The suburban office market is on a roll.
The vacancy rate in the 78.8 million-square-foot market fell to 12.9 percent in the second quarter, the lowest level since 1979, when CB Commercial Real Estate Group began publishing market data.
The vacancy rate is down 3.5 points since mid-1994.
“Demand is up and supply is down, especially in the Class A sector. That’s the classic equation to justify new product introduction,” said Jeffrey Barrett, senior vice president of CB Commercial.
He believes the stage is set for a major upswing in speculative construction.
The Class A sector of the market has completely recovered, according to Barrett, especially in the west suburban corridor where the vacancy rate has dropped below 5 percent.
Net absorption during the second quarter of 1.2 million square feet was the highest level for a quarter since late 1988, and pushed the first half total to 1.6 million square feet, up from 1994 when the net amount of space leased during the first six months was 1 million square feet.
Since June of last year, the vacancy rate in suburban Class A office buildings has dropped to 9.1 percent from 12.6 percent, according to the report.
During the same period, vacancies in Class B buildings have decreased to 13.6 percent from 17.1 percent, and in Class C properties to 17.8 percent from 21.1 percent.
Loyola: Thanks a billion
Loyola University Chicago produced a $1.04 billion economic impact on the Chicago area last year, according to a recently released study.
Loyola created or sustained nearly 15,000 jobs and bolstered key industries, such as construction, retail, and service, and generated over $200 million in local, state, and federal taxes, according to the study.
Construction contributed $60 million in fiscal year 1994, including $47 million for the new high-rise learning center at the Water Tower Campus, just west of Michigan Avenue, according to Father John J. Pederit, president of Loyola.
The study notes that 57 percent of Loyola’s $220 million in construction expenditures since 1975 have occurred since 1990, a total of $155 million over four years.
Chicago would have to stage more than 10 Taste of Chicago food festivals to equal the Loyola contribution to the economy, the university estimates.
“Our economic impact is a wonderful by-product of all that we do in higher education and health care,” Piderit said.
The study by INFO-SERV/Information & Research Service Inc. of Milwaukee reviewed the dollar impact of Loyola’s four Chicago area campuses. Besides the Water Tower Campus, they include the Lake Shore Campus in Rogers Park, the Mallinckrodt Campus in Wilmette and Loyola University Medical Center in Maywood. Loyola also has a campus in Rome.
With nearly 10,000 employees, Loyola is Chicago’s 15th-largest private employer. It has more than 13,600 students.
New in Libertyville
Construction is underway on a 212,000-square-foot industrial building at Libertyville Business Park, on the east side of U.S. Highway 45, south of Winchester Road, Libertyville.
Developed by Industrial Building & Development Co. of Northbrook, the structure will accommodate a variety of uses-from warehouse/distribution to manufacturing, assembly and offices.
Completion is expected in the fourth quarter.
– The future site of the $35 million Harry and Jeanette Weinberg Community for Senior Living will be on a 10-acre site in the Arbor Lake development between Lake Cook Road and the Tri-State Tollway spur in Deerfield.
Construction is slated to begin in late 1995 and take 18 months. Planned by the Jewish Federation of Metropolitan Chicago and the Council for Jewish Elderly, the complex will include a six-floor apartment building for independent living with 125 one- and two-bedroom units.
Another facility is designed for 35 people with Alzheimer’s or other cognitive impairments.
Sales and leases
– The former 423,000-square-foot Wilson Jones facility at 6150 W. Touhy Ave., Niles, has been sold and demolished to make way for two new retailers, Target Greatland Store and Builder’s Square, totaling 250,000 square feet.
Paine/Wetzel Associates Inc. represented the seller of the 23-acre commercial property, Northwestern Mutual Life Insurance Co. The asking price was $12 million. Tanguay-Burke-Stratton represented the buyer.
In order to facilitate the sale, the property was rezoned and tax increment financing was obtained.
– Claire’s Boutiques has purchased a 247,000-square-foot building at 2400 W. Central Rd., Hoffman Estates. Frain Camins & Swartchild represented the building’s seller, Pfizer Inc.
– American Trans Air has chosen CitiCorp Plaza as the permanent home for its Chicago reservations center. The Indianapolis-based airline has signed a 10-year lease to occupy an entire floor at CitiCorp Plaza, the three-building, 600,000-square-foot office complex owned and managed by Romanek Properties Ltd. CitiCorp Plaza, near O’Hare International Airport, is on Bryn Mawr Avenue. ATA’s new space, totaling 18,752 square feet, will house the reservations center that has been temporarily housed in Oakbrook Terrace for the last two years.
– The former Northern Telecom facility at 6201 Oakton St., Morton Grove, has been purchased by U.S. Robotics, headquartered in Skokie, according to Paine/Wetzel Associates Inc.
Built in the 1960s, the 302,000-square-foot building on a 23-acre site will be used for the manufacture of computer modems.
CB Commercial represented the buyer. The asking price was $8.5 million.
– Sanyo North American Corp., based in San Diego, has purchased a 300,000-square-foot high-cube warehousing facility in Crossroads Distribution Center, a 150-acre business park in Bolingbrook, according to CB Commercial Real Estate Group.
– Duraco Products Inc. has leased the 142,005-square-foot facility at 600 Industrial Dr., St. Charles, from a private trust.
Duraco will use the property to store and distribute plastic flower pots, containers, and related products. Binswanger represented the trust, and Grubb & Ellis represented the tenant.
– W.W. Grainger Inc., a distributor of industrial and commercial equipment, is establishing a 250,000-square-foot distribution center in Carol Point Industrial Park, Carol Stream, according to Koll/Rubloff Industrial Group.
The facility, on an 18-acre site, has 41 exterior docks. Opus is the developer and was represented by Colliers, Bennett & Kahnweiler.
The seller, UPS Properties, Atlanta, was represented by Frain Camins & Swartchild.
– BT Publix Office Products Inc. has leased 67,182 square feet in the 165,220-square-foot building at 1840 N. Marcey, Chicago. Edward E. Kellman & Co. representesd the owner and Grubb & Ellis represented the lessor.
– Over 135,000 square feet of lease renewals and expansions have been completed at Madison Plaza, 200 W. Madison St., according to Miglin-Beitler Management Corp.
Towers Perrin Inc. renewed 80,000 square feet. LaSalle Partners represented the tenant.
Canadian Imperial Bank of Commerce renewed 22,146 square feet. Goldie Wolfe & Co. represented the tenant.
Other renewals and expansions include Classic Residence Management, 14,544 square feet; Ferguson Partners Ltd., 10,132 square feet; Sprint Communications Co., 7,522 square feet; and Sullivan, Cotter & Associates Inc., 2,119 square feet.
– Firstar Bank of Milwaukee, N.A., said it chose Miglin-Beitler Management Wisconsin as facilities manager for 32 of its Wisconsin retail banking locations. The buildings total 230,000 squre feet and are located in Kenosha, Racine and Walworth counties.
