Suburban Office Market Showing Signs of Life

GlenStar Properties is seeking an anchor tenant for this proposed tower along the expressway near O’Hare.

CHICAGO—On the surface, the Chicago suburban office market still looks troubled. It continues to have an elevated vacancy rate, and experienced negative absorption during 2016. But behind the scenes, some developers see opportunity, especially when it concerns demand for new class A space, and have begun unveiling proposals for new developments. Time will tell if this group can secure prospective tenants for their proposed buildings and begin breaking ground.

The market remained relatively stable in the fourth quarter of 2016, ending the year with an overall direct vacancy rate of 20.24% percent, up from 19.86% at the end of 2015, according to a new report from MB Real Estate. And there was 327,562 square feet of negative absorption, which brought the year’s total down to 686,468 square feet of negative absorption.