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CHICAGO-Even at 89.2%, occupancy at Sears Tower is better than the overall office market. And the tallest building in North America is Trizec Properties Inc.’s worst asset in the market, as the rest of the Chicago portfolio was 94.4% occupied in the first quarter, according to the REIT’s most recent earnings report.

Company officials say they saw the softer market coming, and attempted to get a handle on lease expirations early. As a result, the REIT has 75,000 sf of space coming up for renewal this year, with 233,000 sf next year, less than 13% of the portfolio outside of Sears Tower.

“We have relatively little leasing to do this year and next year,” says president and CEO Timothy H. Callahan.

Occupancy on the REIT’s four Central and West Loop assets ranges from 90.8% at 10 S. Riverside Plaza to 97.3% at 120 S. Riverside Plaza. Also, occupancy is 550 W. Washington Blvd. and 94.4% at 2 N. LaSalle St. However, Trizec Properties officials are not ready to get comfortable.

“New buildings are being completed,” Callahan notes. “We expect significant existing space coming back to the market in the next couple years, particularly from law firms.”

Callahan hesitates to call a turn-around to the market, but suggests it may be bottoming out.

“We don’t see major deterioration in the market,” he says. “But we don’t see any significant upswing for another two or three years.”

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