| Overall Vacancy edged downward in Chicago's suburban office markets in the second quarter, according to a Bradford Allen report. While the stats show the market improving slightly, it's possible that the numbers reflect pent up demand from the end of 2009, not necessarily an indication that the market has turned the corner. According to BA's Joel Berger, there is an interesting new dynamic that will continue to make it a challenging time for most landlords: A new group of buyers have been able to buy buildings at extremely reduced prices, and therefore have a much lower cost basis to make new leasing deals than their competitors. Examples include Millbrook Real Estate's purchase of The Arboretum Lakes Campus in Lisle, Crossroads Development's purchase of 1300 E Woodfield in Schaumburg and the Davis Companies purchase of The Crossings in Oak Brook. | |
| Another interesting market trend is that while the overall market is statistically very weak, there are “micro-markets” that are doing quite well, Joel says. The office market along the I-55 Corridor and the markets for spaces under 10k SF near major suburban centers like Oakbrook and Woodfield malls are outpacing the overall market. It's the outlier suburban markets with large blocks of vacant space that are dragging down the macro statistics. |
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