Suburban Single-Story Office Market Report: Q1 2021

Leasing Activity Improved Year-Over-Year

There was 259,176 square feet of leasing activity in the suburban single-story office market to start the year. This represented a modest 2.8 percent improvement year-over-year over a mostly pre-pandemic first quarter of 2020. The East-West Corridor saw 77,976 square feet of leasing activity across 18 deals in the first quarter, a 4.1 percent improvement year-over-year compared to the 74,893 square feet of leasing activity recorded in the first quarter of 2020. Schneider Electric’s new lease at Executive Place II in Westmont accounted for 32.1 percent of the submarket’s leasing activity on the quarter. Additionally, the North Suburban and I-55 Corridor submarkets both saw increases in leasing activity year-over-year as well.

• The total vacancy rate was 17.12 percent to end the first quarter of 2021, increasing 79 basis points year-over-year from the 16.33 percent vacancy rate recorded in the first quarter of 2020. Despite this increase, the suburban single-story vacancy rate is steady when taking a longer view of the market, as demonstrated by the 17.19 percent total vacancy rate recorded in the first quarter of 2016.
• Amongst peer submarkets, the North Suburban and O’Hare submarkets both saw decreases in total vacancy year-over-year. Leading the way, O’Hare’s total vacancy rate was 11.85 percent in the first quarter of 2021, decreasing 2.18 percent year-over-year from the 14.03 percent rate recorded in the first quarter of 2020.
• There was -8,515 square feet of net absorption in the first quarter, a 77.5 percent improvement quarter-over-quarter from the -37,798 square feet of net absorption recorded at year-end 2020. The I-55 Corridor led its submarket peers with 13,188 square feet of net absorption. Furthermore, that submarket has seen positive net absorption in two of the past three quarters.

Additionally, the report includes a highlight of the I-55 Corridor single-story market, which consists of over 2.1 million square feet of single-story office inventory. The I-55 Corridor submarket recorded a 14.95 percent total vacancy rate in the first quarter of 2021. This rate decreased 63 basis points quarter-over-quarter compared to the 15.58 percent rate recorded at year-end 2020. Additionally, the vacancy rate increased 105 basis points from the 13.9 percent rate recorded in the first quarter of 2020.

Comprehensive details with in-depth charts and graphs can be seen in our full report:

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Mike Morrone
Research Director
630-693-0645
mmorrone@hiffman.com