{"id":1004717805,"date":"2024-06-28T06:53:14","date_gmt":"2024-06-28T14:53:14","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004717805"},"modified":"2024-07-16T03:51:55","modified_gmt":"2024-07-16T11:51:55","slug":"chicago-office-prices-lowest-among-gateway-markets","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/chicago-office-prices-lowest-among-gateway-markets\/","title":{"rendered":"Chicago Office Prices Lowest Among Gateway Markets"},"content":{"rendered":"\n

<\/p>\n\n\n

\n
\"Future<\/a>
Hyde Park Labs will come online at the end of the year. Image courtesy of Trammell Crow Co.<\/em><\/figcaption><\/figure><\/div>\n\n\n

Due to several challenges in the office sector, including reduced demand and high interest rates, office sales nationwide have been driven by institutions selling high-quality assets. This strategy helped them balance their portfolios, reduce their office exposure and mitigate risk on their balance sheets.<\/p>\n\n\n\n

Despite the market\u2019s tame metrics, year-to-date through April, Chicago logged $223 million in office sales at an average price of $81 per square foot, according to CommercialEdge data. <\/p>\n\n\n\n

A halt in new construction starts<\/h2>\n\n\n\n

In April, Chicago had 1.0 million square feet of office space underway, which represented 0.3 percent of existing stock. Meanwhile, the national figure stood at 1.5 percent. Among peer markets, Chicago was on par with Washington, D.C. (0.9 percent), while other metros such as Seattle (3.6 percent) recorded above-average figures.<\/p>\n\n\n

\n
\"A<\/a>
The 919 W. Fulton St. building will be the tallest in the Fulton Market Historic District. Image by Neoscape, courtesy of Fulton Street Cos.<\/em> <\/figcaption><\/figure><\/div>\n\n\n

The second largest project underway is 919 West Fulton<\/a>, a 360,000-square-foot development in Chicago\u2019s downtown. The developer, Fulton Street Cos., has secured $233 million in both equity and debt financing for the 11-story office building.<\/p>\n\n\n\n

Trammell Crow Co. <\/strong>and Beacon Capital Partners <\/strong>have recently topped out another major project, a 302,388-square-foot life science development<\/a> in Chicago\u2019s South Side neighborhood. Hyde Park Labs is scheduled to be fully delivered in the fourth quarter of this year, with first tenants expected to move in by early 2025.<\/p>\n\n\n\n

Approximately 875,000 square feet of office space across seven properties was delivered in the metro year-to-date, accounting for 0.5 percent of the total stock. A few gateway markets stood out in terms of office space coming online in this period, including Seattle (2.5 million square feet), Boston (1.4 million square feet) and San Francisco (1.4 million square feet). <\/p>\n\n\n\n

Lowest sales price among gateway markets<\/h2>\n\n\n\n

Year-to-date through May, some $223 million in office sales were recorded, as Chicago office prices stood at $81 per square foot. That’s lower than the national average of $151.29 per square foot. A total of 21 properties exchanged hands, totaling 7 million square feet.<\/p>\n\n\n\n

Coming up next, the Twin Cities saw $177 million in closed office deals at an average of $163 per square foot, while Detroit recorded a small volume of $43 million, with properties trading at $76 per square foot.<\/p>\n\n\n\n

Sixth-lowest asking rent<\/h2>\n\n\n\n

Meanwhile, the market\u2019s vacancy rate stood at 19.1 percent, up 30 basis points year-over-year in April, while the rents contracted by 20 basis points, coming in at $27.85 per square foot: the sixth-lowest asking rent across the top 25 U.S. office markets.<\/p>\n\n\n\n

Boston (12.4 percent), Miami (13.0 percent), Washington, D.C. (16.8 percent) and Los Angeles (16.5 percent) all fared better than Manhattan in terms of vacancy. On the other side of the spectrum, Seattle (23 percent) and San Francisco (25.9 percent) saw even larger rates.<\/p>\n\n\n

\n
\"353<\/a>
The office tower at 353 N. Clark St. in Chicago totals 1.2 million square feet.\u00a0Image courtesy of CommercialEdge<\/em><\/figcaption><\/figure><\/div>\n\n\n

A small number of leases closed in Chicago\u2019s office sector through April. Heitman has landed a 10-year lease extension<\/a> at its office tower in Chicago\u2019s River North area. Financial services firm Mesirow will continue to occupy more than 100,000 square feet at 353 N. Clark St. through 2036. <\/p>\n\n\n\n

Ivanho\u00e9 Cambridge\u00a0and\u00a0Hines have signed a lease agreement with\u00a0Pinterest\u00a0at 10 and 120 S. Riverside Plaza, a two-building office complex in Chicago\u2019s West Loop. The company committed to 24,000 square feet at the 1.4 million-square-foot <\/a>Class A campus.<\/p>\n\n\n\n

Coworking maintains stability<\/h2>\n\n\n\n

As of April, the Windy City’s coworking sector included more than 6.2 million square feet of coworking space, representing 1.9 percent of all leasable office space\u2014on par with the 1.8 percent national average.<\/p>\n\n\n\n

Among peer markets, Manhattan was the forefront with almost 12.7 million square feet, followed by Los Angeles (6.6 million square feet) and Washington, D.C. (6.3 million square feet).<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The metro recorded a high number of sales despite tame metrics, CommercialEdge data shows. <\/p>\n","protected":false},"author":3014,"featured_media":1004698953,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1491,21782,22251,21783,52420,13,21747],"tags":[51047,50674],"class_list":["post-1004717805","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-chicago","category-development","category-in-focus","category-investment","category-market-updates","category-midwest","category-office","tag-marketupdate","tag-commercialedge"],"acf":[],"yoast_head":"\nChicago Office Prices Lowest Among Gateway Markets - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Despite the market\u2019s slow fundamentals, year-to-date as of April, the metro logged $208 million in sales, as Chicago office prices lag.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/chicago-office-prices-lowest-among-gateway-markets\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chicago Office Prices Lowest Among Gateway Markets\" \/>\n<meta property=\"og:description\" content=\"Despite the market\u2019s slow fundamentals, year-to-date as of April, the metro logged $208 million in sales, as Chicago office prices lag.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/chicago-office-prices-lowest-among-gateway-markets\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2024-06-28T14:53:14+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-07-16T11:51:55+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/01\/353-N-Clark-St-in-Chicago.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Diana Firtea\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/chicago-office-prices-lowest-among-gateway-markets\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/chicago-office-prices-lowest-among-gateway-markets\/\",\"name\":\"Chicago Office Prices Lowest Among Gateway Markets - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/chicago-office-prices-lowest-among-gateway-markets\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/chicago-office-prices-lowest-among-gateway-markets\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/01\/353-N-Clark-St-in-Chicago.jpg\",\"datePublished\":\"2024-06-28T14:53:14+00:00\",\"dateModified\":\"2024-07-16T11:51:55+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/a0c04b9de1387474e28c9ebdb0444e59\"},\"description\":\"Despite the market\u2019s slow fundamentals, year-to-date as of April, the metro logged $208 million in sales, as Chicago office prices lag.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/chicago-office-prices-lowest-among-gateway-markets\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/chicago-office-prices-lowest-among-gateway-markets\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/chicago-office-prices-lowest-among-gateway-markets\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/01\/353-N-Clark-St-in-Chicago.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/01\/353-N-Clark-St-in-Chicago.jpg\",\"width\":800,\"height\":620,\"caption\":\"353 N. 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