Vacancy Rises Again
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|Chicago CBD office vacancy is up to 15.2% in Q2, CBRE says in new data to be released next week. The highest vacancy since 2005 is mainly attributed to tenants continuing to contract, as well as leases expiring in space that may have already been vacant for years, says CBRE's Lisa Konieczka. While new office buildings like 353 N. Clark and 300 N. LaSalle have come to the market mostly full in recent quarters, the shadow space left behind will need an increase in hiring, bringing new companies to the CBD (which has been a trend, see: Boeing, United and MillerCoors, Lisa says), and no new construction. CBRE restructured and extended Neale Gerber & Eisenberg's lease of floors 16-23, 179k SF in Q2.|
|Rent abatement has become the preferred concession to TI in this tenants' market, Lisa says. While West Loop properties near the Metra stations are usually a hit with tenants, some have moved to newer buildings like 155 N. Wacker, leaving vacancies in core buildings like Ernst & Young's space at Willis Tower. Going against the trend of moving into newer buildings, CBRE repped owner Sterling Bay Cos. in the lease of 21k SF to Vibes Media at 300 W. Adams, just two blocks from Union Station last quarter. The good news is negative absorption only increased by 140k SF last quarter, one of the lowest increases in the last two years. First quarter, negative absorption jumped to 704k SF.|