Sublease & Disposition Proposal for Vyaire
Office Q1 2021 CHICAGO SUB
1 2 3 There is no doubt the activity in the Mettawa submarket has been slow to respond and summer months historically don’t see an uptick, so we anticipate activity not to pick up until 4Q 2021. The landlords are now recognizing they need to be more competitive TRENDS
MARKET OVERVIEW
EC Tot by Feb pro (+4 7,0 has DE De to d vie squ tran 35, abs Inn We abs SU Ov spa ms sig vac inc
12-Mo. Forecast
YoY Chg
24.1% VacancyRate -690,586 YTD Net Absorption,SF $24.51 Asking Rent, PSF
SUBURBAN CHICAGO
Despite gradual signs of improvement in the Chicago metro area labor market, new leasing activity in the suburban market continued to decline and totaled 442,837 square feet (sf) at the end of Q1—a 33.6% decline quarter-over-quarter (QOQ). Taking a broader view, new leasing activity dropped 71.8% year-over-year (YOY) and stands well below its five-year quarterly average of 1.2 million square feet (msf). Renewals accounted for 21.2% of total leasing activity in Q1 2021, up from 7.3% in Q1 2020. The suburban office market ended the first quarter of 2021 with 690,586 sf of negative absorption, marking the third consecutive quarter of negative absorption, except the North corridor which recorded 70,421 sf of positive absorption due to a surge in leasing activity during Q4 2020. absorption. All submarket clusters reported negative
There is currently 4 million square feet of sublease space on the market and we anticipate this number will continue to increase as occupiers are formulating workplace strategy plans that incorporate further reductions to their footprint.
(Overall, All Property Classes)
ECONOMIC INDICATORS Q1 2021
12-Mo. Forecast
YoY Chg
3.5M Chicago Employment
8.8% Chicago Unemployment Rate 6.0% U.S. Unemployment Rate
SP
with direct lease space in order to compete with the onslaught of sublease space. As a result, the direct lease space this past quarter has continued to decline and landlords are increasing concession packages.
60 1,20
Source: BLS, Moody’s Analytics 2021Q1 data are based on latest available data
-3,00 -2,40 -1,80 -1,20 -60
Thousands
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