THIS CONTENT WAS ORIGINALLY PUBLISHED ON THE SVN.COM BLOG
Top Office Market to Watch: Chicago, IL
Chicago started 2016 with an upward move in unemployment to 6.7% in January from 4.9% in September of 2015, according to the Bureau of Labor Statistics. Overall, Chicago recovered from the recession but employment levels still remain below their pre-2007 levels. The office sector has remained fairly flat with gains in employment registering annualized rates of growth of 1.1%, 0.5%, and –0.3% for Information, Financial Activities, and Business and Professional Services, respectively. Still, Chicago remains an international hub for business activities, and demand for office and other real estate investments has reached record highs, according to Real Capital Analytics®. They report that in 2015 over $8.5 billion in office properties transacted, an increase of 34.3% from 2014. Chicago’s economic diversity should serve the office market well, especially in the downtown core in 2016 and beyond.
Advisor Insights: SVN | Chicago Commercial
SVN Advisors at SVN | Chicago Commercial have some office market highlights to share:
Suburban Office continues to have its challenges in both occupancy and rent growth. The work force, particularly the millennials, want to live and work in Chicago, not the suburbs. Commuting is not where they want to spend their time. Even McDonald’s is moving into Chicago’s West Loop to occupy the former Harpo Studios and follows Google’s lead in attracting a young workforce in the West Loop, particularly well supported by train access on the L with a newly completed stop.
The adaptive re-use and re-configuration of existing office space and office buildings to collaborative, fun, and mobile-friendly space is dramatically changing the way work is accomplished and even the hours in which work is being done. Amenities are even more important and the “feel” of the space is critical including special lighting, “well space”, green buildings, high walkability scores and transportation friendly environments (walk, bike, Divvy, train (L) or bus to work).
Retail, restaurants, bars and services are all following these new employment and office locations especially in the West Loop and the central loop of Chicago. The last meat packers are about to leave Randolph Street and the former meat-packing area continues to morph into world-class restaurants, hotels, condos, lofts and apartment complexes.