You take your good news where you can get it. And for the Chicago suburban office market? That good news came in the fourth quarter of last year, when the sector saw positive absorption for the first time since the second quarter of 2022.
According to CBRE‘s fourth-quarter market overview, the fourth quarter of 2023 saw 12,877 square feet of positive absorption in the Chicago suburban office market.
That’s a positive. But here’s a dose of reality: The Chicago suburban office sector still ended 2023 with negative absorption. CBRE reported that last year ended with a net negative absorption of more than 1.18 million square feet of office space in the Chicago suburbs.
This doesn’t mean that there weren’t notable office deals in Chicago’s suburbs. ACE Hardware, for instance, took over the 2917,128-square-foot former McDonald’s headquarters in suburban Oak Brook. And Nagase Holdings moved into 48,472 square feet at 300 Park Blvd. in Itasca. Hartford Fire Insurance moved into 42,895 square feet att 1415 W. Diehl in Naperville.
Suburban office vacancy rates? They held steady, ending the fourth quarter of last year at an average of 25.9%, according to CBRE.
One of the major trends in the Chicago suburban office market remaind the flight to quality. As CBRE says, many tenants are downsizing their office footprints and moving to more amenitized spaces. That is reflected in Class-A absorption of 337,694 square feet in the Chicago suburbs in the fourth quarter.
Meanwhile, Class-B office space absorption in the same market fell to negative 332,286 square feet in the fourth quarter of last year.
CBRE reported that the four largest suburban Chicago office moves of the fourth quarter were moves from Class-B space to Class-A office, more evidence of a flight to quality in this sector.
Suburban Chicago office sales activity did reach more than $1 billion for 2023, led by the former Sears campus in Hoffman Estates — a sale of $194 million — being sold for conversion to data center space.
Other big Chicago suburban office sales last year include the $60 million sale of Oakbrook Terrace Tower in Oakbrook Terrace and the $59 million sale of 21440 Lake Cook Road in Deer Park, Illinois.
