Tenants and Investors Finding Great Suburban Opportunities

Blackstone recently sold Westbrook Corporate Center in Westchester for $132 million, or about $113 per square foot, to Group RMC.

CHICAGO—Leasing activity in Chicago’s suburban region fell for the first time since the fourth quarter of 2017, dropping by more than 20% to 1.1 million square feet, according to a new report on the office sector from Savills Studley. Other statistics also illustrate that overall, the suburban market now struggles after enjoying a very modest recovery from the recession.

Tenants have leased about five million square feet in the four most recent quarters, falling well short of the market’s long-term average, the report says. The overall availability rate jumped by 170 bps to 28.3%, and the class A availability rate rose by 60 bps to 27.4%. And the average overall asking rent dipped by 0.4% to $23.39 while the class A asking rent fell by 0.8% to $26.60.