.

Panelists included:
Christopher Carroll – Managing Director, HFF (moderator)
Matthew Haley – Managing Director, Pearlmark Real Estate Partners
Tim Junker – Principal, Walton Street Capital
Richard Blum – Managing Principal, White Oak Realty Partners
Michael J Rolfs – Partner, Hamilton Partners
Paul Tsakiris – President & Managing Broker, First Western Properties

Carroll – What’s attracting investors to the suburbs? 

Rolfs – I think value is the main factor. People are seeing that there is positive absorption in the suburbs and they are realizing that momentum is picking up, and that there is a better yield. 

Blum – The arbitrage in yields between downtown and the suburbs are huge, and the spread is widening. I think some are finding it easier than others, but it is all being driven by yield. For every ten investors for a downtown office building there’s only one or two for a suburban building. It is still a relatively thin market.

Junker – In addition to yield, we are seeing the credit quality of the tenants as an important factor. We are encouraged to see institutional names that have been around for decades and have very strong balance sheets that are looking to make long-term commitments. 

Read the full recap and summary here.