MB Real Estate Blog

MB Real Estate Releases 4th Quarter 2011 Chicago Market Overview

2012-01-17T13:24:00.001-06:00

MB Real Estate has released our 4th Quarter 2011 Chicago Market Overview, a quarterly report that tracks trends, analyzes data, and provides you with our forecast for the Chicago CBD and Suburban office markets.

Despite sluggish job growth, the CBD experienced over 456,000 square feet of positive absorption during the quarter. Demand was bolstered by tenants taking advantage of attractive lease terms earlier in the year and are now occupying new space. However, previous employment losses have yet to fully materialize and may still work their way through the market.

Suburban Chicago experienced slight positive absorption in Class A buildings with relatively no net change in Class B and C. Vacancy rates continue to hover near historically high levels. The market continues to lack the demand drivers that the CBD has benefitted from and a glut of direct and sublease space is expected to remain.

In addition to the Chicago Market Overview, please reference our in-depth 4th Quarter 2011 Submarket Snapshots, which include highlights and analysis of each of the Chicago submarkets that MB Real Estate tracks.

3Q 2011 East Loop Snapshot: Robust Leasing Activity Continues, But Occupancy Remains Unchanged

2011-12-06T13:44:00.000-06:00

After a strong second quarter, the East Loop experienced little net change in occupancy. Several tenants within the East Loop have leveraged soft market conditions to upgrade to Class A buildings. However, such tenants are from Class B or C buildings within the East Loop and do not generate new demand for the overall submarket.

The most notable example is energy company Integrys, who will vacate 196,000 square feet at 130 East Randolph and consolidate operations into 150,000 square feet at the Class A, 200 East Randolph. While this move strengthens the Class A segment, the vacancy rate for Class B buildings will rise, and another large block will hit the market. However, Class B will see some relief when OWP&P Cannon Design occupies 61,000 square feet at 205|225 North Michigan Avenue, as it relocates from 111 West Washington in the Central Loop.

CommonWealth REIT, who entered the East Loop by purchasing 233 North Michigan last quarter, has agreed to purchase 111 East Wacker for $151 million. The new owners face with the challenge of leasing 200,000 square feet that will become available next year.

The East Loop continues to have an uphill battle in gaining occupancy levels that match its competitive submarkets. Of the nine available, contiguous blocks greater than 100,000 square feet, five represent space that will be vacated in 2012, totaling nearly 1 million square feet. Also, short-term leases for Groupon and Obama for America are set to expire next year. Considering large block availability across the CBD and speculation regarding a new office development, it remains likely that the East Loop will continue to have a higher vacancy rate compared to the rest of the CBD.

The East Loop is bordered by the Chicago River (North), State Street (West), Lake Shore Drive (East), and Van Buren Street (South). It is inhabited mostly by advertising and media firms and corporate tenants.

For more information regarding the Chicago office market, please reference MB Real Estate's 3rd Quarter 2011 Chicago Market Overview and Submarket Snapshots.

Exploring the Chicago CBD’s Solid Performance Amid Stagnant Job Creation

2011-11-16T12:16:00.000-06:00

Employment drives demand for office space. Since the recession of 2008-2009 ended, total employments has grown at a slow pace, both locally and nationally. Office demand traditionally lags the labor force by one to two years, suggesting that occupancy should be falling, causing vacancy rates to rise. However, total vacancy, (sublease space included), has declined since the fourth quarter of 2010. So why hasn’t vacancy acted intuitively given the current employment climate?

Chicago-area total employment for professional and business services, the labor category most closely aligned with office use, peaked during the fourth quarter of 2007 before falling 14.9 percent compared with the first quarter of 2010. Total office occupancy in Chicago’s CBD peaked during the third quarter of 2007, but only fell 1.3 percent before bottoming out the third quarter of 2010. Occupancy declined at a less severe rate than employment because firms cannot shed space instantaneously with job cuts. The graph below shows that occupancy is highly correlated with employment changes but lags one to two years. Professional and business services employment began a three year climb beginning in the first quarter of 2004 while occupancy did not sustain an increase until the fourth quarter of 2005. Thus, the recent uptick in occupancy can be attributed to the increase in jobs sustained from the very beginning of the recovery.

Large Tenants Grow their Downtown Presence

A select group of companies have bolstered the CBD market by establishing their headquarters in downtown Chicago. Since committing to move its global headquarters from Elk Grove Village during the heart of the recession, United Airlines has leased a total of 650,000 square feet at Willis Tower—roughly 0.5% of the CBD’s total office inventory. Groupon, which was established in November 2008, currently leases and subleases a combined 536,000 square feet throughout the CBD. While its 196,000 square foot lease at 303 East Wacker expires next year, the deal-of-the-day website has supported the River North and East Loop submarkets. Last year, BP began to occupy 225,000 square feet at the CME Center, relocating from the Western Suburbs, resulting in all new demand for the CBD. As many companies have cut their space requirements, the aforementioned have provided significant new demand to help occupancy.

Lack of New Inventory

The addition of a new building, if not predominantly pre-leased, can adversely affect vacancy rates by adding new competitive stock to the market. Fortunately for existing landlords, there have been no new deliveries since 2009 besides a 933,170 square foot vertical expansion at 300 East Randolph, which is currently 94 percent leased. No new developments are under construction in the CBD. Eight sites, all located in the West Loop submarket, have been actively marketed in the past 12 months. The proposed developments range from 350,000 to 1.1 million square feet and will need to be at least 60% preleased in order to break ground. Even if the smallest of these developments obtains financing, it is unlikely that any new inventory will be delivered until at least 2013.

Chicago-Based Firms Show Increased Confidence

Total vacancy has declined this year due to companies reducing the amount of available sublease space. At the end of the third quarter, 381,000 square feet has been either subleased or removed from the market year-to-date. Available sublease space has declined by more than1 million square feet since peaking at the end of 2009. Since sublease space is often leased at reduced rental rates as tenants are content to recuperate even a portion of their costs, landlords benefit from a reduction in overhang.

Several large users, some of whom delayed real estate decision-making, have made commitments to stay in the CBD. Wells Fargo is consolidating multiple locations throughout downtown, but slightly increasing its total footprint with a long-term lease for 293,000 square feet at 10 and 30 South Wacker. Across the street, PricewaterhouseCoopers signed a 15-year renewal to remain in 279,000 square feet at 1 North Wacker. Fifth Third Bank extended its lease until 2024 and will expand by 38,000 square feet at 222 South Riverside to occupy a total of 218,000 square feet. While some firms have threatened to exit Chicago, the aforementioned have solidified their presence in the city and stabilized occupancy in their respective buildings.

Outlook

Despite declining vacancy numbers year-to-date, many uncertainties exist on whether vacancy will continue to fall in the CBD. On one hand, several firms have committed to expanding their workforce. GE Capital, Ernst & Young, and Seaton Corp have announced plans to add 1,000, 500, and 400 jobs, respectively, to their downtown offices. Google, which currently leases 130,000 square feet, is currently searching the market for up to 350,000 square feet. However, sluggish job growth will continue to work against demand for office space. Shadow vacancy, which refers to underutilized space that companies lease but are likely to shed at lease expiration, is difficult to quantify, though is expected to have a significant impact on occupancy since several firms are expected to reduce their space upon lease expiration. Combined with a bleak economic outlook, MB Real Estate forecasts slight occupancy losses through 2012. For full details on MBRE’s outlook, please reference the Third Quarter 2011 Chicago Market Overview at www.mbres.com.

3Q 2011 Central Loop Snapshot - Class B Buildings Drive Occupancy Increase

2011-11-03T16:22:00.000-05:00

While the Central Loop’s Class A segment continues to have a direct vacancy rate under 10 percent, its Class B market has been struggling. However, Class B buildings improved with 177,000 square feet of additional occupancy during the third quarter. The demand increase translated into the Central Loop’s strongest performance since early 2009.

Large lease transactions were highlighted by Accretive Health’s 28,000 square foot expansion at 231 South LaSalle, and The Administrative Office of the Illinois Court’s renewal at 222 North LaSalle. McCorkle Court Reporters extended and expanded at 180 North LaSalle.

With respect to investment sales, one major transaction closed and two other buildings were placed under contract. A joint venture led by GAW Capital Partners and the Korea Teachers Credit Union purchased 70 West Madison for $349 million, or $243 per square foot, from Hines Real Estate Investment Trust. In addition, an unidentified buyer is under contract to purchase the 440,000 square office portion of 22 West Washington for $187 million. Chicago-based Hearn Co. agreed to purchase 55 West Monroe from LaSalle Investment Management for $140 million.

The Central Loop, which has historically been home to financial organizations and law firms, will see uneven demand in office space for the near-term. However, constrained supply and convenient location will keep the Central Loop’s vacancy rate below most of the CBD’s submarkets.

The Central Loop’s boundaries are the Chicago River (North), Wells Street (West), State Street (East), and Van Buren Street (South).

For more information regarding the Chicago office market, please reference MB Real Estate's 3rd Quarter 2011 Chicago Market Overview and Submarket Snapshots.

MB Real Estate Appoints New Chief Administrative Officer

2011-10-13T13:51:00.000-05:00

MB Real Estate is pleased to announce the appointment of Patricia Aluisi as its new Chief Administrative Officer & Senior Vice President of Support Services. She will play a multi-faceted role and manage the firm’s marketing, human resources and information technology departments.

“I am delighted to be a part of a company where the highest professional standards and client focus are the cornerstones of its business,” said Aluisi. “The way we cultivate enduring relationships with each of our clients is the same way we create productive and cohesive relationships within our company. That synergy is key to the success of MB Real Estate, and most importantly, our clients.”

Prior to MB Real Estate, Aluisi served as the General Counsel and Director of Corporate Administration for London-based Bovis International. She negotiated numerous construction/project management projects in more than 20 countries, establishing business entities and serving as an executive or board member. Her projects included the Petronas Towers and Kuala Lumpur City Center in Malaysia; Euro Disneyland; Canary Wharf; The Jewel House at the Tower of London; and the Merck headquarters in Germany.

She was appointed to the Bovis LTD board as Commercial Director to lead the firm’s development of infrastructure projects, such as privately financed water treatment plants in China and Malaysia and National Health Service Hospitals in the United Kingdom. After returning to the United States, she co-founded business advisory firm Qorval, LLC, as well as served as a consultant with construction management firm Brennan Group, specializing in creative solutions in the criminal justice sector. Aluisi is a founding trustee and actively involved in the Naples Winter Wine Festival, recognized as the most successful charity wine auction by Wine Spectator.

Earlier in her career in Baltimore, Aluisi managed Administrative Services at USF&G Insurance, where she was a commercial real estate broker, and was also a partner in a private law practice. She earned a Bachelor of Arts degree, magna cum laude, as well as her Juris Doctor, from University of Maryland.

MB Real Estate 3rd Quarter 2011 Chicago Market Overview

2011-10-12T11:49:00.000-05:00

MB Real Estate has released our 3rd Quarter 2011 Chicago Market Overview, a quarterly report that tracks trends, analyzes data, and provides you with our forecast for the Chicago CBD and Suburban office markets.

Vacancy continued to decline in the CBD, albeit modestly. Business confidence, which has propelled CBD office demand ahead of the employment market, has been shaken by negative economic news and fears of another downturn. Without confidence in future growth, tenants are likely to be more conservative in their office leasing. On the other hand, companies like Motorola Mobility, Sara Lee, and Google are searching for office space and will represent new demand. In Suburban Chicago, the picture is still bleak with a further decrease in occupancy. With no consistent drivers of growth and a preference for companies to be in the CBD, Suburban Chicago will have difficulty rebounding.

In addition to the Chicago Market Overview, please reference our in-depth 3rd Quarter 2011 Submarket Snapshots, which include highlights and analysis of each of the Chicago submarkets that MB Real Estate tracks.

Chicago Office Buildings & Pink Go Hand in Hand: MB Real Estate to use pink hand towels in its properties to support national cancer awareness month

2011-10-04T10:51:00.000-05:00

CHICAGO, OCTOBER 3, 2011—MB Real Estate is helping to spread breast cancer awareness in Chicago one hand at a time. Throughout the month of October, the Chicago-based commercial real estate firm will have pink hand towels in every restroom at several of its downtown office properties in support of National Breast Cancer Awareness Month. MB Real Estate has teamed up with Think Pink Paper to make a donation for each case of pink hand towels ordered with proceeds going to organizations such as Susan G. Komen for the Cure and The American Cancer Society.

Between the participating eight buildings, this campaign is expected to reach more than 12,500 people each day. The MB Real Estate-managed properties that are participating include Citigroup Center/Ogilvie Transportation Center (500 West Madison); Michigan Plaza (205/225 North Michigan); 200/230 West Monroe; The LaSalle Wacker (221 North LaSalle); 55 West Wacker and 205 West Wacker.

“It’s our unique way of showing our support for the millions of breast cancer survivors in the country, as well as sharing the memories of those who lost their battle with this insidious disease,” said Kevin Purcell, Executive Vice President and Managing Director of Asset Management for MB Real Estate.

According to the American Cancer Society, in 2011, more than 230,000 women have been diagnosed with invasive breast cancer and nearly 40,000 have died from this disease. Currently, there are more than 2.5 million breast cancer survivors in the United States.

The pink hand towels are just one of many initiatives that MB Real Estate has implemented to support National Breast Cancer Awareness Month. The company’s employees have been donating $5 for Lee National Denim Day on Friday, October 7, 2011 to be able to wear jeans to work to show solidarity in support of breast cancer awareness. Since 2004, MB Real Estate has been one of many companies across the country that has helped raise millions of dollars for the Women’s Cancer Programs of the Entertainment Industry Foundation.

MB Real Estate manages more than 12.5 million square feet of property in the Chicago area, including Millennium Park, The Richard J. Daley Center and 181 West Madison. The company was recently selected as the property manager for the new 440,000 square foot North American headquarters in Glenview, Illinois for Japanese pharmaceutical giant Astellas.

Vacancy Increases in Chicago's Newest Buildings

2011-09-27T10:25:00.000-05:00

MB Real Estate has released the September 2011 Market Beat: MBRE Index Update. The MB Real Estate (MBRE) Index is comprised of the last 30 Class A office buildings greater than 300,000 square feet built in Chicago’s Central Business District (CBD). This set of buildings, which contains some of the CBD’s most desirable space, serves as a leading indicator of office market conditions.

For the first time in six quarters, the direct vacancy rate in the CBD's newest buildings increased. Conversely, the overall market saw vacancies decrease. Click the image below to read the full report and find out what this means for our outlook of the overall market.

MB Real Estate completes Phase I of Coyote Logistics’ corporate HQ in Chicago

2011-09-15T16:22:00.002-05:00

MB Real Estate has completed Phase I of Coyote Logistics' corporate headquarters at The Green Exchange in Chicago, IL. Please click here to learn more.

Cleaner Cities Story - Chicago

2011-09-14T08:31:00.000-05:00

The retrofit of the Richard J. Daley Center will reduce the building's CO2 emissions by more than 2,500 metric tons annually and save $9 million over a 15-year period. Check out the YouTube video from the Clinton Foundation’s CCI Cities Program to learn more.

Illinois Back Institute Selects Arlington Heights For New Branch

2011-08-29T16:37:00.002-05:00

MB Real Estate’s Corporate Services & Tenant Advisory group represented Illinois Back Institute (www.illinoisbackpain.com) in a 5,240 square foot lease for its new branch location at the Enterprise Office Center located at 3115 N. Wilke Road in Arlington Heights, Ill. This marked the opening of the healthcare provider’s fifth branch location within the Chicago area.

Kyle Robbins, Assistant Vice President of MB Real Estate’s Corporate Services & Tenant Advisory group, represented Illinois Back Institute in the lease transaction.

“Several challenging criteria needed to be met in our search for our client’s new suburban location,” said Robbins. “In addition to first-floor space with medical-use capacity, ample parking and signage, we wanted a building that offered a lease with the option to purchase within the first three years. The Enterprise Office Center offered an ideal combination of our client’s desired elements.”

Illinois Back Institute focuses on non-surgical, natural treatment for chronic back and neck pain. Their treatment is the first to reverse disc degeneration and provide a healthier back.

Brian Lunt of Hamilton Partners represented the landlord of the single-story, 22,106 square foot office building.

Activity picks up through first two quarters at 55 West Wacker, 205 West Wacker & The LaSalle Wacker.

2011-08-24T11:02:00.000-05:00

Through the first two quarters of 2011, MB Real Estate has secured 75,444 square feet of lease transactions at its three-building portfolio along Wacker Drive in Chicago. The portfolio, which consists of 55 West Wacker, 205 West Wacker and The LaSalle Wacker (221 North LaSalle), totals more than 880,000 square feet and is owned by a group of private investors.

The following are some of the recent transactions:

Health and wellness care provider Reflections of Health, represented by Scott Gordon of Business Locations, Inc., signed a new lease at 55 West Wacker.

Professional open-source company Liferay, Inc., represented by Lynn Scharaga of Coldwell Banker Commercial, signed a new lease at 205 West Wacker.

Global information technology consulting firm Olenick & Associates, represented by Bill Sheehy of Jones Lang LaSalle, completed a lease renewal and expansion at 205 West Wacker.

Online media company CityGrid Media, LLC, represented by Kyle Kamin of CB Richard Ellis, renewed its lease at 205 West Wacker.

Law firm Walinski & Associates, P.C., represented by Konstantine T. Sepsis of MB Real Estate, signed a new lease at The LaSalle Wacker.

Digital media firm Undertone, represented by John Marquardt of Transwestern, signed a new lease at The LaSalle Wacker.

Information technology solutions provider Amadeus North America, represented by Bruce Schuman of Studley, renewed its lease at The LaSalle Wacker.

Law firm Crowley Lamb, represented by Steven Goldstein of ChicagoBroker, signed a new lease at The LaSalle Wacker.

All three buildings offer excellent views of the Chicago River and valuable amenities, as well as close proximity to public transportation, Financial District, Daley Center and City Hall.

For more information about lease opportunities at 55 West Wacker, 205 West Wacker and The LaSalle Wacker, please contact Ben Cleveland at 312.960.1570 or bcleveland@mbres.com or Anne Knopke at 312.281.1729 or aknopke@mbres.com.

MB Real Estate Represents Lake Toback in 8.660 SF Lease Renewal

2011-08-22T14:26:00.002-05:00

MB Real Estate’s Corporate Services & Tenant Advisory group represented Lake Toback in a 8,660 square foot lease renewal at 33 North Dearborn in Chicago. Andrew Davidson, Executive Vice President and Managing Director of MB Real Estate’s Corporate Services & Tenant Advisory group, represented divorce and family law firm.

“We were able to renegotiate our client’s lease two years prior to its expiration, allowing the building to retain one of its major tenants,” said Davidson.

Nikki Kern of Jones Lang LaSalle represented the landlord of the 25-story, 336,000 square foot office building.

East-West Submarket Snapshot: Demand remains flat in the suburbs' largest submarket

2011-08-17T15:26:00.000-05:00

The East-West Corridor experienced modest absorption as its direct vacancy rate currently sits at 22.2 percent. Occupancy levels are rebounding slightly but are still near the record lows reached in 2003.

Sickich signed the largest new lease in the suburban market during the second quarter. The accounting firm will occupy 80,000 square feet at 1415 West Diehl Road in Naperville and will vacate approximately 40,000 square feet at 998 Corporate Boulevard in Aurora. SHC Direct is also relocating and expanding its space at 1815 South Meyers Road in Oakbrook Terrace. The Healthcare Financial Management Association renewed its lease of 23,000 square feet at 2 Westbrook Corporate Center in Westchester.

Investment sales activity was highlighted by RR Donnelly and Sons purchase of 4101 Winfield Road in Warrenville. The publishing and communications company purchased the 167,000 square foot building from M&J Wilkow for $14.7 million. The owners of 1333 Burr Ridge Parkway are marketing the Class A, 151,000 square foot building for sale. The property is 87 percent leased and is expected to attract bids upward of $200 per square foot.

MB Real Estate expects vacancy to increase slightly over the next few quarters. Job growth has not reached the levels necessary to sustain significant absorption as companies reevaluate their space requirements and consider alternative locations.

The East-West submarket encompasses Cook, DuPage, Kane, Kendall, and Will Counties, with major cities including Downers Grove, Lisle, Naperville, and Oak Brook.

For more information regarding the Chicago office market, please reference MB Real Estate's 2nd Quarter 2011 Chicago Market Overview and Submarket Snapshots.

Office Lease Fundamentals: A Comparison in Recessionary Behavior

2011-08-12T12:15:00.001-05:00

Please click the image below to read the August 2011 Market Beat - a monthly report created by MB Real Estate. This month, we compare and contrast how the two recessions of the 2000s affected office lease fundamentals in Chicago’s CBD. What can we learn from the past and why is the most recent recession different?

MB Real Estate Represents Katz, Friedman, Eagle, Eisenstein, Johnson & Bareck, P.C. in Lease Renewal

2011-08-04T12:54:00.002-05:00

MB Real Estate’s Corporate Services & Tenant Advisory group represented Katz, Friedman, Eagle, Eisenstein, Johnson & Bareck, P.C. in a 10,839 square foot lease renewal of its headquarters at the Chicago Temple Building at 77 West Washington in Chicago. The law firm, which specializes in workers’ compensation and personal injury legal services, has been in business for more than 50 years.

MB Real Estate’s Senior Vice President Michael Hull represented Katz, Friedman, Eagle, Eisenstein, Johnson & Bareck, P.C. in the 10-year lease renewal, which commences on January 1, 2013.

Allison Olszta of CB Richard Ellis represented the building’s landlord in the transaction.

West Loop 2Q 2011 Snapshot: Tenants continue their "flight to quality"; Willis Tower hits the block

2011-07-28T14:34:00.000-05:00

The West Loop continues to recover as the CBD’s largest submarket saw 213,000 square feet of positive absorption, dropping its direct vacancy rate to 14.8 percent. Leading the recovery are Class A buildings, which continue to be the most active and highest demanded assets in the CBD.

During the second quarter, Wells Fargo signed the largest lease year-to-date: a 17-year, 293,000 square foot lease at the Chicago Mercantile Exchange Center at 10 and 30 South Wacker. The firm will consolidate five offices in the West Loop and expand upon its current requirement by 43,000 square feet. Marsh will relocate its offices at 500 West Monroe and cut its space requirement by 56,000 square feet as it will occupy 120,000 square feet at 540 West Madison in November.

The investment sales market continues to be robust. Billionaire investor Sam Zell made his first office purchase since 2007 as he partnered with Transwestern to acquire a 90 percent stake in 200 South Wacker for an estimated $156 per square foot. Three Wacker Drive skyscrapers hit the market during the second quarter. Most notably, the 3.8 million square foot Willis Tower (233 South Wacker) is being marketed for sale. Neighbor 311 South Wacker is also on the market. In addition, Hines is seeking a buyer to purchase up to a 50 percent stake in 1 North Wacker.

Due to the amount of leasing activity the submarket has experienced, MB Real Estate expects further positive absorption in the West Loop next quarter. Also, the investment sales market will continue to heat up as institutional investors and high-net-worth individuals bid for the some of the largest and most iconic buildings in the CBD.

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 more information regarding the Chicago office market, please reference MB Real Estate's 2nd Quarter 2011 Chicago Market Overview and Submarket Snapshots.

MB Real Estate Represents Guerrero Howe in Headquarters Relocation

2011-07-26T18:19:00.000-05:00

MB Real Estate’s Corporate Services & Tenant Advisory group represented Guerrero Howe, LLC in its relocation to 22,125 square feet at 205 North Michigan Avenue, part of the 1.9 million square foot Michigan Plaza office complex in Chicago. The business-to-business publishing company, who is relocating from 28 East Jackson, is subleasing the space from consumer product conglomerate Unilever.

“We were able to take advantage of fantastic existing conditions and office furniture in a great property,” said David Kimball, Assistant Vice President of MB Real Estate’s Corporate Services & Tenant Advisory group, who along with Senior Vice President, Jay Beadle represented Guerrero Howe.

Steven Holmberg and Ned Franke of Cushman & Wakefield represented Unilever in the transaction.

MB Real Estate 2nd Quarter 2011 Chicago Market Overview

2011-07-11T13:57:00.000-05:00

MB Real Estate has released our 2nd Quarter 2011 Chicago Market Overview, a quarterly report that tracks trends, analyzes data, and provides you with our forecast for the Chicago CBD and Suburban office markets.

For just the second quarter since the economic downturn, vacancy declined in the CBD. The increase in demand was modest however, driven by a few large lease transactions. Conversely, vacancy rates continue their climb in Suburban Chicago due to firms relocating or shedding unneeded space. Although several firms have recently announced plans to create jobs, Chicago’s office markets are still working through the recessionary job losses and an uneven recovery is expected.

In addition to the Chicago Market Overview, please reference our in-depth 2nd Quarter 2011 Submarket Snapshots, which include highlights and analysis of each of the Chicago submarkets that MB Real Estate tracks.

MB Real Estate Adds Three New Associates; Promotes David Kimball to Assistant Vice President

2011-06-28T12:48:00.000-05:00

MB Real Estate has added three associates to its Corporate Services & Tenant Advisory group. Dave Fortosis, Jordan Mellovitz and Doug Noble will focus on new business development, as well as financial analysis and market research.

“These young and energetic professionals truly complement the level of service that MB Real Estate provides all its clients,” said Andrew Davidson, Executive Vice President and Managing Director of MB Real Estate’s Corporate Services & Tenant Advisory group.

Fortosis (25), a graduate of Calvin College in Grand Rapids, Mich., came from Kimberly-Clark where he was a financial analyst. Mellovitz (22), a graduate of University of Illinois at Urbana-Champaign, was a commercial real estate banking analyst for JP Morgan Chase prior to joining MB Real Estate. Noble (26), a graduate of University of Michigan-Dearborn, most recently helped lead new business development efforts for Mid-West Manufacturing Companies.

The group also promoted David Kimball from Associate to Assistant Vice President. Kimball, who joined MB Real Estate in 2005, has recently represented such notable clients as HDI-Gerling America, University of Chicago, and Davis & Hosfield.

MB Real Estate’s Corporate Services & Tenant Advisory group continues to build on its success from the last few years with recent transactions completed on behalf of Greer Burns and Crain, HDI-Gerling America, and True Partners Consulting. This year also saw long-time client General Board of Pension & Health Benefits of the United Methodist Church move into its new 110,000 square foot headquarters in Glenview, Ill. In addition, clients Astellas and Coyote Logistics broke ground on their new headquarters this year, 440,000 square feet in Glenview and 105,000 square feet in Chicago, respectively.

June Market Beat - Direct Vacancy Rate for CBD's 30 Newest Building Falls to 9.9%.

2011-06-16T10:50:00.000-05:00

The MBRE Index, which is compiled of the 30 newest office buildings built in Chicago's CBD, continues to show positive demand for Class A buildings. The direct vacancy rate of these buildings has fallen to 9.9%. However, the direct vacancy rate for the entire CBD increased to 16.1% in the 1st Quarter. Click the image below to learn what this means for the Chicago office market.

West Loop 1Q 2011 Submarket Snapshot: The CBD's Largest Submarket Outperforms The Rest Of The Market

2011-06-02T15:30:00.000-05:00

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.