CHICAGO—According to the new MBRE Index,landlords of the 30 newest class A office buildings in downtownChicago saw their occupancy levels remain relatively stable in thesecond quarter. The direct vacancy rate did rise 40 bps to 10.75%,but this rate has averaged about 10.45% over the past two years,and has fluctuated very little.

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However, overall direct vacancy in the CBD has fallen, the firmfound. In fact, the gap in rates between the 30 trophy propertiesand all the rest has shrunk to only 3.2 percentage points. “Thistwo and a half year low indicates that class B and C properties areexperiencing the benefits of the recovery while class A hascontinued to remain as strong as ever,” the study found.

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And in the five newest buildings, including 300 N. LaSalle, 155N. Wacker and 353 N. Clark, the average direct vacancy rate hasshrunk to only 2.8%, according to MBRE. “These buildings representsome of the best class A property in the CBD and their essentiallyfully leased status indicates a healthy demand for trophyspace.”

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MBRE tagged the new lease by Valence Health for125,000-square-feet in 540 W. Madison as the largest in the index.Outside of the index, the two largest recent leases wereEnova's at 175 W. Jackson for 160,240-square-feetand Wintrust Financial's for 150,000-square-feetat 231 S. LaSalle. “These two transactions are emblematic of thedearth of large blocks of affordable space in trophy properties andindicate why the vacancy spread between the MBRE Index and the restof the market is shrinking.”

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.