NOT AS BAD AS IT SEEMS

Sublease space in Chicago is well above the statistical average, but not nearly as bad as it seems, MB Real Estate's Gary Denenbergtells us. Sublease vacancy is typically around 2.5M SF, or about 2% of the total 120M SF of office space downtown, he says. At the end of 2010, it was reported at 3.6M SF—just 1% more of the total market than usual, and much less than the 6.2M SF reported in 2001 after the tech crash. Gary says that's because today's tenants planned aheadbetter. They didn't count on growing the number of employees in their offices as quickly and only rented the necessary space or a little bit more. Even better news? He doesn't think it's affecting direct vacancy much because tenants looking for space can get good deals on direct leases.

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