Savills Studley Report Shows Leasing and Sales Spikes in Chicago

Savills Studley today reported that it completed 49 transactions, totaling 1,353,151 square feet, in Chicago’s central business district (CBD) and surrounding suburbs in the last quarter of 2018. Tenants’ preference for newly developed space played a major role in the volume of projects completed, according to the firm’s Q4 findings.

“Development activity has intensified in downtown Chicago. Tenants continue to make aggressive moves to secure new, best-in-class product as they strive to maintain growth and attract top talent,” said Eric Feinberg, executive vice president, co-head Chicago region.

Tenants leased nearly 13 million square feet in the CBD in 2018, eclipsing the 2017 tally of 10.5 million. Also, offices property sales increased significantly last year in Chicago and the suburbs, spiking to $3.2 billion (69%) and $4.8 billion (71%), respectively, by November. Savills Studley notably represented medical supplies manufacturer Medline Industries, Inc., in the sale of its 340,000-square-foot building at 90 Half Day Road in Lincolnshire.

“Landlords are incentivizing new tenants and adding amenities to their buildings to keep existing occupants,” said Robert Sevim, vice chairman, co-head Chicago region. “While some submarkets and micro-markets with more updated building product, strong amenities and prime locations are exhibiting better fundamentals, the suburban prices remain extremely affordable and net effective rents are near zero in some cases.”

Corporate relocations from suburban areas to urban settings have created a window of opportunity for tenants seeking reasonably priced spaces. Jon Azulay, Joe Learner and Sevim arranged a 103,115-square-foot lease at 2355 Waukegan Road in Bannockburn on behalf of Stericycle. Sevim also represented EN Engineering LLC with John Goodman to renew the consulting firm’s 79,830-square-foot lease at 28100 Torch Parkway in Warrenville – one of the largest deals completed in the Chicago suburbs in Q4.

Additional noteworthy leases from Q4 completed by the firm’s Chicago office are below:

• Brinks Gilson & Lione – 78,081 sq. ft. at 455 N. Cityfront Plaza Drive in Chicago – represented by Adam Southard, Learner and Sevim
• Benesch Friedlander Coplan & Aronoff LLP – 63,749 sq. ft. at 71 S. Wacker Drive in Chicago – represented by Learner and Sevim
• Willow Creek Community Church, Inc. – 46,907 sq. ft. at 625 Barclay Blvd. in Lincolnshire – represented by John Conerty
• Intelligent Medical Objects – 43,874 sq. ft. at 9500 W. Bryn Mawr Ave. in Rosemont – represented by Azulay, Sevim and Southard