Market Trends in Chicago

With the national unemployment edging towards 8%, commercial real estate executives are hoping that this points towards better times ahead.  According to CoStar, the Chicago office vacancy rate fell to 14.8% in the fourth quarter 2011, down from 15% in the third  quarter.  Respondents to a Real Estate Roundtable Economic Survey found that, “industry executives’ expectations for growth this year are improved, but hindered by concerns about underlying macroeconomic and political risks”. 

What does this mean for office tenants? Building owners are starting to pull back on concessions such as free rent and tenant improvement allowances while being more conservative with increases in asking rent.  If the unemployment rate keeps on dropping ( Bureau of Labor expects the rate to be mid 7% by November) we could see asking rents going north quickly.  In other words, if’ you’re considering a move or lease renewal in the next twelve months, now may be the time to act.