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Vacancy Creeps Up
Research & Forecast Report
SUBURBAN CHICAGO | OFFICEThird Quarter 2018
Ronna Larsen Senior Research Manager | Suburban Chicago
Suburban office vacancy increased slightly in the third quarter as leasing velocity decreased.In the Chicago suburban office market, only two new lease transactions greater than 50,000 square feet and five new lease transactions greater than 25,000 square feet were signed in third quarter of 2018. Tenants who signed leases earlier in the year are expected to move into their new space by year-end.
Trends
Investment and user sale velocity continued in the suburban office market as eight buildings sold and six are currently under contract. Top transactions of the third quarter included GlenStar/Walton Street Partners’ 837,849-square-foot sale of Continental Towers in Rolling Meadows to Rubenstein Partners, the Blackstone Group’s 699,634-square-foot sale of Executive Towers West in Downers Grove to Group RMC, Equity Commonwealth’s 651,455-square-foot sale of Triangle Plaza in Chicago to Shidler Group and the Blackstone Group’s additional 516,799-square-foot sale of O’Hare International Center in Rosemont to Bridge Investment Group.
Mid-sized tenants continue to offer the most relocation potential. There are currently 105 tenants with needs ranging from 10,000 to 50,000 square feet actively seeking space throughout the suburban office market, forty percent of whom have shown interest in the East-West market specifically.
With millennials gradually relocating to the suburbs, well-capitalized owners remain focused on improvements to attract and retain high-quality tenants.
Asking rents continue to rise throughout the suburban office market. Class A properties have seen the most significant increase, rising five percent in the past three years.
Vacancy
Leasing volume in the suburban office market decreased in the third quarter of 2018, and overall vacancy rose to 20.1 percent, up from 20.5 percent during the same time period last year.
Class A vacancy in the suburban office market also increased slightly, ending the quarter with 20.8 percent, up from 20.1 percent in the previous quarter. However, it has improved from the 21.1 percent that was reported in the third quarter of 2017. Considering high quality, “true” Class A assets, third quarter 2018 vacancy is a bit lower, ending at 17.3 percent.
The overall sublease vacancy rate decreased in the third quarter of 2018, ending at 1.2 percent, down from 1.4 percent in the second quarter.
Market IndicatorsRelative to prior periods Q3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%
Absorption (YTD) (140,060) 24,670 (331,532)
Rents $20.60 $21.03 $21.19
Inventory 111,002,004 111,036,804 111,036,804
Class A Large Blocks of Space20,000 SF+ 50,000 SF+ 100,000 SF+ 200,000 SF+ 300,000 SF+
O'Hare 14 8 6 0 0
Northwest 32 21 14 5 1
North 40 16 9 2 2
Lisle-Naperville 25 11 7 3 1
Oak Brook 22 10 2 0 0
Total 133 66 38 10 4
Unemployment(not seasonally adjusted) Q3-17 Q3-18
Chicago 5.3% 4.0%
Illinois 5.0% 4.1%
US 4.4% 3.9%
2 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
Absorption
The third quarter of 2018 ended with 356,202 square feet of negative quarterly, net absorption, compared to positive 588,204 square feet reported at the end of the second quarter.
Class A properties totaled negative 439,317 square feet. While Class B properties reported 79,874 square feet of positive net absorption.
Large Blocks of Availability
There are currently 49 properties in the suburban office market that can accommodate large (100,000 square feet and above) users, with 38 of them being in Class A assets. While there are few available large blocks of space in the O’Hare and Oak Brook markets, the Northwest market continues to offer the majority of large block options.
Rents
Class A rents continue to rise throughout the suburbs. The average Class A gross asking rent ended the quarter at $30.01 per square foot gross, compared to $29.71 in the second quarter of 2018.
The average gross asking rent for all classes in Suburban Chicago also increased, rising to $21.19 per square foot gross compared to $21.03 at the end of the second quarter.
Construction
While there hasn’t been any speculative construction delivered since 2010, and none is expected throughout 2018, build-to-suit activity continues within the suburban market. Projects include Central States Funds’ 150,000 square foot build-to-suit development at 8655 W Higgins Road in Chicago, as well as the Offices at Veridian, a 16-acre redevelopment site on the former Motorola campus that can accommodate a user up to 500,000 square feet. In addition, AT&T’s former headquarters, a 150-acre site in Hoffman Estates, is under contract with Somerset Development who is working on a mixed-use redevelopment plan for the property.
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
Net Absorption and Vacancy | Suburban Office Market
Asking Gross Rental Rates
Submarket Vacancy Rates | 2016 - 2018
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
3 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
Tenants In The Market | Active Requirements
Lake Michigan
0 1 5 10 miles
NORTH
94
94
94
94
94
9457
294
80
80
55
55
55
355
294
290
290
290
88
88
355
294
90
90
90
90
90
190
41
Elgin-O
'Hare Expy.
East-West Tollway
45
45
41
41
45
12 20
45
34
34
12
12
14
83 60
8322
68
7262
21
5953
58
20
3120
64 53
64
83
59
43
504353
53
171
7 50
Lake Cook Rd.
WAUCONDA LIBERTYVILLE
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SLEEPYHOLLOW
ELGIN
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ARLINGTONHEIGHTS
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SCHAUMBURGELK GROVE
VILLAGE
SKOKIE
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AURORA NAPERVILLE LISLE DOWNERS GROVE HINSDALE
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O'HAREINTERNATIONAL
AIRPORT
MIDWAYAIRPORT
Northwest1,252,000 SF
North405,000 SF
East-West1,962,000 SF
O’Hare891,000 SF
The velocity of small and mid-size tenants in the market remains strong in the Suburban Office Market.
There are currently over 100 tenants in the suburbs looking for space between 10,000 and 50,000 square-feet.
O’HareThe O’Hare market attracts corporate users due to convenient access to highways and public transportation as well as proximity to O’Hare International Airport. O’Hare continues to be one of the most active of all the suburban markets. Recently, the city of Chicago announced an $8.5 billion expansion to O’Hare International Airport and plans for a Hyperloop express tunnel connecting O’Hare to the Loop, which will further strengthen the surrounding market.
Vacancy
Overall vacancy in the O’Hare market increased to 15.7 percent, up from 15.0 in the second quarter of 2018 as tenants such as T-Mobile vacated space in the market. Despite the increase, O’Hare vacancy is still the lowest of all the suburban submarkets.
Class A properties were the main contributors to the increase as vacancy rose to 13.9 percent, up from 12.6 percent in the second quarter of 2018. However, it is still a slight improvement from the 14.0 percent reported during the same time period of 2017.
The O’Hare market offers the lowest amount of sublease space of all the suburban markets at 0.3 percent.
Absorption
The O’Hare market reported 88,668 square feet of negative net absorption, compared to 46,129 square feet of positive net absorption at the end of the second quarter. While Class B assets reported positive 15,174 square feet, Absorption in Class A properties dropped to negative 108,583 square feet in the third quarter.
Large Blocks of Availability
Options for large space requirements are limited in the O’Hare market. There are currently only six properties that can accommodate large users of 100,000 square feet and above, all of which are classified as Class A. Only 3 of these large block opportunities are located in high quality “true” Class A assets.
Class A8,010,748 SF13.9% Vacant
Class B4,891,374 SF18.3% Vacant
Class C249,155 SF
22.5% Vacant
Vacant Space by Property Type
Class A Class B Class C
Vacant Space By Property Type
Net Absorption and Vacancy | O’Hare Office Market
Market IndicatorsRelative to prior periods Q3-17 Q2-18 Q3-18
Vacancy rate 16.9% 15.0% 15.7%
Absorption (YTD) 199,347 13,137 (75,531)
Rents $20.81 $21.14 $21.45
Inventory 13,151,277 13,151,277 13,151,277
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
5 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
Rents
O’Hare Class A gross asking rents are the highest in the suburbs, demonstrating the continued appetite for high quality office space. Class A asking rates increased to $33.10 per square foot gross in the third quarter of 2018, up from $32.95 in the second quarter.
The average asking rate for all classes also increased, rising to $21.45 per square foot gross, up from $21.14 at the second quarter.
Construction
No new speculative construction was completed in the O’Hare market during the third quarter of 2018. However, construction continues on the Elgin O’Hare extension. The improved access to O’Hare will reduce travel times to the airport as well as promote economic development in the O’Hare and surrounding areas. Construction on “The Pearl District,” Rosemont’s mixed-use development, is near completion as The Rose, a boutique hotel, is slated to open in December 2018 and Truluck’s restaurant is scheduled to open mid-October. The new development is already host to entertainment, two restaurants and a minor league baseball stadium.
In addition, construction continues on Central States Funds’ 150,000-square-foot build-to-suit development at 8655 W Higgins Road in Chicago and is scheduled for summer 2019 completion. Completion is scheduled for summer of 2019 and DHL has begun construction on a 25,000-square foot build-to-suit on the Pointe O’Hare II site in Rosemont.
Proposed projects include O’Hare Corporate Campus and 8201 W Higgins Road, a 3.5-acre development in Chicago that is being marketed to both office and retail users. If completed, these projects could add 1.4 million square feet to the O’Hare market.
161,676
143,525
133,235
132,591
113,091
104,956
86,087
55,000
53,427
48,771
9600 W Bryn Mawr Avenue
5450 N Cumberland Avenue
5500 Pearl Street
6300 N River Road
9377 W Higgins Road
9550 W Higgins Road
1101-1171 Tower Lane
9501 Technology Lane
8550 W Bryn Mawr Avenue
999 E Touhy Avenue
Significant Lease and Sale Activity
Top O’Hare Office Leasing Activity 3Q 2018TENANT BUILDING TOWN CLASS SIZE (SF) DEAL TYPE
Asking Gross Rental Rates | O’Hare Office Market
Top 10 Large Available Blocks by Square Feet
Recent O’Hare Office Investment Sales Activity 3Q 2018STATUS PROPERTY TOWN CLASS SIZE (SF) SALE PRICE PRICE/SF BUYER SELLER
Sold Triangle Plaza Chicago A 651,445 $141,000,000.00 $221.67 Shidler Group Equity Commonwealth
Sold O'Hare International Center Rosemont A 516,779 $64,000,000.00 $123.64 Bridge Investment Group The Blackstone Group
Sold 2300 E Devon Avenue Des Plaines B 239,331 $57,025,397.00 $238.27 Easterly Government Properties Saban Capital Group, Inc.
CLASS A CLASS B
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
No Significant 3Q Activity
NorthwestThe Northwest suburban office market has become home to an array of industries, making it one of the most diverse markets in the suburbs.
Vacancy
While the Northwest market has seen improvement in recent years, it has staggered throughout 2018. Third quarter overall vacancy ended at 23.8 percent, relatively flat from the 23.7 percent reported in the second quarter.
While Class A properties increased in vacancy, rising to 23.9 percent from 23.2 percent in the second quarter, Class B properties saw improvement, ending with 25.5 percent vacancy compared to 26.6 at the end of the second quarter.
Sublease options in the Northwest market remain low at 0.5 percent, remaining flat from second quarter.
Absorption
Overall quarterly net absorption in the Northwest market ended the third quarter at negative 23,235 square feet compared to positive 47,455 square feet reported during the second quarter.
Class A assets reported 135,885 square feet of negative absorption in the third quarter, due to tenants such as Catalina Marketing and First Midwest Bank returning space to the market.
Large Blocks of Availability
The Northwest market continues to offer the most options for large space requirements with 18 properties that can accommodate large (100,000 square feet and above) users, 14 of them being classified as Class A. Only 4 of these large block opportunities are located in high quality “true” Class A assets.
Class A 18,820,186 SF23.9% Vacant
Class B10,166,907 SF25.5% Vacant
Class C1,401,118 SF9.2% Vacant
Vacanct Space by Property Type
Class A Class B Class C
Vacant Space By Property Type
Net Absorption and Vacancy | Northwest Office Market
Market IndicatorsRelative to prior periods Q3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%
Absorption (YTD) (287,519) (212,315) (235,550)
Rents $19.02 $19.55 $19.61
Inventory 30,388,211 30,388,211 30,388,211
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
7 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
Rents
The Northwest suburban Class A average gross asking rate increased, rising to $25.89 per square foot gross, compared to $25.77 in the second quarter of 2018.
The average gross asking rate for all classes improved, rising to $19.61 per square foot gross, compared to $19.55 the second quarter of 2018.
Construction
No new speculative construction was completed in the Northwest market during the third quarter of 2018. However, McShane Development Company and MetLife Real Estate Investors are planning Huntington 90, a build-to-suit business park in Hoffman Estates, which can accommodate up to 500,000-square-foot facilities as well as the Offices at Veridian, a 16-acre redevelopment site on the former Motorola campus that can accommodate a user up to 500,000 square feet along with 5.2 acres of land next to Chatham Centre in Schaumburg that could accommodate up to 200,000 SF of Class A office space or up to 60,000 SF of showroom/office space. In addition, AT&T’s former headquarters, a 150-acre site in Hoffman Estates, is under contract with Somerset Development who is working on a mixed-use redevelopment plan for the property.
459,757
360,206
290,679
253,000
249,999
227,698
202,527
188,199
151,267
150,000
1400 & 1450 American Lane
1301 E Algonquin Road
2 Pierce Place
540 W Northwest Highway
3333 Beverly Road
2550 W Golf Road
1707 N Randall Road
1000 E Woodfield Road
150 N Martingale Road
3890 Salem Lake Drive
Asking Gross Rental Rates | Northwest Office Market
Top 10 Large Available Blocks by Square Feet
Significant Lease and Sale Activity
Recent Northwest Office Investment Sales Activity 3Q 2018STATUS PROPERTY TOWN CLASS SIZE (SF) SALE PRICE PRICE/SF BUYER SELLER
Sold Continental Towers Rolling Meadows A 837,849 $142.51 Rubenstein Partners GlenStar/Walton Street Capital
Sold Woodfield Pointe Office Center Schaumburg A 317,198 $75,363,072.00 $237.59 Davidson Kempner Capital Management
Lexington Realty Trust
UC Lakewood Center Hoffman Estates A 1,690,214 TBD TBD Somerset C-III Capital Partners, LLC
UC Daily Herald Office Center Arlington Heights B 147,373 TBD TBD TBD Paddock Publications
UC Fifth/Third Bank Building Mount Prospect A 103,564 TBD TBD TBD K & K Holdings, LLC
NEW 3890 Salem Lake Drive Long Grove A 150,000 TBD TBD TBD Asset Recovery Fund
Top Northwest Office Leasing Activity 3Q 2018TENANT BUILDING TOWN CLASS SIZE (SF) DEAL TYPE
Gerber National Claims Services Schaumburg Tech Center Schaumburg B 15,000 Renewal
CLASS A CLASS B
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
NorthHistorically home to many large financial and healthcare corporate occupiers, The North market has primarily attracted tenants due to proximity to executive housing and experienced labor force. However, the North market suffered its largest vacancy in decades as large corporations have moved some of their workforce downtown or have downsized. While it has made progress in recent quarters, the North market continues to struggle with vacancy and demand.
Vacancy
Vacancy in the North market increased in the third quarter of 2018 as tenants such due to AbbVie and Rand McNally vacating space in the market. Overall vacancy ended the quarter at 19.7 percent compared to second quarter’s 19.2 percent.
While Class A vacancy increased slightly to 21.5 percent compared to 21.3 percent in the previous quarter, Class B vacancy witnessed a more substantial increase as it rose to 15.8 percent form 14.8 percent in the second quarter.
When considering high quality, “true” Class A properties, vacancy is low at 9.1 percent, demonstrating the continued trend for corporate users to seek space in well located and amenitized assets.
Sublease options in the North market remain low at 1.3 percent, flat from second quarter of 2018.
Absorption
Third quarter net absorption in the North market was negative 144,752 square feet compared to positive 156,461 square feet reported during the second quarter.
Both Class A and B properties reported negative absorption in the third quarter.
Class A18,147,383 SF21.5% Vacant
Class B8,858,358 SF15.8% Vacant
Class C1,132,728 SF21.9% Vacant
Vacant Space by Property Type
Class A Class B Class C
Vacant Space By Property Type
Net Absorption and Vacancy | North Office Market
Market IndicatorsRelative to prior periods Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%
Absorption (YTD) (261,861) 113,496 (31,256)
Rents $22.17 $22.32 $22.57
Inventory 28,138,469 28,138,469 28,138,469
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
9 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
Large Blocks of Availability
There are 12 blocks of space available for large-sized tenants (100,000 square feet and above) in the North market, with nine of them being classified as Class A. However, when considering high quality, true Class A assets, options are limited.
Rents
Average Class A gross asking rent in the North increased to $31.89, compared to $31.74 per square foot gross in the second quarter of 2018.
The average gross asking rate for all classes also increased, rising to $22.57 per square foot gross, compared to $22.32 in the second quarter of 2018.
Construction
No new speculative construction was completed in the North market during the third quarter and none is expected for the remainder of 2018.
There are a few sites available for future build-to-suit projects in the North market, including Quadrangle Development’s 250,000-square-foot project in Deerfield.
672,027
302,678
205,724
175,545
168,167
154,998
139,927
139,915
121,000
103,115
600 N US Highway 45
2 Overlook Point
4000 Commercial Ave
300 Tower Parkway
3100 Sanders Road
100 Half Day Road
333-455 Knightsbridge Pky
300 N Field Drive
3600 W Lake Avenue
2355 Waukegan Road
Asking Gross Rental Rates | North Office Market
Significant Lease and Sale Activity
Recent North Office Investment Sales Activity 3Q 2018STATUS PROPERTY TOWN CLASS SIZE (SF) SALE PRICE PRICE/SF BUYER SELLER
NEW Two Overlook Point Lincolnshire A 318,403 TBD TBD TBD Northwestern Mutual Life Insurance
NEW 500 Davis Center Evanston A 127,565 TBD TBD TBD Steelbridge
NEW 2315 Sanders Road Northbrook B 78,600 TBD TBD TBD Old World Industries
Top North Office Leasing Activity 3Q 2018
TENANT BUILDING TOWN CLASS SIZE (SF) DEAL TYPE
Stericycle Bannockburn Lakes Office Park Bannockburn A 100,000 New
Astellas* 3100 Sanders Road Northbrook A 39,250 New
JUUL Labs, Inc.* Deerbrook Corporate Center Deerfield B 18,000 New
Top 10 Large Available Blocks by Square Feet
CLASS A CLASS B
*Colliers International Transaction
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
Lisle-NapervilleThe Lisle-Naperville market, known for attracting technology, energy and healthcare tenants with newer construction and bigger floor plates, continues to struggle after suffering a setback in 2016 as available space rose due to the merger and relocation activities of large tenants.
Vacancy
Overall vacancy in the Lisle-Naperville market remained relatively flat in the third quarter of 2018 at 22.5 percent compared to 22.4 percent in the second quarter. Class A properties were the culprit of most of the increase as it rose to 26.9 percent, up from 26.0 percent in the second quarter of 2018. When eliminating large blocks (100,000 square feet and greater) from inventory, vacancy in the Lisle-Naperville market is much lower at 16.9 percent.
When considering high quality, trophy properties, third quarter 2018 vacancy is substantially lower, ending at 11.0 percent.
Although it decreased to 2.1 percent in the third quarter from 2.8 percent sublease vacancy in the Lisle-Naperville market is among the highest in the market.
Absorption
Overall net absorption in the Lisle-Naperville market totaled negative 30,620 square feet compared to 92,374 square feet of positive net absorption in the second quarter.
A majority of the negative absorption in the Lisle-Naperville market came from Class A properties, due to tenants such as Farmers Insurance and Stanley Convergent giving up space in the market.
Class B properties ended the third quarter on a positive note with 59,124 square feet of positive net absorption compared to 54,633 square feet at the end of second quarter.
Class A8,761,882 SF26.9% VacantClass B
6,454,517 SF18.2% Vacant
Class C835,459 SF
10.0% Vacant
Vacant Space by Property Type
Class A Class B Class C
Vacant Space By Property Type
Net Absorption and Vacancy | Lisle-Naperville Office Market
Market IndicatorsRelative to prior periods Q3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%
Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17
Inventory 16,051,858 16,051,858 16,051,858
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
11 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
Large Blocks of Availability
Nine properties in the Lisle-Naperville market can accommodate large (100,000 square feet and above) users, seven of them being classified as Class A. Only one of these large block opportunities are located in a high quality “true” Class A asset.
Rents
Average Class A gross asking rent in the Lisle-Naperville market increased to $28.74 per square foot gross, compared to $28.57 in the second quarter.
The average gross asking rate for all classes decreased to $21.17 per square foot gross, compared to $21.27 in the second quarter of 2018.
Construction
While no new speculative construction was completed in the Lisle-Naperville market during the third quarter of 2018, developers continue to seek locations for build-to-suit opportunities. 263 Shuman Boulevard, a 360,451-square-foot property in Naperville is undergoing a complete redevelopment. Once complete, the property will feature enhanced landscaping and lobby area, along with improved amenities such as a 5-station full-service, food service area, coffee bar, tenant lounge, game rooms, multiple training and meeting rooms, fitness and wellness center and a bike room. In addition, 1415 W Diehl Road a 819,513-square foot property in Naperville is enhancing its already high quality amenities by further upgrading its common areas, food service, fitness center and conferencing facility.
328,524
250,000
205,633
194,954
162,000
136,000
106,000
102,616
101,763
94,375
263 Shuman Boulevard
4201 Winfield Road
2400 Cabot Drive
750 N Commons Boulevard
215 W Diehl Road
28301 Ferry Road
1415 W Diehl Road
4343 Commerce Court
2441 Warrenville Road
2275 Cabot Drive
Asking Gross Rental Rates | Lisle-Naperville Office Market
Significant Lease and Sale Activity
Top Lisle-Naperville Office Leasing Activity 3Q 2018TENANT BUILDING TOWN CLASS SIZE (SF) DEAL TYPE
Aldi Naperville Woods Office Center Naperville A 114,000 New
ARRIS Solutons, Inc.* Lisle Business Center Lisle B 71,000 Renewal
Amerisource Bergen Corporation* One Tellabs Center Naperville A 37,000 New
Quad Graphics* One Tellabs Center Naperville A 28,000 New
Acrisure* MetroWest Naperville A 17,500 New
Top 10 Large Available Blocks by Square Feet
Recent Lisle-Naperville Office Investment Sales Activity 3Q 2018STATUS PROPERTY TOWN CLASS SIZE (SF) SALE PRICE PRICE/SF BUYER SELLER
Sold 750 N Commons Drive Aurora B 112,665 $6,980,000.00 $61.95 SRC 750 North Commons, LLC Pembroke Capital, Inc.
UC Cornerstone I at Cantera Warrenville A 154,697 TBD TBD Fairbridge Partners Northwestern Mutual Life Insurance
NEW Washington Pointe Naperville A 163,623 TBD TBD TBD The Davis Company
NEW 975 Meridian Lakes Drive Aurora B 74,267 TBD TBD TBD AAA Michigan
CLASS A CLASS B
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
*Colliers International Transaction
Oak BrookThe Oak Brook market, which typically attracts smaller tenants in the 10,000- to 20,000-square-foot range and benefits from steady leasing velocity, continues to show improvement due to the impact of Class A leasing near Oakbrook Center Mall.
Vacancy
The Oak Brook market ended the third quarter of 2018 with an overall vacancy rate of 16.5 percent, up from the 16.2 that was reported in the second quarter.
While Class A properties increased in vacancy in the third quarter of 2018, rising to 15.4 percent from 14.9 percent in the second quarter, Class B assets remained flat at 18.6 percent. When considering high quality, trophy properties in the Oak Brook market, vacancy is lower, ending the quarter at 12.9 percent.
Sublease vacancy in the Oak Brook market remained flat at 2.1 percent.
Absorption
The Oak Brook market ended the third quarter of 2018 with 68,927 square feet of negative net absorption, up from second quarter’s total of 245,785 square feet of positive net absorption.
A majority of the negative absorption in the Oak Brook market came from Class A properties, due to McGraw Hill’s relocation to downtown.
Large Blocks Of Availability
The Oak Brook market offers limited options for large space requirements. Only four properties in the Oak Brook market can accommodate large (100,000 square feet and above) users, two of them being classified as Class A.
Class A13,146,201 SF15.4% Vacant
Class B9,286,246 SF18.6% Vacant
Class C874,542 SF
10.2% Vacant
Vacant Space by Property Type
Class A Class B Class C
Vacant Space By Property Type
Net Absorption and Vacancy | Oak Brook Office Market
Market IndicatorsRelative to prior periods Q3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%
Absorption (YTD) 112,504 332,168 263,241
Rents $20.29 $20.85 $21.17
Inventory 23,272,189 23,306,989 23,306,989
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
13 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
Rents
Class A average gross asking rate in the Oak Brook market rose to $30.43 per square foot gross, compared to $29.54 in the second quarter of 2018.
The average gross asking rate for all classes also increased, rising to $21.17 per square foot gross, compared to $20.85 in the second quarter of 2018.
Construction
No new construction was completed in the Oak Brook market during the third quarter of 2018 and no additional construction is expected for the remainder of 2018. However, build-to-suit activity continues as HUB Group is in the process of obtaining zoning rights to construct a new building on York Road next to its existing site for expansion, and Ryan Companies is planning a redevelopment of 700 Oakmont in Westmont. In addition, Hines has plans to redevelop the McDonald’s Campus in Oak Brook in a mixed-use development.
162,254
130,000
127,446
120,156
95,078
90,000
81,911
74,917
74,319
68,000
2001 York Road
700 Oakmont Lane
2122 York Road
*2707 Butterfield Road
747 E 22nd Street
1333 Burr Ridge Parkway
4 Westbrook Corporate Center
814 Comerce Drive
3050 Highland Parkway
1000 Royce Boulevard
Asking Gross Rental Rates | Oak Brook Office Market
Significant Lease and Sale Activity
Recent Oak Brook Office Investment Sales Activity 3Q 2018STATUS PROPERTY TOWN CLASS SIZE (SF) SALE PRICE PRICE/SF BUYER SELLER
Sold Executive Towers West Downers Grove A 699,634 $84,000,000.00 $120.08 Group RMC The Blackstone Group
Sold Butterfield Office Plaza Oak Brook B 200,774 $11,695,000.00 $58.25 Clear Height Properties Denholtz Associates
UC McDonald's Plaza Oak Brook A 348,951 TBD TBD TBD McDonald's
UC Oak Brook Gateway Oak Brook A 233,166 TBD TBD Fairbridge Partners The Blackstone Group
NEW Oak Brook Regency Towers Oak Brook A 441,720 TBD TBD TBD American Realty Advisors
NEW Highland Pointe I & II Lombard A 388,604 TBD TBD TBD Hamilton Partners
NEW Butterfield Ridge Office Centre Downers Grove A 71,552 TBD TBD TBD Azim Hemani
NEW 800 Enterprise Dr Oak Brook B 55,729 TBD TBD TBD Henry Crown & Co.
Top Oak Brook Office Leasing Activity 3Q 2018TENANT BUILDING TOWN CLASS SIZE (SF) DEAL TYPE
Kinder Morgan Eplanade V Downers Grove A 16,000 Renewal/Downsize
Top 10 Large Available Blocks by Square Feet
*Sublease
CLASS A CLASS B
Chicago Suburban Office | Local Standards - 3rd Quarter 2018Office Market Statistics | Charts
Row Reference:2 O'Hare
Q3-17 Q2-18 Q3-18Vacancy rate 16.9% 15.0% 15.7%Absorption (YTD) 199,347 13,137 (75,531)Rents $20.81 $21.14 $21.45Inventory 13,151,277 13,151,277 13,151,277
3 NorthwestQ3-17 Q2-18 Q3-18
Vacancy rate 24.3% 23.7% 23.8%Absorption (YTD) (287,519) (212,315) (235,550)Rents $19.02 $19.55 $19.61Inventory 30,388,211 30,388,211 30,388,211
4 North Q3-17 Q2-18 Q3-18
Vacancy rate 19.6% 19.2% 19.7%Absorption (YTD) (261,861) 113,496 (31,256)Rents $22.17 $22.32 $22.57Inventory 28,138,469 28,138,469 28,138,469
5 Lisle/NapervilleQ3-17 Q2-18 Q3-18
Vacancy rate 20.9% 22.4% 22.5%Absorption (YTD) 97,469 (221,816) (252,436)
Rents $20.69 $21.27 $21.17Inventory 16,051,858 16,051,858 16,051,858
6 Oak BrookQ3-17 Q2-18 Q3-18
Vacancy rate 18.4% 16.2% 16.5%Absorption (YTD) 112,504 332,168 263,241Rents $20.29 $20.85 $21.17Inventory 23,272,189 23,306,989 23,306,989
7 Overall Suburban OfficeQ3-17 Q2-18 Q3-18
Vacancy rate 20.5% 19.8% 20.1%Absorption (YTD) (140,060) 24,670 (331,532)Rents $20.60 $21.03 $21.19Inventory 111,002,004 111,036,804 111,036,804
Up-Down Indicators (Input the Quarters You Wish to Compare in the Black Boxes)
(75,531)
440,932
(84,236)
156,204
205,692
61,531
15.7%15.1%
18.4%17.8%19.0%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyO'Hare Submarket
Absorption VacancySource: Costar; Colliers International Research
(235,550)
91,224
(497,924)
(67,430)
340,702 378,875 23.8%
23.0%
23.3%
21.7%
21.5%
22.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
24.0%
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyNorthwest Submarket
Absorption VacancySource: Costar; Colliers International Research
(31,256)
(246,727)
(80,819)
679,294
(830,609)
241,526
19.7%19.6%
18.7%
18.4%
20.8%
17.9%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
(1,000,000)
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
201820172016201520142013
Net Absorption & VacancyNorth Submarket
Absorption VacancySource: Costar; Colliers International Research
(252,436)
81,434
(152,284)
(443,949)
85,049 53,008
22.5%21.0%21.5%
20.5%
17.1%17.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
100,000
200,000
201820172016201520142013
Net Absorption & VacancyLisle/Naperville Submarket
Absorption VacancySource: Costar; Colliers International Research
263,241
317,245
205,476
431,673
265,884
(150,696)
16.5%17.5%
18.9%19.8%
21.5%22.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
201820172016201520142013
Net Absorption & VacancyOak Brook Submarket
Absorption VacancySource: Costar; Colliers International Research
(331,532)
684,108
(609,787)
755,792
66,718
584,244
20.1%
19.8%
20.4%
19.8%
20.4%20.5%
19.7%
19.8%
19.9%
20.0%
20.1%
20.2%
20.3%
20.4%
20.5%
(800,000)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
201820172016201520142013
Net Absorption & VacancyOverall Suburban Office
Absorption VacancySource: Costar; Colliers International Research
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesO'Hare Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorthwest Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesNorth Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesLisle/Naperville Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOak Brook Submarket
Source: Costar; Colliers International Research Class A Class B AverageClass C
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
201820172016201520142013
Asking Gross Rental RatesOverall Suburban Office
Source: Costar; Colliers International Research Class A Class B Class C Average
18.4%
23.3%
18.7%
21.5%
18.9%
15.1%
23.0%
19.6%21.0%
17.5%15.7%
23.8%
19.7%
22.5%
16.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
O'Hare Northwest North Lisle/Naperville Oak Brook
Vaca
ncy
(%)
Submarket Vacancy Rates2016 - 2018
2016 2017
Source: Costar; Colliers International Research
14 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
Third Quarter 2018 Office Market Statistics | Local Standards
CLASS BLDGS TOTAL INVENTORY SF
DIRECT VACANCY
RATE
SUBLEASE VACANCY
RATE
VACANCY RATE
CURRENT QTR
VACANCY RATE PRIOR
QTR
QUARTERLY NET ABSORPTION –SF
NET YTD ABSORPTION –SF
COMPLETIONS CURRENT QTR
- SF
UNDER CONSTRUCTION
- SFRENTS
O’HAREClass A 36 8,010,748 13.5% 0.4% 13.9% 12.6% (108,583) (151,165) 0 0 $33.10
Class B 48 4,891,374 18.3% 0.0% 18.3% 18.6% 15,174 102,631 0 0 $18.62
Class C 7 249,155 22.5% 0.0% 22.5% 24.4% 4,741 (26,997) 0 0 $12.62
Subtotal 91 13,151,277 15.5% 0.3% 15.7% 15.0% (88,668) (75,531) 0 0 $21.45
NORTHWESTClass A 88 18,820,186 23.3% 0.6% 23.9% 23.2% (135,885) (362,754) 0 0 $25.89
Class B 171 10,166,907 25.1% 0.4% 25.5% 26.6% 102,811 111,354 0 0 $17.62
Class C 28 1,401,118 9.2% 0.0% 9.2% 9.9% 9,839 15,850 0 0 $15.32
Subtotal 287 30,388,211 23.3% 0.5% 23.8% 23.7% (23,235) (235,550) 0 0 $19.61
NORTHClass A 113 18,147,383 20.3% 1.2% 21.5% 21.3% (37,679) 156,297 0 0 $31.89
Class B 147 8,858,358 14.4% 1.4% 15.8% 14.8% (92,060) (225,639) 0 0 $18.15
Class C 29 1,132,728 21.3% 0.6% 21.9% 20.6% (15,013) 38,086 0 0 $17.67
Subtotal 289 28,138,469 18.4% 1.3% 19.7% 19.2% (144,752) (31,256) 0 0 $22.57
LISLE/NAPERVILLEClass A 54 8,761,882 23.8% 3.1% 26.9% 26.0% (83,742) (271,960) 0 0 $28.74
Class B 121 6,454,517 17.3% 0.9% 18.2% 19.1% 59,124 34,377 0 0 $18.06
Class C 22 835,459 10.0% 0.0% 10.0% 9.3% (6,002) (14,853) 0 0 $16.70
Subtotal 197 16,051,858 20.5% 2.1% 22.5% 22.4% (30,620) (252,436) 0 0 $21.17
OAK BROOKClass A 67 13,146,201 14.0% 1.4% 15.4% 14.9% (73,428) 217,516 0 0 $30.43
Class B 145 9,286,246 15.4% 3.2% 18.6% 18.6% (5,175) 21,748 0 0 $18.52
Class C 19 874,542 10.2% 0.0% 10.2% 11.3% 9,676 23,977 0 0 $14.56
Subtotal 231 23,306,989 14.4% 2.1% 16.5% 16.2% (68,927) 263,241 0 0 $21.17
SUBURBAN TOTALClass A 358 66,886,400 19.5% 1.2% 20.8% 20.1% (439,317) (412,066) 0 0 $30.01
Class B 632 39,657,402 18.3% 1.3% 19.7% 19.9% 79,874 44,471 0 0 $18.19
Class C 105 4,493,002 13.3% 0.2% 13.5% 13.6% 3,241 36,063 0 0 $15.37
Subtotal 1,095 111,036,804 18.9% 1.2% 20.1% 19.8% (356,202) (331,532) 0 0 $21.19
QUARTERLY COMPARISON AND TOTALSQ3-18 1,095 111,036,804 18.9% 1.2% 20.1% 19.8% (356,202) (331,532) 0 0 $21.19Q2-18 1,095 111,036,804 18.4% 1.4% 19.8% 20.3% 588,204 24,670 34,800 0 $21.03
Q1-18 1,094 111,002,004 19.0% 1.3% 20.3% 19.8% (563,534) (563,534) 0 34,800 $20.99
Q4-17 1,094 111,002,004 18.7% 1.1% 19.8% 20.5% 821,830 684,108 0 34,800 $20.81
Q3-17 1,094 111,002,004 19.6% 0.9% 20.5% 20.7% 174,458 (140,060) 0 34,800 $20.60
*AT&T Corporate Campus in Hoffman Estates has been excluded from stats.
15 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
Third Quarter 2018 Office Market Statistics | Includes Owner Occupied Properties
CLASS BLDGS TOTAL INVENTORY SF
DIRECT VACANCY RATE
SUBLEASE VACANCY RATE
TOTAL VACANCY RATE CURRENT QTR
TOTAL VACANCY RATE
PRIOR QTR
QUARTERLY NET ABSORPTION –SF
NET YTD ABSORPTION –SF
COMPLETIONS CURRENT QTR - SF
UNDER CONSTRUCTION - SF
O’HAREClass A 41 8,540,440 14.1% 0.5% 14.5% 13.6% (81,050) (123,632) 0 0
Class B 63 5,549,867 16.6% 0.0% 16.6% 18.0% 74,704 173,982 0 0
Class C 16 657,554 10.0% 0.0% 10.0% 10.3% 1,521 (28,129) 0 0
Subtotal 120 14,747,861 14.8% 0.3% 15.1% 15.1% (4,825) 22,221 0 0
NORTHWESTClass A 109 23,704,414 25.5% 0.5% 26.1% 25.5% (105,978) (302,888) 30,000 0
Class B 330 17,090,165 20.9% 0.5% 21.4% 21.6% 38,947 20,888 0 0
Class C 63 2,335,177 10.9% 0.0% 11.0% 10.8% (3,109) 24,506 0 0
Subtotal 502 43,129,756 22.9% 0.5% 23.4% 23.2% (70,140) (257,494) 30,000 0
NORTHClass A 143 23,985,885 17.5% 0.9% 18.4% 18.3% (39,059) (39,059) 0 0
Class B 287 21,943,141 7.4% 0.6% 8.0% 7.6% (87,907) (10,438) 0 0
Class C 63 2,078,705 15.5% 0.3% 15.8% 15.7% (1,512) (34,866) 0 0
Subtotal 493 48,007,731 12.8% 0.8% 13.6% 13.3% (128,478) 107,398 0 0
LISLE/NAPERVILLEClass A 67 12,720,287 16.7% 2.1% 18.8% 18.0% (99,015) (285,316) 0 0
Class B 223 12,442,846 10.9% 0.6% 11.5% 12.9% 173,277 96,714 0 0
Class C 55 2,474,136 4.7% 0.0% 4.7% 4.9% 4,402 49,032 0 0
Subtotal 345 27,637,269 13.0% 1.2% 14.3% 14.6% 78,664 (139,570) 0 0
OAK BROOKClass A 78 14,848,537 12.8% 1.3% 14.1% 13.6% (78,282) 261,705 0 0
Class B 221 12,522,813 12.8% 2.3% 15.1% 15.3% 10,407 (9,518) 0 0
Class C 53 2,067,547 5.3% 0.0% 5.3% 6.9% 32,807 70,059 0 0
Subtotal 352 29,438,897 12.3% 1.6% 13.9% 13.8% (35,068) 322,246 0 0
SUBURBAN TOTALClass A 438 83,799,563 18.5% 1.0% 19.5% 19.0% (403,384) (297,429) 30,000 0
Class B 1,124 69,548,832 13.1% 0.8% 13.8% 14.2% 209,428 271,628 0 0
Class C 250 9,613,119 9.0% 0.1% 9.1% 9.5% 34,109 80,602 0 0
Subtotal 1,812 162,961,514 15.6% 0.9% 16.5% 16.4% (159,847) 54,801 30,000 0
QUARTERLY COMPARISON AND TOTALSQ3-18 1,812 162,961,514 15.6% 0.9% 16.5% 16.4% (159,847) 54,801 30,000 0Q2-18 1,811 162,931,514 15.4% 1.0% 16.4% 16.7% 622,121 214,648 34,800 30,000
Q1-18 1,810 162,896,714 15.8% 0.9% 16.7% 16.5% (407,473) (407,473) 0 64,800
Q4-17 1,810 162,896,714 15.7% 0.8% 16.5% 17.1% 1,134,276 2,176,300 183,000 64,800
Q3-17 1,809 162,713,714 16.4% 0.7% 17.1% 17.3% 274,227 1,042,024 21,018 247,800
16 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
LN=Lisle/Naperville N=North NW=Northwest OB=Oak Brook Area O=O’Hare FS=For Sale NEW=New to Market UC=Under Contract
Top Lease Transactions 2018 | Suburban Chicago
TENANT ADDRESS TOWN SUBMARKET CLASS SIZE (SF) TYPE QUARTER
CVS Caremark Riverwalk II Buffalo Grove N A 141,000 Renewal 2Q2018
Aldi Naperville Woods Office Center Naperville LN A 114,000 New 3Q2018
Komatsu America Triangle Plaza Chicago O A 100,000 New 1Q2018
Stericycle Bannockburn Lakes Office Park Bannockburn N A 100,000 New 3Q2018
Allstate* 9022 Heritage Parkway Woodridge OB B 94,250 Renewal 1Q2018
ARRIS Solutons, Inc.* Lisle BusinessCenter Lisle LN B 71,000 Renewal 3Q2018
T-Mobile Executive Towers West Downers Grove OB A 70,000 New 1Q2018
AjroHuntleigh* Meadows Office Park Addison NW B 62,000 Expansion 1Q2018
Mizkin America Kensington Office Plaza Mount Prospect NW A 54,000 Renewal 1Q2018
Elkay* Woodland Corprate Tower Downers Grove OB A 47,000 New 1Q2018
Alera Group, Inc.* Three Parkway North Deerfield N A 45,000 Expansion 2Q2018
AveXis Innovation Park Libertyville N A 44,000 New 1Q2018
Northrop Grumman Corporation Northwest Crossings Arlington Heights NW A 41,750 New 1Q2018
WOW! 4350 Weaver Parkway Warrenville LN B 40,000 New 2Q2018
Astellas* 3100 Sanders Road Northbrook N A 39,250 New 3Q2018
Amerisource Bergen Corporation* One Tellabs Center Naperville LN A 37,000 New 3Q2018
Wipfli* Tri-State International Lincolnshire N A 33,500 New 1Q2018
Engs Commercial Finance One Pierce Place Itasca NW A 33,000 Sublease 1Q2018
Schenker, Inc.* Chatham Center Schaumburg NW A 31,500 New 2Q2018
Depomed Landmark of Lake Forest I Lake Forest N A 31,250 New 1Q2018
Akron, Inc. West Lake of Conway Park Lake Forest N A 34,500 Renewal 1Q2018
Live Nation Atrium Corporate Center Rolling Meadows NW A 34,500 Renewal/Expansion 1Q2018
G Treasury Riverwalk II Buffalo Grove N A 31,000 New 1Q2018
GSA* 5100 River Road Schiller Park O A 30,000 Renewal 2Q2018
Capgemini 6400 Shafer Court Rosemont O A 29,000 Renewal 2Q2018
Quad Graphics* One Tellabs Center Naperville LN A 28,000 New 3Q2018
Hitachi High Technologies Woodfield Preserve Schaumburg NW A 26,500 Renewal 1Q2018
IAT Insurance Group Continental Towers Rolling Meadows NW A 23,500 New 1Q2018
Fresenius Medical Care of Illinois Corporate Plaza of Elmhurst Elmhurst OB B 22,750 Renewal 2Q2018
OMS Woodfield Corporate Center Schaumburg NW A 22,500 New 2Q2018
Arkadin Schaumburg Corporate Center Schaumburg NW A 21,500 Renewal/Downsize 2Q2018
Industrious 909 Davis Street Evanston N A 20,000 New 1Q2018
Oak Street Health The Crossings Oak Brook OB A 19,500 New 2Q2018
JUUL Labs, Inc.* Deerbrook Corporate Center Deerfield N B 18,000 New 3Q2018
Securitas Sercurity Serices USA* Woodland Corporate Tower Downers Grove OB A 18,000 Expansion 1Q2018
Acrisure* MetroWest Naperville LN A 17,500 New 3Q2018
American Auto Garden Two Century Centre Schaumburg NW A 16,000 Renewal 2Q2018
Kinder Morgan Eplanade V Downers Grove OB A 16,000 Renewal/Downsize 3Q2018
Effner Financial Schaumburg Corporate Center Schaumburg NW A 16,000 Renewal 2Q2018
WSP USA, Inc.* Lisle Business Center Lisle LN B 15,750 Renewal 2Q2018
ACEOM 25 NW Point Building Elk Grove Village NW A 15,000 Expansion 2Q2018
Asset Recovery Solutions, LLC.* O'Hare Lake Office Park Des Plaines O B 15,500 Renewal 1Q2018
Gerber National Claims Services Schaumburg Tech Center Schaumburg NW B 15,000 Renewal 3Q2018
*Colliers International Transaction
17 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
LN=Lisle/Naperville N=North NW=Northwest OB=Oak Brook Area O=O’Hare FS=For Sale NEW=New to Market UC=Under Contract
2018 Investment Sale Activity | Suburban Chicago
STATUS PROPERTY TOWNSUB-MARKET CLASS SIZE (SF) SALE PRICE
PRICE/SF BUYER SELLER QUARTER
Sold Westbrook Corporate Center Westchester OB A 1,073,408 $132,000,000.00 $122.97 RMC Corporation
The Blackstone Group
2Q2018
Sold Schaumburg Towers Schaumburg NW A 882,069 $86,600,000.00 $98.18 American Landmark Properties
Retail Properties of America 2Q2018
Sold Continental Towers Rolling Meadows NW A 837,849 $121,500,000.00 $142.51 Rubenstein
PartnersGlenStar/Walton Street Capital 3Q2018
Sold Executive Towers West Downers Grove OB A 699,634 $84,000,000.00 $120.08 Group RMC The Blackstone
Group 3Q2018
Sold Triangle Plaza Chicago O A 651,445 $141,000,000.00 $221.67 Shidler Group Equity Commonwealth 3Q2018
Sold O'Hare International Center Rosemont O A 516,779 $64,000,000.00 $123.64 Bridge Investment
GroupThe Blackstone Group 3Q2018
Sold Windy Point I & II Schaumburg NW A 488,795 $71,383,621.00 $146.04 Bridge Investment Group
Piedmont Office Realty Trust 1Q2018
Sold Presidents Plaza Chicago O A 431,346 $147,000,000.00 $174.93 Angelo Gordon & Co. GlenStar Properties 2Q2018
Sold Naperville Corporate Center Naperville LN A 420,391 $38,725,000.00 $92.12 Real Capital
Solutions, Inc. TriGate Capital, LLC 1Q2018
Sold 263 Shuman Boulevard Naperville LN A 354,000 Undisclosed Bixby Bridge
CapitalColumbia Property Trust 2Q2018
Sold Woodfield Pointe Office Center Schaumburg NW A 317,198 $75,363,072.00 $237.59
Davidson Kempner Capital Management
Lexington Realty Trust 3Q2018
Sold 1603 Orrington Ave Evanston N A 307,528 $91,300,000.00 $269.28 Golub & Company Investcorp International, LLC 2Q2018
Sold 2300 E Devon Avenue Des Plaines O B 239,331 $57,025,397.00 $238.27 Easterly Government Properties
Saban Capital Group, Inc. 3Q2018
Sold Two Woodfield Lake Schaumburg NW B 240,880 $11,800,000.00 $48.99 Vinakom McKnight Capital 1Q2018
Sold 2625 Butterfield Road Oak Brook OB B 214,767 $13,000,000.00 $60.53 Clear Height Properties
Denholtz Associates 2Q2018
Sold 1051 Perimeter Drive Schaumburg NW B 201,188 $6,050,000.00 $30.07 Marc Realty Sabal Financial Group, LP 1Q2018
Sold Butterfield Office Plaza Oak Brook OB B 200,774 $11,695,000.00 $58.25 Clear Height
PropertiesDenholtz Associates 3Q2018
Sold InterPark Corporate Center Chicago O B 165,000 $9,400,000.00 $56.97 Berger Asset
ManagementThe Equitable Funds, LLC 2Q2018
Sold 2300 Cabot Drive Lisle LN A 151,664 $22,149,010.00 $146.04 Bridge Investment Group
Piedmont Office Realty Trust 1Q2018
Sold 4245 Meridian Parkway Aurora LN A 140,384 $22,474,000.00 $160.09 GFH Financial
GroupExeter Property Group 2Q2018
Sold 544 Lakeview Parkway Vernon Hills N A 139,324 $14,200,000.00 $101.92 Ravinia Capital
GroupWells Real Estate Funds 2Q2018
Sold Balmoral Business Campus Rosemont O A 133,327 $11,200,000.00 $84.06 Integris Ventures Balmoral Business
Campus Assoc. 2Q2018
Sold Oakmont Office Circle Westmont OB A 121,666 $12,025,000.00 $98.84 Group RMC TA Realty 1Q2018Sold Oak Creek Center Lombard OB B 119,933 $9,009,855.00 $75.12 Group RMC Golub & Company 1Q2018
Sold Naperville Corporate Office Park Naperville LN A 115,753 $5,000,000.00 $43.20 DynaCom
ManagementMidland Loan Services 2Q2018
Sold 750 N Commons Drive Aurora LN B 112,665 $6,980,000.00 $61.95 SRC 750 North Commons, LLC
Pembroke Capital, Inc. 3Q2018
Sold Willow Lake Tech Center Schaumburg NW B 103,900 $6,150,000.00 $59.66 Ascendance
PartnersWelsh Office Center, LLC. 2Q2018
Sold Golf Corporate Centre Arlington Heights NW B 93,007 $6,300,294.00 $67.74 Chicagoland
CommercialChicagoland Commercial 2Q2018
Sold Kensington Office Plaza I Mount Prospect NW A 89,000 $6,750,000.00 $75.84 Progresiff LP First Industrial
Realty Trust 2Q2018
18 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
LN=Lisle/Naperville N=North NW=Northwest OB=Oak Brook Area O=O’Hare FS=For Sale NEW=New to Market UC=Under Contract
2018 Investment Sale Activity | Suburban Chicago
STATUS PROPERTY TOWNSUB-MARKET CLASS SIZE (SF) SALE PRICE
PRICE/SF BUYER SELLER QUARTER
Sold Eden's Gateway Skokie N B 65,368 $5,304,878.00 $81.15 Shure, Inc. The Alter Group 2Q2018
Sold Naperville Financial Center I Naperville LN A 57,848 $6,400,000.00 $110.63
Gateway Investment Partners
Sara Investment Real Estate 2Q2018
Sold University Place Evanston N A 55,685 $10,759,500.00 $193.22 Northwestern Memorial Hospital Hill Properties 2Q2018
UC Lakewood Center Hoffman Estates NW A 1,690,214 TBD TBD Somerset C-III Capital
Partners, LLC Marketing
UC McDonald's Plaza Oak Brook OB A 348,951 TBD TBD TBD McDonald's Marketing
UC Oak Brook Gateway Oak Brook OB A 233,166 TBD TBD Fairbridge Partners The Blackstone Group Marketing
UC Cornerstone I at Cantera Warrenville LN A 154,697 TBD TBD Fairbridge Partners
Northwestern Mutual Life Insurance
Marketing
UC Daily Herald Office Center
Arlington Heights NW B 147,373 TBD TBD TBD Paddock
Publications Marketing
UC Fifth/Third Bank Building Mount Prospect NW A 103,564 TBD TBD TBD K & K Holdings, LLC Marketing
UC ArborLake Centre Deefield N A 196,523 TBD TBD TBD James Campbell Company Marketing
NEW Oak Brook Regency Towers Oak Brook OB A 441,720 TBD TBD TBD American Realty
Advisors Marketing
NEW Highland Pointe I & II Lombard OB A 388,604 TBD TBD TBD Hamilton Partners Marketing
NEW Two Overlook Point Lincolnshire N A 318,403 TBD TBD TBDNorthwestern Mutual Life Insurance
Marketing
NEW Washington Pointe Naperville LN A 163,623 TBD TBD TBD The Davis Company Marketing
NEW 3890 Salem Lake Drive Long Grove NW A 150,000 TBD TBD TBD Asset Recovery
Fund Marketing
NEW 500 Davis Center Evanston N A 127,565 TBD TBD TBD Steelbridge Marketing
NEW 2315 Sanders Road Northbrook N B 78,600 TBD TBD TBD Old World Industries Marketing
NEW 975 Meridian Lakes Drive Aurora LN B 74,267 TBD TBD TBD AAA Michigan Marketing
NEW Butterfield Ridge Office Centre Downers Grove OB A 71,552 TBD TBD TBD Azim Hemani Marketing
NEW 800 Enterprise Dr Oak Brook OB B 55,729 TBD TBD TBD Henry Crown & Co. Marketing
FS Centennial Center Schaumburg NW A 276,215 TBD TBD TBD Sovereign Partners, LLC Marketing
FS 540 W Northwest Highway Barrington NW B 253,000 TBD TBD TBD Bourns, Inc Marketing
FS Two Century Centre Schaumburg NW A 226,387 TBD TBD TBD Sovereign Partners, LLC Marketing
FS 2400 Cabot Drive Lisle LN A 205,633 TBD TBD TBD GlenStar Marketing
FS Commerce Point I & II Arlington Heights NW A 189,177 TBD TBD TBD Harjit Singh Marketing
FS Darien Business Park Darien OB B 175,505 TBD TBD TBD The Capital Companies, LLC Marketing
FS Deer Park Office Center Deer Park N A 167,077 TBD TBD TBD Hamilton Partners Marketing
FS 300 N Field Drive Lake Forest N A 139,915 TBD TBD TBD The Missner Group MarketingFS 28301 Ferry Road Warrenville LN B 136,234 TBD TBD TBD FD Stone Water Marketing
FS 1250 N Arlington Heights Road Itasca NW A 130,934 TBD TBD TBD Hamilton Partners Marketing
FS 2245 Sequoia Drive Aurora LN A 129,253 TBD TBD TBD Zeller Realty MarketingFS 777 Big Timber Road Elgin NW A 127,280 TBD TBD TBD InterCoastal Group Marketing
FS 700 N Wood Dale Road Wood Dale NW B 125,523 TBD TBD TBD UBS Realty Investors, LLC Marketing
19 Research & Forecast Report | Third Quarter 2018 | Suburban Chicago / Office | Colliers International
2018 Investment Sale Activity | Suburban Chicago
STATUS PROPERTY TOWNSUB-MARKET CLASS SIZE (SF) SALE PRICE
PRICE/SF BUYER SELLER QUARTER
FS 141 NW Point Boulevard
Elk Grove Village NW B 114,642 TBD TBD TBD American Academy
of Pediatrics Marketing
FS 360 E 22nd Street Lombard OB B 111,185 TBD TBD TBD Levy Organization Marketing
FS Commerce Plaza of Buffalo Grove Buffalo Grove N B 98,105 TBD TBD TBD 1845 North
Clybourn, LLC Marketing
FS Commerce Point II Arlington Heights NW A 95,682 TBD TBD TBD Harhit Singh Marketing
FS 2600 Forbes Avenue Hoffman Estates NW A 90,000 TBD TBD TBD Serta International Marketing
FS Kensington Corporate Center Mount Prospect NW A 87,453 TBD TBD TBD Nanta
Buranakanchana Marketing
FS Deerpath Atrium Vernon Hills N B 77,646 TBD TBD TBD EquiTrust Life Insurance Marketing
FS 3250 N Arlington Heights Rd Itasca NW B 72,961 TBD TBD TBD The John Buck
Company Marketing
FS 4201 Lake Cook Road Northbrook N B 66,000 TBD TBD TBD ACG Management Co Marketing
FS 27545 Diehl Road Warrenville LN B 62,440 TBD TBD TBDBurnham Management Company
Marketing
FS 3201 Old Glenview Road Wilmette N B 60,047 TBD TBD TBD Terraco, Inc. Marketing
FS Basswood Executive Plaza Schaumburg NW B 54,641 TBD TBD TBD CR-Basswood, LLC Marketing
FS 2125 Point Boulevard Elgin NW B 52,700 TBD TBD TBD Hudson Americas, LP Marketing
FS Fountain Square Building Evanston N B 52,398 TBD TBD TBD Mavakis Properties Marketing
FS MidPoint I Woodridge LN B 51,579 TBD TBD TBD Atni Management, LLC Marketing
Copyright © 2017 Colliers International
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
About Colliers International Colliers International Group Inc. (NASDAQ and TSX: CIGI) is an industry-leading global real estate services company with 15,000 skilled professionals operating in 68 countries. With an enterprising culture and significant employee ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting. Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that help clients accelerate their success. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 12 consecutive years, more than any other real estate services firm.
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