Wednesday, October 17, 2007

Brother, can you wait 'til '09?

(I can also spare a dime, by the way.) The Tribune reports that Jones Lang LaSalle is agreeing with others that while landlord conditions are great right now, absorption problems are likely in 2009, and low-rise Class B and all Class A space ought to be more of a tenant's market then. So, if you can wait a while, you may be able get a relative bargain. If not, well....


Jacob Cynamon said...

The Trib is on the money here. Becuse of limited new construction in the last couple years, vacancy has dropped significantly in the central business district. By late 2009 or early 2010, there will be between 4 and 5 million square feet introduced on the northwest side of the CBD. Some premier tenants like law firm Jenner & Block have presigned leases for large blocks of space in these new buildings. There will be a "domino vacuum" effect as these large tenants move out of current high-end space, pulling tenants of progressively lower class buildings up along with them, as current higher-end buildings vacate and become more affordable to compete with the new jewels popping up along the river (353 N Clark, 300 N LaSalle, 155 N Wacker, etc.)

Responsible tenant brokers will encourage their clients, when appropriate, to hold off on moving into new space, at least not on long-term leases, until we have a better sense of what kind of savings they might gain by holding out for 1-2 more years.