April 8, 2020
Aside from suburban office, where vacancies increased 10 basis points, the Chicago office market began 2020 strong, says NKF. For instance, CBD vacancies fell 30 bps to 13.4% in the first quarter, after the Q4 2019 delivery of the Old Post Office caused an uptick.
Then things changed. “All of the strong activity the commercial real estate world has been experiencing for the past several years came to a halt at the end of the first quarter, as the novel coronavirus that causes COVID-19 arrived in the U.S.,” write NKF’s Amy Binstein and Eris Geskermann.
That being the case, Binstein and Geskermann expect “a modest recovery time” for CRE, and a tight labor market should mean only a slight increase in office vacancies. “Where we might see significant changes is in the types of office space as tenants push back even more against open floor plans and tight co-working spaces.”
Pictured: 333 N. Green St. in the Fulton Market District.
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