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CHICAGO-Count Indianapolis-based Duke Realty Corp. among those not ready to give up on the local suburban office market. Instead, the office and industrial REIT has the market high on its priority list for acquisitions, even if it involves acquiring a suburban property with a vacancy hole, within reason.

“We’d be hard-pressed to buy a vacant building in the East-West Corridor right now,” says co-chief operating officer Dennis Oklak, referring to the once tech-heavy submarket. US Equities Realty pegs the third-quarter vacancy rate there at 18.1%, but with 1.98 million sf of sublease space on the market, more than 25% of the office inventory is available.

However, Duke Realty officials conceded Tuesday in an investor forum for analysts and institutional investors that they have acquired 850,000 sf this year for $37 million, but hope to hit $100 million in a flurry of end-of-the-year deals. Next year, the target is $100 million to $200 million, Oklak says.

Keeping an eye on potential Chicago area acquisitions is part of the REIT’s reallocation strategy, Duke Realty officials indicate. Focusing on the Midwest and Southeast regions of the US, more than half of Duke Realty’s portfolio is concentrated in five of its 15 markets:Atlanta, Cincinnati, Indianapolis, St. Louis and Minneapolis. They suggest the portfolio is overweight with industrial holdings in Atlanta, Indianapolis and Minneapolis.

Only 5.9% Duke Realty’s holdings are in the Chicago market. Among those assets here are Executive Towers, a 651,307-sf property spread over three buildings in the 1400 block of Opus Dr. in Downers Grove. However, nearly 38% of the space there is available. Another DuPage County asset is Central Park of Lisle, a 648,446-sf, two-building property along the East-West Tollway. Vacancy at the property is an enviable 7.1%.

Duke Realty officials, though, are hardly alone in searching for assets, especially those that make sense in a market that sees lofty prices in spite of high vacancies.

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