Area Commercial Real Estate Industry Improving

December 27, 2010

The Chicago real estate market had a rough year, but signs of recovery are imminent in the downtown and suburban commercial markets.

Cushman & Wakefield of Illinois Inc. has released its latest trend report that shows the worst of the commercial real estate declines of our area could be over.

Among the results:

*Overall vacancy in the Central Business District peaked in the middle of 2010 at 16.6 percent. The third quarter number dropped to 16.5 percent and the firm projects the fourth quarter vacancy to end at 16.4 percent.

*The investment market saw record-low sales in 2009. So far this year, the market has recorded 4.9 million square feet of property sales compared to a mere 428,922 square feet last year.

The building at 555 Aptakisic Road in Lincolnshire needs tenants!

The new building at 555 Aptakisic Road in Lincolnshire needs tenants!

*Suburban vacancies have seen a slow decline of 0.5 percent throughout the year while leasing activity increased 41.8 percent from last year.

*Only one new suburban development was built in 2010. Bridge Development Partners finished construction at 555 Aptakisic Road in Lincolnshire at the beginning of the year. The 160,000-square-foot building was vacant then and reported no leasing activity through the rest of the year.

*Suburban investment activity more than doubled from 1.9 million square feet in 2009 to 4.3 million square feet in 2010. Almost 1.5 million of those square feet closed during this year’s fourth quarter.

Cushman & Wakefield said the Chicago market will see a bunch of large leases expire in the next few years with few buildings having the space to accommodate the large-users. No doubt developers will be all over with new business developments, which will hopefully lead to a much more successful future in the commercial Chicago real estate industry.

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