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    BIG TURNAROUND FOR CRE

    Commercial real estate saw a significant turnaround in Chicago in 2014. The national unemployment rate fell precipitously from 6.6% in January to 5.6% by the end of December. Chicago’s metro saw a slighter slower employment recovery over this period, but the resulting new business saw a total of over 1.25 million square feet of absorption in the CBD by year end. Direct vacancy downtown fell from 14.5% to 13.6%. The forecast is decidedly positive going into 2015 as demand for space continues to grow.
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    SURPRISINGLY PRODUCTIVE YEAR

    The suburban Chicago office market had a surprisingly productive year ending with a total of 1.33 million square feet absorbed. What many had chalked up to a market in perpetual decline, after talk of downtown migration and the end of suburban campuses, has shown signs of life and benefited from the overall recovery of the post-recession economy in concert with the CBD.
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    HIGH TAXES SWUNG TOWARDS COMMERICAL REAL ESTATE

    The burden of Cook County’s historically high taxes has swung dramatically toward commercial property in the last decade plus. Now, with Illinois facing a looming pension crisis, that tax weight could be compounded.
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    SPREAD COMPRESSION FALLS BELOW 3%

    Index vacancy remained stable under 11% while overall vacancy continued to fall, driving the spread to under 3% for the first time since the recession. Some of the most significant deals signed in the first quarter of 2015 were at the new developments at 444 W. Lake and 150 N. Riverside. Index vacancy spread compression is expected to continue through 2015.
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CHICAGO MARKET OVERVIEW

The Chicago Market Overview is a comprehensive quarterly report on the CBD and the Suburban office market conditions. The MB Real Estate Research team combines detailed data with timely insight to guide clients on the market’s outlook.

2014 4th Quarter Chicago Market Overview & Snapshots

2014 4th Quarter Chicago Suburban Market Overview

CORE NATIONAL MARKET OVERVIEW

Additionally, MB Real Estate Research contributes to and com- piles the CORE National Market Overview, a detailed summary of national and network city office market conditions.

MARKETBEAT

On months between quarter-end, the Research team publishes the MB Real Estate MarketBeat. It alternates between analysis of a developing trend in the market and of the MB Real Estate Index, a leading indicator vacancy index based on the last thirty buildings constructed in Chicago’s CBD.

March 2015
- Spread Compression Falls Below 3%

December 2014
- Index Vacancy Has Remained Stable While Overall Vacancy Has Continued to Compress

ADDITIONAL INFORMATION

Please contact
Kristy Wenz at KWenz@mbres.com for past issues of the MBRE Chicago Market Overview, MarketBeat, or the CORE National Market Overview, as well as for additional MBRE Research Information.