CHICAGO-The Downtown Chicago office vacancy rate decline during third quarter 2000 from 8.3% to 8%, its lowest point since 1982 when the index jumped from 4.9 to 8.3%, according to a CB Richard Ellis report. The vacancy rate, which peaked at 19.9% in 1993, was 9.4% a year ago, according to CB Richard Ellis.

The net amount of space leased July through September was 638,463 sf, compared to 102,079 sf during the third quarter of 1999 and the five-year average for the period of 312,115 sf. Net absorption year-to-date is 2.6 million sf, up from 839,756 sf during the first nine months of 1999 and the five-year average for the period of 1.4 million sf.

User requirements were led by the technology sector, particularly the telecom and Internet infrastructure industry, which helped take up the slack after the slump in the spring. According to Jeff Lijeberg, a SVP in the Downtown Chicago office of CB Richard Ellis, “With top spaces being pursued by multiple tenants, decision making is continuing to accelerate.”

The vacancy rate for Downtown Chicago’s 44.4 million sf of class A buildings (measured in single-digits since late 1997) declined to 4.7% based on 563,854 sf of net absorption year-to-date, according to the CB Richard Ellis report. In the 41.9 million sf of class B buildings, vacancies fell to 8.7% based on 1.7 million sf of absorption. In the 20.9 million sf of class C properties (the majority developed prior to 1949), vacancies declined to 13.7% based on 293,722 sf of absorption.

About 25% of this absorption in Chicago’s CBD has been in its East Loop submarket where there’s proportionately a larger inventory of available space. Its vacancy rate dropped from 15.5% at year-end 1999 to 11.7%, according to the CB Richard Ellis report. Chicago’s Central Loop accounted for 42% of this year’s absorption, lowering its vacancy rate to 8.2%. Other submarket rates at the close of the third quarter were: West Loop–5.4%; North Michigan Avenue–7.6%; and River North–3.6%.

The 371,860-sf office building at 550 W. Washington St., a Fifield Realty project, was the first new construction completion of the year to be delivered during third quarter 2000.

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