Chicago’s commercial real estate market strongest its been in years

All of those tall buildings in downtown Chicago are gaining more tenants than they have in years.

Things are looking up for Chicago's commercial real estate companies. According to the 2013 second quarter Commercial Real Estate Market survey from the National Association of Realtors, most of the measurements for the industry's health in the Chicago area are strong. On top of that, there is a lot of recent movement that would portend continued improvement in the market going forward.

NAR report spells good news for Chicago market
The NAR's report was chock full of numbers that should make commercial real estate brokers in the Chicago-area very happy. Sales were up 12 percent compared to the second quarter of 2012, with office buildings, retail spaces, medical complexes and multi-family apartment buildings all doing well.

On top of the increased activity, sales and rental prices were both up 2 percent compared to last year. Vacancy rates were also down, falling to 9.1 percent in the second quarter after registering at 9.5 percent in the first. Industrial property also fared well, with 3.7 million square-feet leased in the second quarter at an average price of $5.06 per square-foot.

"The market is stabilizing," said Kamlesh Shah, CCIM, managing broker of RE/MAX Preferred Properties in Addison, Ill. "Consumer confidence is up, and commercial banks and other lenders are more flexible. Because of this, we have more inquiries about commercial properties. Things are definitely looking brighter in the commercial real estate sector."

More movement ahead
Commercial real estate agents are seeing quicker turnaround on the properties they are representing, and are also noting a lot of movement for multi-family buildings. But it's movement by bigger companies that is causing the most waves.

AT&T is moving its 3,000 Northern Illinois employees around, shifting them from the companies Hoffman Estates, Ill., building to facilities all around the Chicago-area, including the city itself, Shaumburg (which will gain the most people), Lisle and Arlington Heights.

The Merchandise Mart in downtown Chicago is also set to welcome a new tenant. GoHealth LLC is on the verge of signing a new deal to lease 90,000 square-feet in the Mart, as part of the company's expansion plans. Expecting to add 600 employees by December, GoHealth will retain its three other downtown locations, and use the new space to house its growing business.

Between the encouraging numbers from NAR and all of the action being seen from larger companies on the move in the area, Chicago's commercial real estate market is in the midst of its biggest expansion since the recession.

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