Suburban Office Market Holding Steady Despite Downturn

CHICAGO-Buyers of suburban office buildings may be busy in 2001 while tenants will be more cautious this year, according to real estate firm Cushman & Wakefield. Meanwhile, vacancy rates remain stable at 12.6% overall, ranging in the submarkets from 6.6% in the Northbrook area to 15.1% in Evanston.

Cushman & Wakefield reports sales of class A suburban office buildings were down to 1 million sf, led by 205,654-sf Chatham Center I to New Boston Fund Inc. However, Cushman & Wakefield predicts sales activity will increase as investors seek to buy below replacement cost. Chatham Center sold for $135 per sf, while 2121 Bannockburn Lake sold for $166 per sf.

Meanwhile, tenants still seek more amenities in space, in part to keep up with competition for labor. “Since recruitment is so competitive, companies want to do all they can to attract good employees,” says Rob Marquardt, a senior broker at Cushman & Wakefield’s Rosemont office. “We’re also witnessing changes in workspace environments. There are more open areas with fewer private offices. ‘Hoteling’ and ‘common work areas’ are other trends in which space is shared by employees who may work some of the time at home or may commute to other offices.”