The 4th quarter of 2013 only saw 23,459 square feet of net absorption though overall the year of 2013 ended with the suburban office market adding 1,289,406 square feet. This is the first time in seven years that the market saw an absorption above 1,000,000 square feet. Overall, there was no suburban submarket that saw absorption over 150,000 square feet in either direction.
Only one deal in the suburbs of Chicago was completed over 100,000 square feet which was Zebra Technologies, a sublease which will become a direct deal for 230,000 square feet. A continued trend of suburban companies moving to downtown Chicago or out of state is underway. With mergers and competitive deals available elsewhere this trend shall continue.
The direct vacancy rate has increased only 0.1% from 19.9% to 20.0%, despite the stagnant movement of the 4th quarter. Total vacancy rate stands at 20.8%.
Gross rental rates are averaging $0.41 higher than last year, ending 2013 with an average of $21.20 per square foot.
Gross Building SF
Average Gross Rate PSF
4th Quarter 2013 Stagnant; 2013 ends statistically better than 2012.