Office REIT Hopes to Zero in on Vacancies

In each of the properties, Great Lakes upgraded the common areas, priced the space at 15% to 20% below of the cost of new space and is offering incentives to brokers in addition to commissions, says Kim S. Mills, senior vice president of leasing.

Great Lakes has 41,000 sf available in its six-story, 149,494-sf Lisle Executive Center at 3030 Warrenville Rd. in that west suburb. The East-West Corridor's direct vacancy rate has climbed to 14%, Mills says, but Mills remains optimistic. "Our marketing efforts are starting to bear fruit," he adds.

The REIT has 90,000 sf available at its 198,304-sf Park Plaza project in Milwaukee. "This market's very attractive but it's located within a submarket that's seen unwarranted building," says Mills adding Great Lakes is talking with five prospective tenants.

Back in Illinois, Great Lakes has 23,000 sf at 62,081-sf 191 N. Waukegan Rd. in north suburban Northfield. That submarket may be the hardest hit so far this year by an increase in sublease space. However, Mills says there is a prospect for 15,000 sf and a lease expansion possibility.

Despite a bearish forecast for suburban office leasing in the REIT's suburban markets outside Chicago, Milwaukee, Detroit, Columbus, Minneapolis, Denver and Cincinnati, Great Lakes' stock rose 2.1% on its earnings report Friday to $17.25.

"Recession or no recession, we are clearly witnessing a dramatic slowdown in leasing activity across all of our markets," says President and COO Patrick R. Hunt.

While the REIT's own occupancy rate rose to 92.4%, Hunt conceded it is taking longer to fill vacancies, even though 54% of its 2001 expirations have been rolled over.