Signs of Slowdown in Build-To-Suit Market

SKOKIE, IL-Build-to-suit activity in the market fell sharply in the second half of 2000, according to the Alter Group’s Build-To-Suit Report, and the forecast is for a 15% drop in 2001. The 4.7 million sf of build-to-suit activity in the five-county area was the slowest second half in the last six years.

The 23% drop-off from the second half of 1999 followed a first half that saw 5.1 million sf of build-to-suit activity, which was a 25% jump over the first half of 1999.

“The first half of the year was the busiest on record, leading to over-optimistic projects about the second half, which were debunked by the softening in the market,” says vice president Thomas M. Boyle. “It is important to note, however, that vacancy rates remain healthy in the major submarkets, which indicates a relative balance of supply and demand.” However, there are concerns about the technology sector, Boyle adds. “Only time will tell if all the deals signed in 2000 will be completed as planned.”