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Central Business District office demand started off strong in Q1, with positive net absorption and a healthy vacancy rate, even as the openings of 150 North Riverside and River Point are expected to increase shadow space and vacancies later this year.
The CBD vacancy rate ended Q1 at 11.1%, according to MB Real Estate's Q1 2017 market overview. High demand resulted in nearly 734K SF of positive net absorption, led by Outcome Health's 400K SF lease at 515 North State and Neilsen's expansion to 144K SF as it consolidates its suburban offices to downtown. Sublease space decreased by 111K SF in Q1; the available sublease space now stands at 3.9M SF.
Investment sales saw a slow start to the year, with only four transactions totaling $549M. But the strongest takeaway from the report is a bullish forecast for demand to balance out the new inventory in the market from 150 North Riverside and River Point, the first two office buildings built in the CBD since 2009.
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