LEASING DECLINES
Larger tenants remained active, keeping deal volume strong. Tenants leased 2.3 million square feet (msf) during the third quarter, down from the 3.2 msf leased in the second quarter, but matched the long-term average of 2.3 msf. Tenants have leased 12.1 msf in the four most recent quarters, exceeding the long-term market average by 25.3%.
AVAILABILITY RISES
Following a slight decline in the second quarter, the overall availability rate jumped by 140 basis points to 16.9% in the third quarter. The Class A rate also spiked, jumping by 240 basis points to 17.9%.
RENT DOWN SLIGHTLY
The Class A gross asking rent inched down by 0.7% to $44.65. The overall Downtown asking rent fell by 1.0% from $40.10 to $39.60.
SALES UP
Office property sales during the first seven months of the year totaled $4 billion, a 73% increase compared to the first eight months of 2017.
“Sustained expansion among tech and creative sector firms continues to drive the rapid transformation of new areas, with Fulton Market experiencing a flurry of new development. The lack of existing big blocks in emerging districts has driven some large tenants, including Facebook and Walgreens, into new West Loop developments.”
Lisa Davidson, Executive Vice President