Posts Tagged ‘class A office building’

Downtown Chicago Office Market Showing Signs of Life

Tuesday, October 12th, 2010

Downtown Chicago Class A office vacancies now just 14.2 percent. Chicago’s downtown office market started its long-awaited recovery in the 3rd quarter, with a slight decline in the vacancy rate reported following seven consecutive quarters of decline.  According to statistics provided by CB Richard Ellis, the vacancy rate fell to 17 percent from 17.3 percent across all property types.  Class A space has the lowest direct vacancy rate at 14.2 percent, and totals 6,900,000 SF.  Class B vacancies total 15.9 percent, or 8,900,000 SF.  Class C space reports a 15.3 percent vacancy rate, or 3,500,000 SF.

This is cautious but good news for building owners.  “Armageddon has passed us,” said John Dempsey, a senior vice president with CB Richard Ellis.  “We’re not happy about how things are today, but we’re looking down the road and seeing things are getting better.”  He noted that electronic trading firms are currently dominating the market, with companies looking at upper tier Class A office buildings.  During the 3rd quarter, demand – measured by net absorption – was positive for the first time since the end of 2009.  A couple of significant deals completed during the 3rd quarter helped the market, such as the Getco LLC lease to double its space in the former Apparel Center at 350 North Orleans Street.

Whatcha Talkin ‘Bout? Willis?

Tuesday, March 17th, 2009

One of Chicago’s most visited real estate icons — and the Western Hemisphere’s tallest building — is getting a new name.  And Chicagoans are not thrilled.gary_coleman1

Under the terms of a significant lease signed by global insurance broker Willis Group Holdings, Ltd., the 110-story, 1,450-foot-tall Sears Tower will change its name to the Willis Tower.

The London-based insurance giant plans to move nearly 500 Chicago-based associates into the trophy building, initially occupying more than 140,000 SF on multiple floors.  Located at 233 South Wacker Drive, the 3.8 million SF Willis Tower was designed by Chicago architects Skidmore, Owings & Merrill.  The Sears Tower has not occupied the building, which was completed in 1973, since its move to Hoffman Estates in 1992.

sears-tower-exterior3At $14.50 PSF, the lease provides a glimpse of how the recession has negatively impacted office rents.  Net rents for existing Class A West Loop space have dropped to about $21 PSF from $25 PSF a year ago.  Sears – uh, Willis — Tower rents tend to be lower because some potential users fear its September 11 factor.  The building’s owner is 233 S. Wacker LLC.  U.S. Equities Asset Management, LLC, provides leasing and management services.

According to an unscientific poll in the Chicago Tribune, 95.7 percent of respondents say they will always call the building the Sears Tower.  Just 4.3 percent plan to use the new name.  Sears may have moved to Hoffman Estates years ago, but it’s still a hometown company.