New Office Deliveries To Add 4M SF To CBD Inventory By 2018
The downtown office sector is expected to remain strong in 2017, but deliveries will add 4.4M SF of new inventory and cause the overall vacancy rate to increase as we head into 2018, according to MB Real Estate's Q4 2016 CBD office real estate report.
Direct vacancy for the final three months of 2016 rose 23 basis points to 11.35%, which remains historically low. But projects in the pipeline like 150 North Riverside (pictured, left), which will be delivered in Q1; River Point, where tenants recently began moving in; and CNA's new HQ at 151 North Franklin could increase vacancy rates by a full percentage point by next year.
The effects of these deliveries will be felt the most in the West Loop, especially with Class-A properties. But the West Loop's direct vacancy rate stands at 9.7%, which will largely cancel out the effects. Read the full report here.