Downtown Office Vacancy Rates Rising

Although their vacancy numbers differ by 2.7 million sf, both firms say vacancy has increased since the first quarter, with CB Richard Ellis reporting an increase of seven-tenths of a percentage point. The firm points to mergers and corporate reshuffling as a culprit, most notably Bank One's decision to sublease 580,000 sf at 131 S. Dearborn St. following its acquisition by JPMorgan Chase. Occupancy at Bank One Corporate Center remains stuck below 70%.

Trammell Crow Co. reports the East Loop is the weakest submarket with an 18.8% overall vacancy rate, with River North and the Central Loop checking in at 18.4%. That is a 1.4-percentage-point jump in the Central Loop. However, the firm pulls out LaSalle Street in its report, noting vacancy there has dropped to 10.8%.

CB Richard Ellis notes another disparity. While it reports negative net absorption of 696,000 sf Downtown during the second quarter, class-A space showed positive absorption of 273,000 sf, according to the firm's second-quarter report.

"Despite another quarter of strong economic growth, slightly higher vacancies and negative net absorption tempered optimism for a rapid recovery," says CB Richard Ellis senior vice president David Tropp.