The West Loop, driven by several large leases in Class A buildings, was once again the top-performing submarket in the CBD. Each building class experienced positive absorption during the first quarter suggesting that the submarket is in recovery mode.
Large lease transactions resulting in increased demand include PNC Bank’s renewal and expansion at 1 North Franklin. The bank will increase its occupancy from 80,000 to 116,000 square feet over the next two years as the building will be renamed PNC Centre. University HealthSystem Consortium signed a 12-year lease at 155 North Wacker and will occupy 77,000 square feet next quarter as it vacates its former building in suburban Oak Brook. Humana Health Insurance of Chicago leased 28,000 square feet and expanded onto an additional floor at 550 West Adams. Tressler LLP renewed and expanded its requirement by 10 percent to 83,000 square feet at Willis Tower.
After an active 2010, investment activity quieted down as no buildings were purchased or placed under contract. However, 200 South Wacker and 200 West Jackson are now actively being marketed for sale. It is expected that more owners will test the market throughout the year.
The West Loop’s borders are defined as the Chicago River (North), I-94/I-90 (West), Wells Street (East), and Van Buren Street (South).
For our complete outlook on the Chicago Office market, please reference the MB Real Estate 1st Quarter 2011 Chicago Market Overview and Submarket Snapshots.
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