Northwest Submarket: Will large deals spur a recovery?

The direct vacancy rate of the Northwest submarket stands at 24 percent, higher than its peers and the Overall Suburban market which is 20.6 percent. Yet while the others experienced negative demand in the first quarter of 2010, the vacancy decreased from 24.2 percent at the end of the year. Since 2005, the direct vacancy rate in the Northwest submarket has been markedly higher than the Overall Suburban market.

Last quarter the Northwest submarket was home to the three largest lease transactions of all the Suburban submarkets. These deals included:
• Career Education Corporation leasing 317,200 sf at 231 N. Martingale Rd in Schaumburg
• The Federal Deposit Insurance Company (FDIC) leasing 150,120 sf at 200 N. Martingale Rd in Schaumburg
• APP Pharmaceuticals renewing and increasing their space to 85,209 sf at 1501 E. Woodfield Rd in Schaumburg

Yet there are reasons to be cautious with optimism. These leases are not expected to generate new long term demand for the Northwest submarket. MB Real Estate’s new companion piece to our Chicago Market Overview is our Chicago Submarket Snapshots, which provides in-depth data and commentary on trends in every submarket. Inside you will find our analysis of the long-term outlook for the Northwest submarket.

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