The downtown Chicago office market posted another strong quarter, with vacancies falling a full percentage point to 13.9 percent as of Sept. 30, CB Commercial Real Estate Group reports.
Leasing activity, running at its best pace since 1990, is contributing to the vacancy decline, with 1.6 million square feet of office space being taken off the market so far this year, up from 1.4 million feet in all of 1996.
CB analysts say the continuing demand for downtown space remains strongest in top-flight buildings, but that activity is beginning to spill down even into Class B properties.
The oldest and least desirable office buildings continue to struggle, however, even though vacancies declined slightly. All of that decline was attributable to the removal of several properties from the market as conversions to residential or other adaptive re-uses.
In the suburbs, office vacancies also maintained their downward march, reaching 10.1 percent–the lowest point on record in CB Commercial’s tracking. The suburban vacancy rate topped out at 21 percent in 1990.
Still lofty
Think the loft boom in Chicago has to be losing its steam? Think again.
The latest and largest new project to hit the streets, Randolph Place, opened recently to spectacular demand, with developer MCZ Development taking deposits on 110 of the planned units in the first two days of sales.
Michael Lerner, head of MCZ, plans to put 270 loft condominiums in the former One North Western Center building, a 1 million-square-foot property built in 1922 at 165 N. Canal St. Prices in the project range from $119,800 to $449,800. Many of the more expensive units were among the best sellers in the opening weekend, Lerner said.
The biggest draws for early buyers? Views of the Chicago skyline and proximity to jobs in the Loop.
In a similar successful opening, Fifield Realty reported that it sold more than 40 percent of the 126 condominiums available in Phase 1 of its Gotham Lofts at 400 S. Clinton St.
Steven Fifield, president of Fifield Realty, said young professionals with jobs in the Loop were the majority of the early buyers. Prices for the one- and two-bedroom lofts in the preconstruction period for Phase 1 range from $89,900 to $179,900.
High fliers
Kenny Construction Co. has been appointed construction manager for the $500 million Midway Airport terminal development program.
Starting later this year, the project will begin preparatory work for the replacement of the existing terminal with a modern, full-service facility that will be able to accommodate the 18 million passengers predicted to traverse the airport each year.
The new terminal, which will be built without affecting airport operations, will house 38 gates and will be about three times the size of the current facility.
The project also includes a reconfiguration of Cicero Avenue around the airport entrance, construction of a six-story parking garage, creation of new concourses west of Cicero and a redevelopment of the airport’s existing apron.
The project is expected to take seven years to complete.
Fitness buffs
HealthTech International Inc., the Mesa., Ariz-based builder and operator of health care centers with fitness clubs, has purchased Governors Plaza Shopping Center in south suburban Richton Park and will open its first Chicago area location in 80,000 vacant square feet in the project.
CB Commercial Real Estate Group, which advised HealthTech in the transaction, said the center at Governors Highway and Sauk Trail opened in the 1970s with Zayre as an anchor. The vacant space formerly was an Ames department store.
The seller was an Indiana corporation. No purchase price was disclosed.
Logistical expansion
Exel Logistics Inc. has acquired a 50-acre parcel in the Butterfield Center for Business in Aurora and will lease a 900,000-square-foot warehouse/distribution facility to be built for the company on the site.
Arthur J. Rogers & Co., which represented the firm, said the first 550,000 square feet of the project are expected to be ready by December. A second phase of 350,000 feet will be used to accommodate Exel’s anticipated growth.
Sporting proposition
Galyan’s Trading Co., the upscale sports superstore concept being rolled out by The Limited, has leased 170,000 square feet for its first Chicago area store at One Schaumburg Place at Higgins and Martingale Roads in the northwest suburb.
Galyan’s will replace Montgomery Wards, the original anchor tenant in the project. The store, which will include a 70-foot climbing wall as a place to test-drive some of the goods, will open in the spring of next year.
Deal of the week
In the largest suburb-to-city transition in at least a year and a half, the architectural firm of O’Donnell Wicklund Pigozzi and Peterson Architects has consodilated its Deerfield and Chicago operations into 59,000 square feet at Burnham Center, 111 W. Washington St.
The move will affect 100 suburban employees. Executives for the company said a year-long strategic planning process led them to decide on the Loop consolidation in order to better serve clients throughout the metro area and to better meet its personnel recruiting needs.
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Chicago Tribune real estate editor Steve Kerch reviews realty news and answers your questions on housing and other topics on The Real Estate Show every Friday from 9:40 to 10 a.m. on Channel 26-WCIU.
