Strong Office Market Sees Tech Slowdown

Hines’ River Point development at 444 W. Lake St. will be one of the more costly buildings in the market, but has not had any trouble attracting tenants.

CHICAGO—As reported earlier this week in GlobeSt.com, the Chicago office market has recently seen a lot of leasing activity and rising rental rates. About 2.8 million square feet was leased in the second quarter, according to Savills Studley new second quarter report, and 2.4 million square feet in the first. That brings the total for the four most recent quarters to 13.3 million square feet, far more than the long-term annual average of 8.9 million square feet.

But although other developments this year can’t exactly be termed storm clouds, they do show that the current picture is more complicated. The availability rate recently went up, for example, an increase that Savills Studley partly attributes to the new class A space underway in the West Loop and Fulton Market area. And amidst a bit of a slowdown among tech companies, the supply of sublease space has also started to rise.