After experiencing positive absorption at the end of 2010, the East Loop witnessed its direct vacancy rate increase by 0.6 percent. The reversal in the submarket’s recovery was largely due to lease expirations at 200 East Randolph. Currently, 20.8 percent of office space in the East Loop is vacant: the largest percentage of the CBD’s submarkets.
Despite a negative quarter, the East Loop was home to the largest lease transaction in the CBD. Groupon expanded by 150,074 square feet by signing a short-term lease at 303 East Wacker. Evraz North America leased 34,000 square feet at 200 East Randolph as it relocates its headquarters from Portland, OR. Additionally, Robert Morris College will expand by 34,000 square feet at 401 South State.
On the other hand, several tenants decided to reduce their footprint in the submarket. GolinHarris will vacate 66,000 square feet when it joins fellow Interpublic Group firm Weber Shandwick at 875 North Michigan. Crain Communications will cut its space requirement by more than 22,000 square feet when it vacates its long-time headquarters at 360 North Michigan and relocates to 150 South Michigan.
The East Loop has 10 blocks of contiguous, direct space greater than 100,000 square feet available, including the largest contiguous space in the CBD: a 415,000 square foot block at 200 East Randolph. The building also has a 296,000 square foot sublease block that will become direct space in January 2012 when Kirkland & Ellis’ lease expires. 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 the highest vacancy rate of the CBD’s submarkets.
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 our complete outlook on the Chicago Office market, please reference the MB Real Estate 1st Quarter 2011 Chicago Market Overview and Submarket Snapshots.
Tuesday, April 26, 2011
Wednesday, April 20, 2011
MB Real Estate Represents Greer Burns & Crain in Lease Renewal
MB Real Estate’s Corporate Services & Tenant Advisory group represented Greer Burns & Crain in a 15,300 square foot lease renewal at 300 South Wacker in Chicago. The law firm, which specializes in intellectual property legal services, was able to renew its lease three years prior to its expiration. The firm, which occupies the entire 25th floor, has been a tenant in the building since 2000.
“Our client took a serious look at the marketplace, but in the end ownership was aggressive and kept a good tenant from leaving their building,” said Boris Yelyashov, Vice President of MB Real Estate’s Corporate Services & Tenant Advisory group, who along with Executive Vice President and Managing Director Andrew Davidson represented Greer Burns & Crain.
Melissa Rubenstein and Brian Atkinson, both Vice Presidents for Jones Lang LaSalle, represented the building’s owner Harbor Group International.
Wednesday, April 13, 2011
MB Real Estate Releases 1st Quarter Chicago Market Overview & Submarket Snapshots
MB Real Estate is releasing our 1st 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 Markets.
Demand in the CBD was slightly negative but essentially flat during the quarter as several large transactions continue to support a market impacted by job losses. Suburban Chicago resumed its solid decline, lacking growth drivers. Although economic headlines are positive, Chicago’s office markets are still working through the recessionary job losses.
In addition to the Chicago Market Overview, please reference our in-depth 1st Quarter 2011 Submarket Snapshots, which include highlights and analysis of each of the Chicago submarkets that MB Real Estate tracks.
Thursday, April 7, 2011
HDI-Gerling America Expands, Relocates To 161 North Clark
MB Real Estate represents U.S. division of German insurance company in 18,000 SF lease.
CHICAGO, APRIL 7, 2011—MB Real Estate’s Corporate Services & Tenant Advisory group represented HDI-Gerling America Insurance Co. in an 18,000 square foot lease at 161 North Clark Street in Chicago. The commercial property and casualty insurance company, a wholly owned unit of German insurance company HDI-Gerling, will be expanding from its current 12,000 square foot offices at 150 North Wacker Drive in Chicago to the 48th floor at 161 North Clark this summer.
HDI-Gerling America took advantage of favorable market conditions to upgrade its office space and consolidate its operations onto a single floor.
“This move not only allows HDI-Gerling [America] to consolidate its growing business onto a single floor at 161 North Clark, but also gives them the flexibility and ability to expand in the future,” said MB Real Estate associate David Kimball who, along with senior vice president Jay Beadle, represented HDI-Gerling America.
Jonathan Cordell of Tishman Speyer represented the building owner.
Friday, March 25, 2011
MB Real Estate Secures Sublease For New York Legal Assistance Group
NON‐PROFIT LAW FIRM TO RELOCATE HEADQUARTERS TO 7 HANOVER SQUARE IN NEW YORK CITY.
NEW YORK, MARCH 18, 2011—MB Real Estate’s Corporate Services/Tenant Advisory group represented New York Legal Assistance Group (NYLAG) in a 36,250 square foot sublease at 7 Hanover Square in New York City. The nonprofit law firm plans to relocate its headquarters from 450 West 33rd Street to the 850,000 square foot downtown office building this summer.
“Attractive economics and full‐floor identity, combined with building amenities and the ability to create an efficient layout provided an excellent opportunity for NYLAG to expand and relocate its headquarters,” said MB Real Estate Executive Vice President/Managing Director Gere Ricker, who represented NYLAG in the transaction.
Joseph Harkins and Barry Lewen of Grubb & Ellis represented the sub‐landlord.
MB Real Estate’s Project Services group, led by Michael Benedetti, will also provide NYLAG with construction advisory services during the on‐going construction phase to prepare the space for occupancy.
NEW YORK, MARCH 18, 2011—MB Real Estate’s Corporate Services/Tenant Advisory group represented New York Legal Assistance Group (NYLAG) in a 36,250 square foot sublease at 7 Hanover Square in New York City. The nonprofit law firm plans to relocate its headquarters from 450 West 33rd Street to the 850,000 square foot downtown office building this summer.
“Attractive economics and full‐floor identity, combined with building amenities and the ability to create an efficient layout provided an excellent opportunity for NYLAG to expand and relocate its headquarters,” said MB Real Estate Executive Vice President/Managing Director Gere Ricker, who represented NYLAG in the transaction.
Joseph Harkins and Barry Lewen of Grubb & Ellis represented the sub‐landlord.
MB Real Estate’s Project Services group, led by Michael Benedetti, will also provide NYLAG with construction advisory services during the on‐going construction phase to prepare the space for occupancy.
Friday, March 18, 2011
MBRE Market Beat - March 2011
Friday, March 4, 2011
O'Hare Submarket: Vacancy rate improved since 2009, but still highest in Suburban Chicago
For the third straight quarter, O’Hare experienced positive absorption, signaling that the submarket may have reached bottom. However, the direct vacancy rate is still the highest in Suburban Chicago. But without significant job growth, vacancies are expected to remain at elevated levels.
O’Hare was home to two of the largest investment sales of the fourth quarter. The 631,445 square foot Triangle Plaza complex at 8750 and 8770 West Bryn Mawr in Chicago was purchased by CommonWealth REIT for $96.25 million. The Class A complex, which traded for $152 per square foot, was approximately 90 percent leased at the purchase date.
The other large sale in O’Hare occurred when Colony Capital purchased 5100 North River Road in Schiller Park from RREEF for $17.4 million, or $125 per square foot. The sale price for the fully leased building was roughly 27 percent less than what RREEF paid in 2007.
Complementing the 15 available direct large blocks (contiguous space of 50,000 square feet or greater) was the addition of an 118,666 square foot sublease block at 5450 North Cumberland Avenue in Chicago. The sublandlord, Océ-USA Holding, has an existing lease which runs through February 2020. The current supply of large blocks gives tenants considerable options and pressures landlords to lower rental rates and increase concessions to lure new tenants.
The O’Hare submarket is located in northwestern Cook County, with major cities including northwestern Chicago, Elk Grove Village, and Rosemont.
For our complete outlook on the Chicago Office market, please reference the MB Real Estate 4th Quarter 2010 Chicago Market Overview and Submarket Snapshots.
O’Hare was home to two of the largest investment sales of the fourth quarter. The 631,445 square foot Triangle Plaza complex at 8750 and 8770 West Bryn Mawr in Chicago was purchased by CommonWealth REIT for $96.25 million. The Class A complex, which traded for $152 per square foot, was approximately 90 percent leased at the purchase date.
The other large sale in O’Hare occurred when Colony Capital purchased 5100 North River Road in Schiller Park from RREEF for $17.4 million, or $125 per square foot. The sale price for the fully leased building was roughly 27 percent less than what RREEF paid in 2007.
Complementing the 15 available direct large blocks (contiguous space of 50,000 square feet or greater) was the addition of an 118,666 square foot sublease block at 5450 North Cumberland Avenue in Chicago. The sublandlord, Océ-USA Holding, has an existing lease which runs through February 2020. The current supply of large blocks gives tenants considerable options and pressures landlords to lower rental rates and increase concessions to lure new tenants.
The O’Hare submarket is located in northwestern Cook County, with major cities including northwestern Chicago, Elk Grove Village, and Rosemont.
For our complete outlook on the Chicago Office market, please reference the MB Real Estate 4th Quarter 2010 Chicago Market Overview and Submarket Snapshots.
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