Year-End Market Review & 2015 Forecast

NAI Hiffman is pleased to present its Year-End Market Review & 2015 Forecast, a detailed look at the past year in the Chicago Metropolitan industrial, office, retail, and investment real estate markets and the outlook for these markets in 2015 and beyond.
 
This year's report totals 84 full-color pages detailing:

  • Up-to-date market statistics
  • Current trends
  • Significant lease and sale transactions
  • Largest blocks of available space 
  • Hundreds of detailed charts
  • Informative maps

Download the full report here

Industrial Vacancy Down to 7.95%, 11.5 MM SF Absorbed in 2014

Chicago's industrial market experienced its 18th consecutive quarter of positive net absorption, as nearly 2.9 million SF of vacant space was removed from the market through leasing activity and user sales. Net absorption averaged more than 3.2 million SF per quarter during 2014, bringing the tally for the year to more than 11.9 million SF, down from last year's 15.8 million SF absorbed during 2014. The vacancy rate dropped 44 basis points over the course of the year to 7.95%.

Suburban Office Outperforms Downtown Office Market in 2014

Over the course of 2014, the suburban office market absorbed more than 1.8 million SF of vacant space, with 589,608 SF absorbed during fourth quarter. This activity pushed the overall vacancy rate down even further to 18.56%.
 
The downtown office market vacancy rate decreased by 57 basis points during the past year to 11.94%, the lowest rate the downtown market has seen since 2008. Net absorption remained positive, despite large vacancies being reintroduced, absorbing only 44,375 SF of vacant space during 2014.

2014's Retail Market Driven by Food and Furniture Stores

While Safeway's decision to shutter the entire 72-store Dominick's chain at the end of 2013 halted retail recovery momentum, the food store and furniture retail category fueled the majority of retail expansion within the Chicago Metropolitan area in 2014..

Office and Industrial Investment Activity Continues Improvement

Strong institutional investment in Chicago's office and industrial markets has returned over the past few years, with investors beginning to focus on non-core assets. Total industrial investment sales volume for 2014 was about $1.6 billion, while the downtown office sales volume totaled $4.08 billion in 2014 and the suburban sales volume totaled about $1.05 billion.

For further information regarding the content of these market reviews, please contact:
Brian Chandler | Research Associate
630 317 0738
bchandler@hiffman.com

If you are interested in attending a custom market overview presentation, please contact:
John R Picchiotti | Chief Operating Officer, Brokerage
630 691 0608
jpicchiotti@hiffman.com

NAI Hiffman represents ownership in two office sales totaling nearly 90,000 SF

4255 Westbrook Dr, Aurora.jpg

NAI Hiffman recently represented ownership in the REO sale of a 63,454-square-foot office building, Colonial Plaza, at 444 N Northwest Highway in Park Ridge, Illinois to Sterling Properties. Adam Johnson, Shawn Frick, Dan O’Neill, and Jason Wurtz, with NAI Hiffman, represented ownership in the transaction.

Adam Johnson and Dan O’Neill also represented the owner in the REO sale of Fox Valley Office Commons II, a 26,101-square-foot single-story office building in Aurora, Illinois. Located at 4255 Westbrook Drive, the property offers multiple small suite configurations. The property was purchased by R5 Properties.

Source: RE Journals
Mentioned in Bisnow

Year-End 2014 Market Peek

NAI Hiffman is pleased to present its Year-End 2014 Market Peek, a first look at the market statistics for the Chicago Metropolitan industrial and office real estate markets.

Industrial Vacancy Drops Below 8% for First Time Since 2001

Over the course of 2014, Chicago's industrial market absorbed an impressive 11.7 million SF of vacant space. Net absorption totaled nearly 2.9 million SF during the fourth quarter alone, outpacing the 2.2 million SF absorbed during the third quarter. 

The industrial vacancy rate improved by 44 basis points in 2014, ending the year at 7.95%, the first time vacancy has dipped below the 8% threshold since 2001, 13 years ago.

During the fourth quarter, nearly 3.5 million SF of new construction projects were completed, bringing the tally for deliveries in 2014 to just shy of 10 million SF. More than 15.5 million SF remains under construction, with more than 1 million SF underway in the Southeast Wisconsin, I-80/Joliet Corridor, I-90 Northwest, I-55 Corridor, and O'Hare submarkets.


Suburban Office Absorption Outpaces Downtown in 2014

The suburban office market absorbed more space than Chicago's downtown market during all four quarters of 2014. During the fourth quarter alone, the suburbs absorbed nearly 590,000 SF, compared to only 24,000 SF in the Central Business District. 
 
Over the course of 2014, the suburban office market absorbed just shy of 1.9 million SF of vacant space, nearly doubling the absorption recorded in the suburbs throughout all of 2013.

The suburban vacancy rate dropped by 132 basis points during 2014, ending the year with a 18.6% vacancy rate. This rate is 5.1% below the 23.7% peak rate recorded just over 4 years ago. 
 
The downtown vacancy rate ended the year at 11.9%, a 57 basis point improvement over the course of 2014, and a rate 5.1% below the peak rate recorded in mid-2010.


For further information regarding the content of this market peek or if you are interested in attending a custom market overview presentation, please contact:
 
John Picchiotti | Chief Operating Officer, Brokerage
630 691 0608
jpicchiotti@hiffman.com

Mentioned in GlobeSt and REJournals

NAI Hiffman represents EverWest Real Estate Partners in 14 transactions

NAI Hiffman represented a joint venture between EverWest Real Estate Partners & Dividend Capital Diversified Property Fund in 14 new lease and renewal transactions totaling 53,121 square feet of office space at Washington Commons in Naperville.

Strong leasing momentum has raised the property’s occupancy rate by 15% in the past year—the highest occupancy experienced at Washington Commons since the first quarter of 2007.

Bright Horizons Family Solutions, a leading provider of early education and preschools, signed the largest transaction to occupy a 16,851-square-foot space at the property. Other large leases include NVR, Inc., a homebuilding and mortgage banking firm, with a new 8,302-square-foot lease and food company, Nestle USA, with a lease renewal for its 6,121-square-foot office.

Dan O’Neill and Matt Novak, with NAI Hiffman’s office services group, represented ownership in all 14 transactions

Source: The Daily Herald Business Ledger
Also mentioned in RE Journals and Bisnow

The Davis Companies continues to grow its Chicagoland portfolio with Naperville office acquisition

The Davis Companies has completed the acquisition of Washington Pointe, a 163,623-square-foot, four-story, Class A office building situated on 15.9-acres at 535 East Diehl Road in Naperville, Illinois. Washington Pointe represents The Davis Companies’ sixth investment in the Chicagoland area since the firm entered the market in 2010.

“Washington Pointe is an asset that can perform well for its tenants,” said Duncan A.C. Gilkey, senior vice president and director of leasing for the Davis Companies. “We are confident that our plans to reinvest in the property will mirror the success we’ve had at The Crossings and Edens Corporate Center.”

In its effort to reposition Washington Pointe, The Davis Companies has selected NAI Hiffman to provide leasing and property management services and Whitney Architects to design the proposed renovations.

“The infusion of capital into this asset and addition of modern amenities will transform it into the best value alternative in the Naperville marketplace,” said Jim Adler, executive vice president with NAI Hiffman’s office services group. “With over 80,000 square feet available, our near-term goal is to effectively communicate that the new ownership is nimble, creative, and ready to make an impact. We have all the tools we need to be successful.” The NAI Hiffman leasing team will also include Dan O’Neill and Pat Kiefer.

Planned renovations for Washington Point include upgrades to the building systems, parking lot, communal areas, and current amenity base which include a fitness center and deli. 

Source: RE Journals
Also mentioned in Bisnow and The Daily Herald Business Ledger