NAI Hiffman is pleased to present its Fourth Quarter 2012 Market Peek, providing a first look at the market statistics for the past quarter and year in the Chicago Metropolitan office and industrial real estate markets.
Click the video link above to watch a short video summarizing what is happening in the market
Over the past year, the pace of absorption in the suburban office market has actually outpaced the downtown market. This recent trend continued during the fourth quarter, as 674,000 SF of vacant space was absorbed, pushing the vacancy rate down to 20.7%, while 441,000 SF of vacant space was absorbed downtown over the past three months. This activity suggests that the recent buzz about suburban tenants leaving the suburbs for the city has been overstated.
The Northwest Suburbs, which has witnessed the market’s highest vacancy rate for years, experienced the most improvement during 2012, as nearly 1 million SF of vacant space was absorbed, pushing the vacancy rate down 2.9% over the course of the year. This area was particularly hard hit by the effects of the recession, and is finally starting to recover.
Demand for Industrial Space Positive for the 10th Quarter in a Row
The vacancy rate in the industrial market decreased by 30 basis points during the final quarter of the year, dipping to 9.2% in December, a rate equal to what was witnessed before the recession took hold of the world. A year ago, this rate was 1.1% higher. Since then, 14.6 million SF of vacant space was absorbed through new leases, lease expansions, and user sales. However, 11.8% of the space in the market is currently being marketed as available whether occupied by a tenant or not.
Much of the demand witnessed since the industrial market turned the corner during the second half of 2010 has been seen in the area’s historically active submarkets such as O’Hare, the I-55 Corridor and the I-80/Joliet Corridor. However, over the past year, several of the area’s secondary markets have witnessed increased activity as well. Construction and building sales have increased, a sign that the market continues to improve. 4.9 million SF is currently under construction, with much of that space expected to be delivered during the first half of 2013.
For further information regarding the content of this market peek, please contact:
Craig Hurvitz | Director of Statistics and Market Information
Comprised of over 140 real estate professionals, NAI Hiffman provides leasing, management and investment sales representation for owners and occupiers of commercial real estate in the Chicago metro market. It currently leases and manages a 57+ million SF portfolio of over 250 commercial properties throughout metropolitan Chicago and Northwest Indiana. NAI Hiffman is the Chicago-area representative for NAI Global, the world’s largest managed network of real estate service providers, comprising 5,000 brokers in 325 offices serving over 50 countries throughout the world.