I 'm thinking of the recent artiel by David Roeder, I believe, "Towering Contradiction" -- talking about the boom in office construction at a time when office vacancies are at high levels ( I believe about 13% in the city, and as high as 25% in the I-88 corrider, due to the foundering of Lucent mainly, I think)
How healthy is this situation? Would it be preferable to have less contruction so that net absorption could catch up ? The relatively high vacancy rate does seem to have positive aspects. Since it creates a renters' market, and renters by definition have more of a Chicago presence than office building owners, this would seem to be good for Chicago. Chicago firms, such as Exelon, are going to get great leasing deals. Many of the foreign or otherwise out-of-town REITS and other firms that own the buildings will be reaping fewer profits in this way.
Also, if Chicago's leasing rates are lower than other cities, this could attract more companies to establish branch offices here. (How do Chicago's vacancy rates compare to other metro areas? I have heard that Washington, D.C. market is really tight. Is the Bay area still in the 20s in vacancy as it was after the tech bubble burst?)
Thoughts..?> |
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