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Tech Firms Are Willing To Pay More Upfront For A River North Office Address

The 4M SF Merchandise Mart is now 75% occupied by tech tenants.
Merchandise Mart, Chicago

River North continues to reap the rewards of Chicago's rapidly expanding tech scene, according to CBRE's 2017 Tech 30 report. Office rents in the submarket jumped 16% to $40.81/SF from Q2 2015 to Q2 2017. The more stunning figure is that this accounted for a 37% rent premium during the same time frame, a sign that tech firms are willing to pay more upfront to secure a River North address.

CBRE Senior Vice President Dan Lyne said the activity is now carrying over to neighboring submarkets, as pricing escalates and vacancy rates drop in River North. Those neighboring submarkets provide direct access to talent, and easier commutes to downtown via ride-sharing and other alternative forms of transit.

Overall, average office asking rents in Chicago rose 4.9% from Q2 2015 to Q2 2017, to $29.80.