Illinois Real Estate Journal October 2013 : Cover

VOL.16 NO.5 ©2013 LAW BULLETIN PUBLISHING CO. OCTOBER 2013 DIRECTORIES: Space Planning & Interior Design, Real Estate Law Firms, Green Sustainable, Top Brokerage Firms, p.24 Metro Chicago Office Market Posts Mixed Results In Third Quarter By Brian Wasag T Investor Demand For Retail Assets Rises hicago’s retail market will improve further in 2013 as healthy job creation supports another year of strong consumer spending, accord-ing to a retail market research report from Marcus & Millichap Real Estate Investment Services. Metrowide, build-to-suit projects and pre-leased shopping centers dominate the development pipeline, which will drive a sizable share of new demand into existing shopping centers, according to Marcus & Mil-lichap. In-city centers stand to post the most improvement this year as pay-rolls in the typically higher-paying professional and business services sector return to their previous peak level, and the delivery of more than While the suburbs have lagged in the recovery cycle, vacancies in well-located centers have started to capture the interest of expanding retailers, particularly chains special-izing in home-related goods, accord-ing to Marcus & Millichap. “I think that for suburban down-town retail, if you’re on a major shopping street in the downtown, you’re having good luck, but if you’re off the main street of a downtown, you’ve got a problem,” Hochberg said. Marcus & Millichap also predicts that investor demand for Chicago retail properties will remain elevated this year as job creation continues at a healthy pace and recovery in the housing market strengthens. Trans-action velocity, however, will hold fairly stable as better-quality listings remain in short supply. “People aren’t building until they have commitments from the tenants and there’s a flight to quality,” said Keely Polczynski, vice president at RETAIL FEATURE (continued on page 10) C By Brian Wasag 3,300 luxury apartments lures afflu-ent renters to the area, the report states. Marcus & Millichap also points out that the anticipated influx of new residents to the city has prompted expansion among grocers. Maria-no’s recently signed on to anchor a new retail center in Oak Lawn and Wal-Mart is under way on a Neigh-borhood Market at 47th Street and Cottage Grove. “I’d say that there is some natural growth in the market and there is not a lot of new supply,” said Andrew Hochberg, CEO, managing principal and managing broker at Next Realty. “Supply got absorbed over the last year or so and some new properties opened, mostly in the grocery sec-tor.” he metro Chicago office market experienced mixed performance in the third quarter, with the CBD outperforming the suburbs, accord-ing to a Chicago office market report by Transwest-ern and its research affiliate, Delta Associates. The overall vacancy rate in Chicago’s CBD de-clined to 11.6 percent in the third quarter of 2013, down slightly from a revised 11.7 percent at mid-year, but up from 11.4 percent a year ago, according to Transwestern. This compares to a cyclical high of 14.1 percent in the third quarter of 2010. Transwest-ern expects vacancy to edge downward through the fourth quarter of 2013 and into 2014, in concert with steady job growth and renewed interest from poten-tial tenants looking to take advantage of relatively low rental rates. Transwestern notes that the direct vacancy rate in the CBD declined to 10.8 percent at third quarter OFFICE FEATURE (continued on page 7) PRSRT STD U.S. Postage PAID TWIN CITIES, MN PERMIT NO. 31515

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