FOURTH
QUARTER
2013
CHICAGO SUBMARKET SNAPSHOTS
F OU RT H Q UA RT E R
2013 CHICAGO
TABLE OF CONTENTS SE CT ION ONE
CHICAGO CENTRAL BUSINESS DISTRICT
MARKET OVERVIEW
CBD SUBMARKET SNAPSHOTS 01 02 03 04 05 06 07
MARKET OVERVIEW
Central Business District Map Central Loop East Loop North Michigan Avenue River North South Loop West Loop
SE CT ION T WO
SUBURBAN CHICAGO
SUBURBAN SUBMARKET SNAPSHOTS
2013
08 09 10 11 12
Suburban Map East-West North Northwest O’Hare
SE CT ION T H RE E
ADDITIONAL INFORMATION 13 About MB Real Estate
The Chicago Market Overview is published quarterly by MB Real Estate. To obtain additional copies or for further information, please contact:
181 West Madison Street, Suite 4700 Chicago, Illinois 60602 (312) 726-1700 www.mbres.com
CENTRAL BUSINESS DISTRICT
SUBMARKET MAP
FEATURES FOURTH QUARTER 2013 | CHICAGO MARKET OVERVIEW
1
The turbulence continues
The Central Loop saw a negative absorption of 34,000 square feet this quarter. This was driven by Class A buildings contributing 51,000 square feet. Class A continues the trend of being the worst performing segment in the Central Loop for the third straight quarter. On a positive note, the Central Loop has a lower direct vacancy rate than the CBD as a whole coming in at 13.47% compared to 14.54%.
LARGEST BLOCKS OF DIRECT AVAILABILITY Building Address
Size (sf)
Building Class
222 N LaSalle St
200,686
B
10 S Dearborn St
193,319
A
11 S LaSalle St
146,313
C
130,968
A
131 S Dearborn St
128,622
A
180 N LaSalle St
101,695
B
1 N Dearborn St
97,261
B
2 N LaSalle St
96,753
B
35 W Wacker Dr
75,000
B
Investment activity continued in the fourth quarter with a few office buildings changing hands. 181 West Madison was purchased by CBRE for $302.0 million or $322 per square foot. The building was last sold was in 2006 for $294 million, or $314 per square foot.
120 S LaSalle St
69,519
B
* Indicates future available space **Block of space will be vacated in the upcoming quarter Italicized addresses indicate new blocks this quarter
20 North Clark also sold last month for $64 million, or $167 per square foot. This was $5.25 million higher than its purchase price in March 2008. Hamilton Partners sold the building to Beacon Investment Properties. The Central Loop’s boundaries are the Chicago River (North), Wells Street (West), State Street (East), and Van Buren Street (South).
CENTRAL LOOP SUMMARY
A
B
C
Total
13,580,514
14,309,358
8,617,327
36,507,199
(225,311)
186,321
11,765
(27,225)
Direct Vacancy Rate
10.7%
14.9%
15.5%
13.7%
Total Vacancy Rate (Direct + Sublease)
14.3%
17.7%
16.0%
16.0%
Inventory (square feet) Year to Date Absorption (square feet)
SUBMARKET SNAPSHOTS
77 W Wacker Dr
Although there were few large lease transactions in the fourth quarter for the Central Loop, one is worth mentioning. BMO Financial Institution signed an 11-year lease for 20,000 square feet at 115 South LaSalle. The firm will take occupancy of the 23rd and 25th floors in March 2014.
CENTRAL BUSINESS DISTRICT
CENTRAL LOOP
Numbers in parantheses are negative
CENTRAL LOOP SUBMARKET HISTORICAL DIRECT VACANCY 20% 18% 16% 14% 12% 10% 8%
17.5%
15.2%
11.8%
11.4%
12.7%
13.6%
13.8%
13.2%
13.5%
2%
15.2%
4%
14.7%
6%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
FOURTH QUARTER 2013 | CHICAGO SUBMARKET SNAPSHOTS
2
2
Class C drops significantly in final quarter The East Loop has the second highest year-end positive absorption of 252,000 square feet. From Class A to Class C, all segments contributed to the positive absorption with Class B leading the pack at 132,000 square feet. While the East Loop had a strong year overall, the fourth quarter did not follow the trend of the previous three. Class A and B saw minor positive absorption in the fourth quarter and Class C had negative absorption of 34,000 square feet. One large lease that occurred in the fourth quarter was signed by Senior Lifestyle Corporation at 111 East Wacker for 26,500 square feet. This transaction helped Class A buildings in the East submarket maintain a positive absorption for the fourth quarter.
LARGEST BLOCKS OF DIRECT AVAILABILITY Building Address
Size (sf)
Building Class
200 E Randolph St
339,761
A
130 E Randolph St
256,362
B
303 E Wacker Dr
188,949
B
233 N Michigan Ave
114,702
B
401 S State St
110,898
C
333 S Wabash Ave
92,473
B
111 E Wacker Dr
80,238
B
33 S State St
70,107
C
205 N Michigan Ave
65,463
B
* Indicates future available space
The East Loop is bordered by the Chicago River (North), State Street (West), Lake Shore Drive (East), and Van Buren Street (South). It is inhabited mostly by advertising and media firms and corporate tenants.
A
B
C
Total
4,059,412
10,605,108
8,302,263
22,966,782
100,243
132,246
19,716
252,205
Direct Vacancy Rate
15.6%
24.0%
13.3%
18.6%
Total Vacancy Rate (Direct + Sublease)
17.0%
25.5%
14.1%
19.9%
Inventory (square feet) Year to Date Absorption (square feet)
SUBMARKET SNAPSHOTS
No buildings in the East Loop changed hands in the fourth quarter.
EAST LOOP SUMMARY
CENTRAL BUSINESS DISTRICT
EAST LOOP
Numbers in parantheses are negative
EAST LOOP SUBMARKET HISTORICAL DIRECT VACANCY 25% 20% 15%
18.4%
22.4%
19.1%
14.2%
12.1%
16.3%
20.2%
19.3%
19.7%
18.6%
5%
17.2%
10%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
FOURTH QUARTER 2013 | CHICAGO SUBMARKET SNAPSHOTS
3
3
A few leases help, but cannot fix everything
The North Michigan Avenue submarket experienced negative absorption of 27,000 square feet after two consecutive quarters of positive absorption. The submarket will end the year with overall positive absorption of 96,000 square feet and a slight increase from the third quarter in direct vacancy to 19.15%. After only a few small leases were signed in the third quarter in this submarket, the fourth quarter provided more action. A large lease was signed by Kraft at 401 North Michigan Avenue for 29,000 square feet, and Talent Partners also signed a 29,000 square foot lease at 541 North Fairbanks at the end of October.
Size (sf)
Building Class
515 N State St
350,906
A
101 E Erie St
227,569
A
401-465 E Illinois St
210,000
C
410 N Michigan Ave
125,584
B
401 N Michigan Ave
104,990
B
360 N Michigan Ave
76,855
C
455 N Cityfront Plaza Dr
70,531
A
211 E Chicago Ave
53,052
C
435-445 N Michigan Ave
51,231
C
* Indicates future available space **Block of space will be vacated in the upcoming quarter Italicized addresses indicate new blocks this quarter
The North Michigan Avenue submarket is home to retailers, hotels, restaurants, entertainment venues, advertising and marketing agencies, and the largest Northwestern Memorial Hospital campus. Its borders include Division Street (North), State Street (West), Lake Michigan (East), and the Chicago River (South).
NORTH MICHIGAN AVENUE SUMMARY WEST LOOP SUMMARY Inventory Inventory(square (squarefeet) feet) Year YeartotoDate DateAbsorption Absorption (square (square feet) feet)
AA
BB
CC
Total Total
3,949,554 27,205,432 52,725 413,354
4,712,967 9,771,008 212,431 16,910
4,228,590 6,273,270 (168,795) (51,755)
12,891,112 43,249,710 96,361 378,510
16.5% 13.2%
18.9% 11.0%
21.9% 15.6%
19.2% 13.1%
21.1% 16.4%
19.9% 13.5%
23.6% 16.7%
21.5% 15.8%
Direct DirectVacancy VacancyRate Rate Total TotalVacancy VacancyRate Rate(Direct (Direct + + Sublease) Sublease)
SUBMARKET SNAPSHOTS
The CBD’s second smallest submarket saw very little investment activity again this quarter. There was only one Class B building sold from October through December. 444 North Wabash sold for $8.15 million or $124 per square foot.
LARGEST BLOCKS OF DIRECT AVAILABILITY Building Address
CENTRAL BUSINESS DISTRICT
NORTH MICHIGAN AVENUE
Numbers in parantheses are negative
NORTH MICHIGAN AVENUE SUBMARKET HISTORICAL DIRECT VACANCY 25% 20% 15%
12.7%
14.0%
14.0%
11.8%
11.4%
16.7%
18.2%
19.5%
20.5%
19.2%
5%
10.8%
10%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
FOURTH QUARTER 2013 | CHICAGO SUBMARKET SNAPSHOTS
44
4
A small decline in overall absorption from previous quarter After having a promising third quarter, the River North submarket experienced a drop in occupancy by only 700 square feet. Class C took the hardest hit with 28,000 square feet in negative absorption. Class B had a strong quarter with positive absorption of 30,000 square feet but it wasn’t enough to offset the combined decline in Class A and Class C. With this minor change in overall absorption, River North held onto its 9.1% direct vacancy rate.
LARGEST BLOCKS OF DIRECT AVAILABILITY Building Address
Size (sf)
600 W Chicago Ave
Building Class
117,101
B
350 W Mart Ctr
87,392
C
222 Merchandise Mart Plz
81,225
B
363 W Erie St
63,876
C
CENTRAL BUSINESS DISTRICT
RIVER NORTH
* Indicates future available space
**Block of space will be vacated in the upcoming quarter River North saw a lot of small leases signed in the fourth quarter including one Italicized addresses indicate new blocks this quarter for 2100 Xenon. The asset management firm signed a lease at 353 North Clark in November for 5,000 square feet. Riskonnect was another company to sign a lease in October for 4,400 square feet at 212 West Superior. Both companies fit the mold of the new types of tenants that are flocking to River North’s technology hub.
The borders of the River North submarket are defined as Division Street (North), Racine Avenue (West), State Street (East), Fulton Street, and the Chicago River (South). Historically it has been home to small, older buildings that cater to furniture galleries and small businesses but it has recently become a hub for technology and trading firms.
RIVER NORTH SUMMARY Inventory (square feet)
A
B
C
Total 13,266,884
3,983,086
3,828,051
5,455,747
Year to Date Absorption (square feet)
22,263
91,844
(114,761)
(654)
Direct Vacancy Rate
10.4%
6.4%
10.1%
9.1%
Total Vacancy Rate (Direct + Sublease)
11.6%
11.4%
12.3%
11.9%
SUBMARKET SNAPSHOTS
All of the investment activity that occurred in River North this quarter involved the typical buildings you see in this submarket. Three of the four buildings sold were under 50,000 square feet total. The Class C building greater than 50,000 square feet was 224-240 West Huron. This 93 year old, 66,000 square foot building sold for $7.0 million or about $106 per square foot.
Numbers in parantheses are negative
RIVER NORTH SUBMARKET HISTORICAL DIRECT VACANCY 25% 20% 15%
19.3%
14.5%
12.6%
10.6%
9.2%
15.8%
13.6%
11.7%
9.1%
9.1%
5%
11.9%
10%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
FOURTH QUARTER 2013 | CHICAGO SUBMARKET SNAPSHOTS
5
5
Minor changes in the CBD’s smallest submarket The smallest submarket in the CBD saw negative absorption of 6,200 square feet this quarter, all coming from Class C buildings. The only Class A building in the South Loop is 440 South LaSalle and it saw zero net absorption in the fourth quarter. Other than the first and third quarters of 2013, the South Loop has not had positive net absorption since the third quarter of 2009.
LARGEST BLOCK OF DIRECT AVAILABILITY Building Address
Size (sf)
Building Class
440 S LaSalle St
140,859
A
800 S Wells St
55,000
C
* Indicates future available space
CENTRAL BUSINESS DISTRICT
SOUTH LOOP
The dialogue in the South Loop pertains primarily to the condominium market. Many of the newer multifamily developments are struggling to make sales. Although this submarket has direct access to CTA trains, it is not as highly desired of a location in the city as was expected. No investment activity occurred this quarter. The South Loop has struggled to attract new tenants primarily because the majority of buildings are Class C and tenants are looking to take advantage of the low rents in Class A and B buildings in other submarkets.
SOUTH LOOP SUMMARY Inventory (square feet)
A
C
Total
1,019,325
1,120,393
2,139,718
Year to Date Absorption (square feet)
23,888
(2,885)
21,003
Direct Vacancy Rate
27.4%
22.7%
24.9%
Total Vacancy Rate (Direct + Sublease)
27.4%
22.7%
24.9%
SUBMARKET SNAPSHOTS
The boundaries of the South Loop include Van Buren Street (North), I-90/I-94 (West), Lake Shore Drive (East), and 16th Street (South). The South Loop is populated primarily with education, small businesses, and converted residential properties.
Numbers in parantheses are negative
SOUTH LOOP SUBMARKET HISTORICAL DIRECT VACANCY 30% 25% 20% 15%
19.1%
16.3%
12.3%
14.5%
14.5%
12.9%
18.6%
23.0%
27.3%
24.9%
5%
20.5%
10%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
FOURTH QUARTER 2013 | CHICAGO SUBMARKET SNAPSHOTS
6
6
Submarket’s popularity continues The West Loop saw negative absorption in the fourth quarter due in large part to lease transactions that occurred in the third quarter, such as McDermott Will & Emery’s 225,000 square foot lease at 444 West Lake. These large deals that happened in the third quarter took big sections of contiguous space off the market. Class C buildings also contributed 55,000 square feet to the negative absorption this quarter. While this sounds bleak, West Loop Class A buildings had the highest positive absorption of any buildings in the CBD with 23,000 square feet.
LARGEST BLOCKS OF DIRECT AVAILABILITY Building Address
Size (sf)
Building Class
311 W Monroe St
354,017
C
500 W Monroe St
311,049
A
227 W Monroe St
272,101
A
540 W Madison St
250,553
A
550 W Jackson Blvd
192,174
A
233 S Wacker Dr
189,730
A
111 N Canal St
175,353
C
The West Loop’s borders are defined as the Chicago River (North), I-94/I-90 (West), Wells Street (East), and Van Buren Street (South).
WEST LOOP SUMMARY
A
B
C
Total
27,205,432
9,771,008
6,273,270
43,249,710
413,354
16,910
(51,755)
378,510
Direct Vacancy Rate
13.2%
11.0%
15.6%
13.1%
Total Vacancy Rate (Direct + Sublease)
16.4%
13.5%
16.7%
Inventory (square feet) Year to Date Absorption (square feet)
SUBMARKET SNAPSHOTS
The West Loop is quickly becoming a new tech hub in the CBD. With most 111 S Wacker Dr 114,686 A technology based companies, come unique office space requests. More 2 N Riverside Plz 108,340 C frequently we are seeing open loft style spaces with non-assigned desks to 71 S Wacker Dr 99,378 A allow for collaboration. The conversion of 1000 West Fulton (1K Fulton) into office space for Google is ongoing and projected to be completed by early * Indicates future available space 2016. The announcement of GoGo moving to the West Loop came in the fourth **Block of space will be vacated in the upcoming quarter Italicized addresses indicate new blocks this quarter quarter as well, another suburban relocation. They will lease 234,000 square feet at 111 North Canal. The company cites the city’s considerable efforts to raise Chicago’s profile as a tech hub and a desire to be located at its epicenter as its reasons for the relocation.
CENTRAL BUSINESS DISTRICT
WEST LOOP
15.8%
Numbers in parantheses are negative
WEST LOOP SUBMARKET HISTORICAL DIRECT VACANCY 20% 18% 16% 14% 12% 10% 8%
17.3%
11.5%
10.2%
11.8%
16.6%
15.8%
14.2%
13.9%
13.1%
2%
14.4%
4%
14.6%
6%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
FOURTH QUARTER 2013 | CHICAGO SUBMARKET SNAPSHOTS
7
7
SUBURBAN CHICAGO
SUBMARKET MAP
FEATURES FOURTH QUARTER 2013 | CHICAGO MARKET OVERVIEW
8
High investment activity continues The East-West submarket had negative absorption of almost 600,000 square feet this quarter while the vacancy rate was 60 basis points below the suburban average. This was a difficult quarter in which every building Class had negative absorption with the majority coming from Class A with 560,000 square feet.
LARGEST BLOCKS OF DIRECT AVAILABILITY
The East-West submarket saw a lot of investment activity in the fourth quarter. One of the largest transactions was 215 Shuman Boulevard in Naperville which sold for $24 million or $114 per square foot. Another sale included the two properties at 1751 and 1771 West Diehl in Naperville. They went for just under $23 million or $104 per square foot.
City
700 Oakmont Ln
Westmont
256,767
a
4201 Winfield Rd
Warrenville
249,996
A
2400 Cabot Dr
Lisle
205,633
A
2655 Warrenville Rd
Downers Grove
149,896
A
2441 Warrenville Rd
Lisle
148,423
A
3500 Lacey Rd
Downers Grove
112,834
A
535 E Diehl Rd
Naperville
83,792
B
3050 Highland Pky
Downers Grove
74,319
A
1333 Butterfield Rd
Downers Grove
70,251
A
1000 Royce Blvd
Oakbrook Terrace
70,000
A
Investment activity occurred in Oak Brook as well with the sale of the Oak Brook Technology Center located at 800 and 810 Jorie Boulevard. The two-building property went for $16.25 million or about $84 per square foot and was purchased by California-based Server Farm Realty, Inc.
Size (sf)
Building Class
* Indicates future available space **Block of space will be vacated in the upcoming quarter Italicized addresses indicate new blocks this quarter
The East-West submarket encompasses Cook, Dupage, Kane, Kendall, and Will Counties, with major cities including Downers Grove, Lisle, Naperville, and Oak Brook.
EAST-WEST SUMMARY
A
B
C
Total
20,175,666
14,487,781
5,118,620
39,782,067
(244,250)
(126,654)
24,289
(346,615)
Direct Vacancy Rate
20.6%
23.4%
24.4%
22.1%
Total Vacancy Rate (Direct + Sublease)
24.6%
27.3%
24.6%
25.6%
Inventory (square feet) Year to Date Absorption (square feet)
SUBMARKET SNAPSHOTS
Building Address
SUBURBAN CHICAGO
EAST-WEST
Numbers in parantheses are negative
EAST-WEST SUBMARKET HISTORICAL DIRECT VACANCY 25% 20% 15%
20.1%
19.3%
17.1%
17.2%
18.9%
21.5%
22.1%
21.6%
22.4%
22.1%
5%
22.6%
10%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
FOURTH QUARTER 2013 | CHICAGO SUBMARKET SNAPSHOTS
9
Strongest year since 2007 The North submarket saw 19,000 square feet of positive absorption in the fourth quarter. Class B buildings contributed the most positive absorption with 23,000 square feet. Class A buildings were the only sector in the North that saw negative absorption of 6,000 square feet.
LARGEST BLOCKS OF DIRECT AVAILABILITY City
600 N US Highway 45 *
Libertyville
1000 Milwaukee Ave *
Glenview
25 Tri State International *
Size (sf)
Building Class
1,121,186
A
405,039
A
Lincolnshire
208,808
A
75 Tri State International *
Lincolnshire
208,808
A
300 Tower Pky *
Lincolnshire
175,545
A
1200 Lakeside Dr *
Bannockburn
170,165
A
1 Overlook Pt *
Lincolnshire
111,327
A
2355 Waukegan Rd *
Bannockburn
106,495
A
3 Parkway Blvd N *
Deerfield
79,101
A
2-4-6 Genesee St *
Lincolnshire
75,996
A
* Indicates future available space
An investment deal totaling $61.5 million occurred early in the fourth quarter for two buildings located at 1629 and 1603 Orrington Avenue in Evanston. The largest transaction in the submarket this quarter the sale was valued at $181 per square foot. Additionally, a $26.2 million, or $149 per square foot sale was completed at 2301 Patriot Boulevard in Northbrook in the fourth quarter. The North submarket is located within portions of Cook and Lake Counties, with major cities including Bannockburn, Deerfield, Evanston, Glenview, Highland Park, Lake Forest, Northbrook, and Vernon Hills.
NORTH SUMMARY Inventory (square feet)
A
B
C
Total
16,872,823
7,388,583
2,506,651
26,768,056
Year to Date Absorption (square feet)
23,940
107,166
100,580
231,686
Direct Vacancy Rate
21.5%
16.6%
18.8%
19.9%
Total Vacancy Rate (Direct + Sublease)
26.9%
18.4%
19.6%
23.9%
SUBMARKET SNAPSHOTS
The largest transaction of the year in the North submarket occurred in Glenview. Illinois Tool Works purchased the former Kraft Foods, Inc. campus from Itasca-based Hamilton Partners. The Illinois manufacturing conglomerate plans to utilize 48 acres of the property along with two buildings totaling approximately 503,000 square feet. The remaining eight acres of the campus was sold to an undisclosed buyer.
Building Address
SUBURBAN CHICAGO
NORTH
Numbers in parantheses are negative
NORTH SUBMARKET HISTORICAL DIRECT VACANCY 25% 20% 15%
17.6%
16.5%
16.1%
12.5%
14.5%
17.5%
19.6%
20.6%
20.7%
19.9%
5%
17.5%
10%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
FOURTH QUARTER 2013 | CHICAGO SUBMARKET SNAPSHOTS
10
Improvements continue
The Northwest submarket saw the largest positive absorption of any suburban submarket this quarter. It had 38,000 square feet of absorption, with the majority coming from Class B buildings.
LARGEST BLOCKS OF DIRECT AVAILABILITY Building Address
A large lease was signed in the Northwest submarket by Flexera Software. The software licensing management company signed a 75,000 square foot lease within Hamilton Lakes in Itasca. The firm will be utilizing 46 percent of the space vacated by Gogo Inc. Gogo announced a move downtown early in October.
Building Class
21440 Lake Cook Rd
Deer Park
277,200
A
2850 W Golf Rd
Elgin
252,266
B
1707 N Randall Rd
Hoffman Estates
196,088
A
5550 Prairie Stone Pky
Schaumburg
193,601
A
200 N Martingale Rd
Rolling Meadows
186,740
A
1000 E Woodfield Rd
Itasca
183,488
B
1701 Golf Rd
Schaumburg
159,824
A
3890 Salem Lake Dr
Rolling Meadows
150,000
B
850 E Algonquin Rd
Hoffman Estates
132,969
B
854 E Algonquin Rd
Hoffman Estates
132,969
B
*Block of space is for future occupancy **Block of space wil be vacated in the upcoming quarter Italicized addresses indicate space is new on the market
The Northwest submarket is located within portions of Cook, Kane, Lake, and McHenry Counties, with major cities including Arlington Heights, Itasca, Rolling Meadows, and Schaumburg.
NORTHWEST SUMMARY
Size (sf)
A
B
C
Total
18,505,369
9,618,235
2,559,044
30,682,648
(14,767)
218,201
39,325
242,758
Direct Vacancy Rate
21.2%
31.0%
28.6%
24.9%
Total Vacancy Rate (Direct + Sublease)
24.0%
31.7%
29.8%
Inventory (square feet) Year to Date Absorption (square feet)
SUBMARKET SNAPSHOTS
Numerous small investment transactions occurred in the Northwest submarket with the largest a 42,000 Class B office property in Schaumburg. Located at 1051 East Woodfield Road, the property sold for $2.3 million, or $55 per square foot.
City
SUBURBAN CHICAGO
NORTHWEST
26.9%
Numbers in parantheses are negative
NORTHWEST SUBMARKET HISTORICAL DIRECT VACANCY 30% 25% 20% 15%
15.2%
16.5%
18.1%
18.8%
21.3%
22.7%
24.4%
27.7%
25.8%
24.9%
5%
18.8%
10%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
FOURTH QUARTER 2013 | CHICAGO SUBMARKET SNAPSHOTS
11
Disappointing final quarter The smallest suburban submarket struggled this quarter causing the year-to-date absorption to become negative. The O’Hare submarket had 128,000 square feet in negative absorption with the majority coming from Class B buildings.
LARGEST BLOCKS OF DIRECT AVAILABILITY
While it was a quiet quarter for lease transactions, DHL Global Forwarding has broken ground on its new $35 million facility. The warehouse, once completed, will include 53,000 square feet of office space. Construction is scheduled for completion in November 2014.
City
9401 W Grand Ave 5450 N Cumberland Ave
Size (sf)
Building Class
Chicago
269,014
C
Schiller Park
143,525
B
2350-2360 E Devon Ave
Rosemont
142,596
A
8420 W Bryn Mawr Ave
Rosemont
104,164
B
5100 River Rd
Schaumburg
74,988
A
4825 N Scott St
Schaumburg
74,656
B
1350 E Touhy Ave
Schaumburg
71,367
A
10255 W Higgins Rd
Mount Prospect
69,285
A
9500 W Bryn Mawr Ave
Arlington Heights
60,680
B
999 E Touhy Ave
Rolling Meadows
59,710
B
* Indicates future available space **Block of space will be vacated in the upcoming quarter
The O’Hare submarket is located in northwestern Cook County surrounding O’Hare International Airport, with major cities including northwestern Chicago, Elk Grove Village, and Rosemont.
O'HARE SUMMARY Inventory (square feet)
A
B
C
Total
7,886,476
4,201,057
2,469,359
14,556,892
Year to Date Absorption (square feet)
61,413
(144,235)
(29,258)
(112,080)
Direct Vacancy Rate
17.7%
31.5%
36.7%
24.9%
Total Vacancy Rate (Direct + Sublease)
19.5%
32.1%
36.7%
SUBMARKET SNAPSHOTS
nvestment activity in the O’Hare submarket remained slow. The fourth quarter only saw a few small transactions take place including 1500 West Higgins Road in Park Ridge which sold for $2.7 million, or $112 per square foot.
Building Address
SUBURBAN CHICAGO
O’HARE
26.1%
Numbers in parantheses are negative
O’HARE SUBMARKET HISTORICAL DIRECT VACANCY 30% 25% 20% 15%
19.4%
20.8%
18.2%
19.0%
21.4%
27.3%
26.1%
26.0%
24.9%
24.9%
5%
20.0%
10%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
FOURTH QUARTER 2013 | CHICAGO SUBMARKET SNAPSHOTS
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Our mission is to provide clients and investors with extraordinary real estate value and unlimited support
MB REAL ESTATE
ABOUT MB REAL ESTATE
At MB Real Estate, our corporate mission is to maximize the value of our clients’ real estate by creating timely and innovative solutions that meet their unique needs and objectives. We offer the highest level of real estate support with our team of committed, results-driven experts in asset and facilities management, leasing, tenant representation, development, project management, and investment services. Supported by dedicated accounting, marketing, human resources, and information technology teams, our unique full-service firm is an industry leader in local and national corporate real estate.
MB REAL ESTATE HEADQUARTERS 181 West Madison, Suite 4700 Chicago, Illinois 60602 phone: 312.726.1700 fax: 312.807.3853
EAST COAST REGIONAL HEADQUARTERS 335 Madison Avenue, 14th Floor New York, New York 10017 phone: 212.350.2300 fax: 212.350.2301
DEPARTMENT LEADERSHIP PATRICIA ALUISI Executive Vice President & Chief Administrative Officer/General Counsel
MARK A. BUTH Executive Vice President & Managing Director of Leasing Services
ANDREW J. DAVIDSON Executive Vice President & Managing Director of Corporate Services & Tenant Advisory
GARY A. DENENBERG Executive Vice President & Managing Director of Leasing Services
DAVID R. GRAFF Senior Vice President of Project Services
COMPANY LEADERSHIP PETER E. RICKER Chairman & CEO
JOHN T. MURPHY President
MAUREEN G. GROVE Vice President & Managing Director of Accounting Services
DANIEL J. NIKITAS Executive Vice President of Corporate Services & Tenant Advisory Services
KEVIN M. PURCELL Executive Vice President & Chief Operating Officer
PETER J. WESTMEYER Executive Vice President & Managing Director of Investment Services & MBRE Healthcare Group
FOURTH QUARTER 2013 | CHICAGO SUBMARKET SNAPSHOTS
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