X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CHICAGO-In announcing Insignia/ESG midyear figures for the Downtown Chicago office market Michael Klein, EVP of the Midwest, “We continue to see the effects of the economic slowdown on the commercial real estate markets.”

Midyear figures show the third consecutive quarter of negative net absorption, -675,000 sf, and an overall availability rate of 14.6%, up from 13.9% at first quarter 2001 and 13.9% at midyear 2000. Insignia defines available space as that which is actively marketed and ready for occupancy within 12 months.

Given that the commercial real estate markets typically follow the economy, the last time quarterly statistics yielded positive absorption (1.7 million sf) was third quarter 2000, the same quarter that the availability rate and available sublease space each reached two year lows (13% and two million sf, respectively).

“It’s no coincidence,” says Klein. “The economy began to slow down third quarter 2000–the effects are apparent.” Despite the increase in availability, average asking gross rental rates have remained relatively stable at $29.65, although according to Klein, some owners are beginning to offer increased concession packages.

“We are seeing additional tenant improvement allowances, and, on some occasions, rental abatement,” Klein notes. Sublease space continues to rise as recent corporate layoffs have resulted in a decline in demand for space. Midyear figures show 3.9 million sf of sublease space available, up from 3.3 million sf at the end of first quarter 2001 and 2.3 million sf at year-end 2000.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.