After Tough 2016, Suburban Office Improves

The Schaumburg Corporate Center, a three building, one-million-square-foot complex, was just acquired by GlenStar Properties LLC for $70 million.

CHICAGO—The region’s suburban office market recorded a slight drop in the overall vacancy rate during the first quarter, a welcome break from 2016, when vacancy increased in three out of four quarters, according to NAI Hiffman, which just released its latest market update. In the fourth quarter, vacancy had increased by 153 bps, largely due to the relocation or down-sizing of suburban mainstays like Zurich Insurance and AT&T.

No company probably better exemplifies both the challenge and promise of the suburban office market than Zurich Insurance. It left its former Schaumburg headquarters last fall, leaving a big hole in the northwest suburban market, but by developing a $333 million complex nearby, it also showed how desirable the region remains for many class A users.