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Metro: Chicago Submarket: City West
Office
Powered by Reis, inc.
Submarket Analysis
Submarket Analysis (Monthly Data)
Prepared by Jim Stein (312-555-1212)
Office - November, 2013
Powered by ReisReports. Clearly Objective.
Submarket: City West
Section 1 - Executive Briefing on Submarket Conditions
Average Asking Rent $19.71
Average Vacancy Rate 13.9%
●
Up 0.8% from Q2 2013.
●
Down 60 basis points from Q2 2013.
●
Expected to finish 2013 at $19.76.
●
Lowest level since Q1 2009.
●
Expected to finish 2013 at 13.1%.
Submarket Overview
With 3.7 million square feet, amounting to 1.5% of the total metro inventory, the City West submarket is the second
smallest of the thirteen geographic Chicago submarkets identified by Reis's researchers, larger only than City North. In
the ten-year period since Q3 2003, new additions to the submarket have totaled 529,000 square feet, while 268,000
square feet have been removed by developer activity. The net total gain of 261,000 square feet equates to an
annualized inventory growth rate of 0.7%, exceeding the metro growth rate of 0.3% over the same period.
Asking and Effective Rent
During the third quarter of 2013, asking rents increased by 0.8% to an average of $19.71, higher than only the
Southwest submarket's $18.50. Over the past four quarters, asking rents have risen a total of 0.9%, up from $19.53.
The City West submarket's current asking rent levels are lower than the Chicago metro average of $27.98, while asking
rent growth in the current quarter compares favorably to the metro average of 0.1%. Effective rents, which exclude the
value of concessions offered to prospective tenants, climbed by 0.9% during the third quarter to an average of $15.85.
Competitive Inventory, Employment, Absorption
Total employment in the Chicago MSA grew by 35,700 jobs during the third quarter, while in the dominant office-using
industries, employment grew by 11,400. Quarterly movement in the average occupancy level of competitive office
square footage rarely mirrors the period's total employment gains or losses, but it is advisable to weigh longer-term
economic and demographic trends as factors contributing to current demand. Since Q3 2003, the average growth rate
for office-using employment in Chicago has been 0.3% per year, representing the average annual addition of 4,200
jobs. Over the same time period, the metro posted an average annual absorption rate of 583,300 square feet. During
the third quarter, metropolitan absorption totaled negative 413,000 square feet. In the City West submarket, however,
new renters took a net total of 22,000 square feet off of the market. Over the last four quarters, office absorption totaled
62,000 square feet, 12.3% less than the average annual absorption rate in the submarket of 70,700 square feet
recorded since Q3 2003. The submarket's average vacancy rate declined by 60 basis points to 13.9% during the
quarter, which is 3.1 percentage points lower than the long-term average, and 4.8 percentage points lower than the
current metro average.
Page 3
Copyright 2014
Reis Services, LLC
This report has been generated for the exclusive use of Justin Peterson of Reis
The use, distribution and display of this report and any of the information contained herein are subject to the Terms and Conditions at ReisReports.com.
Submarket Analysis (Monthly Data)
Prepared by Jim Stein (312-555-1212)
Office - November, 2013
Powered by ReisReports. Clearly Objective.
Submarket: City West
Section 2 - Current Submarket Rent Details
Asking Rent by Age
Low
25%
Mean
Median
75%
High
Low
25%
Mean
Median
75%
High
$19.49
$11.43
$16.37
$19.69
$20.24
$21.92
$32.21
- 4.7%
0.3%
0.4%
0.3%
0.3%
2.1%
1970-1979
n/a
1980-1989
$21.25
1990-1999
$21.98
2000-2009
$19.04
After 2009
$24.03
All
$19.69
18
As of November 30, 2013
53
Number of Properties
Before 1970
Asking Rent Growth Rate Distribution
Rent
Number of Properties
Year Built
Asking Rent Distribution
13
11
9
9
4
1
0
Under $14.04 $16.64 $19.24 $21.84 $24.44 $27.04 $29.64
$14.03 $16.63 $19.23 $21.83 $24.43 $27.03 $29.63 Over
8
3
0
0
0
0
1
Under - 4.0% - 3.2% - 2.4% - 1.6% - 0.8% 0.0%
- 4.1% - 3.3% - 2.5% - 1.7% - 0.9% - 0.1% 0.7%
Negative Growth
4
0.8%
Over
Positive Growth
As of November 30, 2013
61
90 days ending November 30, 2013
Section 3 - Rent Growth Comparisons
Asking Rent Growth
3Q13
City West
Chicago
Midwest
United States
Period Ending:
Submarket Ranking
Quarterly
Annualized
2Q13
3 Year
5 Year
3Q13
2Q13
0.4%
0.6%
0.4%
0.8%
0.6%
1.0%
0.5%
0.0%
N/A
N/A
1
13
YTD Avg 1 Year
0.8% - 0.2% - 0.2%
- 0.1% 0.4% 0.2%
0.0% 0.2% 0.2%
0.3% 0.4% 0.5%
3.3%
2.2%
1.5%
1.8%
09/30/13 06/30/13 09/30/13 12/31/12 12/31/12 12/31/12
3
93
29
565
09/30/13
06/30/13
* of 13 metro level submarkets
** of 103 regional submarkets
*** of 631 U.S. submarkets
Monthly Asking Rent Growth Rate Trends
0.5%
0.0%
-0.5%
-1.0%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
City West 0.1% 0.0% 0.1% 0.1% -0.1% 0.2% 0.3% 0.3% 0.8% 0.1% 0.7% 0.8% 0.1% -1.3% -0.1% -0.2% 0.1% -0.1% 0.3% 0.1% 0.5% 0.0% -0.1%
Chicago 0.1% 0.2% 0.3% 0.1% 0.0% -0.1% 0.0% 0.0% -0.1% 0.1% 0.9% 0.7% 0.0% 0.2% 0.0% 0.0% 0.0% 0.3% -0.1% 0.0% 0.0% 0.2% 0.2%
Midwest 0.1% 0.1% 0.2% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% 0.5% 0.0% 0.2% 0.1% 0.1% 0.0% 0.2% 0.0% 0.0% 0.0% 0.1% 0.1%
United States 0.1% 0.2% 0.2% 0.1% 0.0% 0.1% 0.1% 0.0% 0.1% 0.1% 0.4% 0.3% 0.0% 0.4% 0.2% 0.1% 0.0% 0.3% 0.0% 0.0% 0.3% 0.1% 0.3%
2012
City West
2013
Chicago
Midwest
US
As of November 30, 2013
Page 4
Copyright 2014
Reis Services, LLC
This report has been generated for the exclusive use of Justin Peterson of Reis
The use, distribution and display of this report and any of the information contained herein are subject to the Terms and Conditions at ReisReports.com.
Submarket Analysis (Monthly Data)
Prepared by Jim Stein (312-555-1212)
Office - November, 2013
Powered by ReisReports. Clearly Objective.
Submarket: City West
Section 4 - Current Submarket Vacancy Details
Vacancy Rate By Age
Vac. Rate
Low
25%
Mean
Median
75%
High
17.1%
0.0%
0.0%
13.5%
7.1%
20.8%
53.7%
1970-1979
n/a
1980-1989
9.7%
1990-1999
4.2%
2000-2009
5.0%
After 2009
0.0%
All
27
Number of Properties
Year Built
Before 1970
Vacancy Rate Distribution
13.5%
As of November 30, 2013
11
8
6
3
3
4
3
Under 5.1% 10.1% 15.1% 20.1% 25.1% 30.1% 35.1%
5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Over
As of November 30, 2013
Section 5 - Vacancy Rate Comparisons
Vacancy Rates
Quarterly
City West
Chicago
Midwest
United States
Period Ending:
3Q13
2Q13
13.9%
18.7%
19.6%
16.9%
14.5%
18.5%
19.6%
17.0%
Submarket Ranking
Annualized
YTD Avg 1 Year
14.5%
18.5%
19.6%
17.0%
16.2%
18.6%
19.7%
17.3%
3 Year
5 Year
3Q13
2Q13
15.8%
18.5%
19.7%
17.3%
13.3%
17.6%
18.8%
16.1%
N/A
N/A
09/30/13 06/30/13 09/30/13 12/31/12 12/31/12 12/31/12
4
4
15
18
157
174
09/30/13
06/30/13
* of 13 metro level submarkets
** of 103 regional submarkets
*** of 631 U.S. submarkets
Monthly Metro Vacancy Rate Trends
18.0%
16.0%
14.0%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
City West 17.8% 17.6% 17.6% 16.9% 16.8% 16.3% 15.9% 15.6% 15.6% 15.5% 15.3% 15.2% 15.3% 15.1% 15.0% 14.9% 15.0% 14.5% 14.0% 14.0% 13.9% 13.6% 13.5%
Chicago 18.6% 18.7% 18.8% 18.7% 18.7% 18.7% 18.7% 18.6% 18.7% 18.6% 18.5% 18.5% 18.4% 18.4% 18.5% 18.5% 18.5% 18.5% 18.5% 18.6% 18.7% 18.7% 18.6%
Midwest 19.8% 19.8% 19.8% 19.7% 19.8% 19.7% 19.7% 19.6% 19.6% 19.6% 19.6% 19.6% 19.6% 19.6% 19.6% 19.6% 19.6% 19.6% 19.5% 19.5% 19.6% 19.7% 19.6%
United States 17.4% 17.3% 17.3% 17.3% 17.3% 17.3% 17.2% 17.2% 17.2% 17.2% 17.1% 17.1% 17.1% 17.1% 17.0% 17.0% 17.0% 17.0% 17.0% 16.9% 16.9% 16.9% 16.9%
2012
City West
2013
Chicago
Midwest
US
As of November 30, 2013
Page 5
Copyright 2014
Reis Services, LLC
This report has been generated for the exclusive use of Justin Peterson of Reis
The use, distribution and display of this report and any of the information contained herein are subject to the Terms and Conditions at ReisReports.com.
Submarket Analysis (Monthly Data)
Prepared by Jim Stein (312-555-1212)
Office - November, 2013
Powered by ReisReports. Clearly Objective.
Submarket: City West
Section 6 - Submarket Inventory Details
Inventory By Building Age
Year Built
Percent
Before 1970
73.0%
1970-1979
0.0%
1980-1989
8.0%
1990-1999
4.0%
2000-2009
14.0%
After 2009
0.0%
All
Office Stock Traits
Year Built
Size (sq. ft.)
Distance to Highway (miles)
Distance to CBD (miles)
Distance to Landmark (miles)
Low
1883
10,000
0
0.8
1.3
Submarket
Mean
Median
1938
1936
65,656
39,500
0.1
0.1
1.5
1.2
2
1.7
High
2010
430,000
0.2
4.9
5.4
As of November 30, 2013 Landmark =Lake Michigan
100.0%
As of November 30, 2013
Average Submarket Lease Terms
CRD %
Free Rent
(mos)
- 4.7%
1.0
Expenses $
(Commercial)
Lease Term
(yrs)
$ 6.90
Leasing
Commission %
4.4
Tenant
Improvements $
4.4%
$39.44
As of November 30, 2013
Section 7 - Inventory Growth Comparisons
Inventory Growth Rates
City West
Chicago
Midwest
United States
Period Ending:
Submarket Ranking
Quarterly
Annualized
3Q13
2Q13
3 Year
5 Year
3Q13
2Q13
0.0%
0.0%
0.1%
0.1%
0.0%
0.0%
0.1%
0.2%
0.1%
0.1%
0.1%
0.2%
- 0.4%
0.4%
0.3%
0.4%
N/A
N/A
12
11
YTD Avg 1 Year
0.0%
- 0.1%
0.0%
0.1%
0.0%
0.2%
0.1%
0.1%
09/30/13 06/30/13 09/30/13 12/31/12 12/31/12 12/31/12
62
61
367
365
09/30/13
06/30/13
* of 13 metro level submarkets
** of 103 regional submarkets
*** of 631 U.S. submarkets
Metro Inventory Growth Rate Trends
%
0.20
0.15
0.10
0.05
0.00
-0.05
-0.10
-0.15
-0.20
2Q11
3Q11
4Q11
City West
1Q12
2Q12
Chicago
3Q12
4Q12
1Q13
Midwest
2Q13
3Q13
US
As of November 30, 2013
Page 6
Copyright 2014
Reis Services, LLC
This report has been generated for the exclusive use of Justin Peterson of Reis
The use, distribution and display of this report and any of the information contained herein are subject to the Terms and Conditions at ReisReports.com.
Submarket Analysis (Monthly Data)
Prepared by Jim Stein (312-555-1212)
Office - November, 2013
Powered by ReisReports. Clearly Objective.
Submarket: City West
Section 8 - Construction/Absorption Change
Construction and Absorption
Most Recent Three Months
Quarterly
September - November
City West
Chicago
Period ending:
Sq Ft Built
Sq Ft
Absorbed
0
0
11/30/13
3Q13
2Q13
Sq Ft Built
Sq Ft
Absorbed
18,000
-64,000
0
0
11/30/13
09/30/13
YTD Avg
Sq Ft Built
Sq Ft
Absorbed
Sq Ft Built
Sq Ft
Absorbed
22,000
-413,000
0
42,000
18,000
-94,000
0
14,000
16,000
-277,000
09/30/13
06/30/13
06/30/13
09/30/13
09/30/13
Annualized
1 Year History
City West
Chicago
Average over period ending:
3 Year History
Sq Ft Built
Sq Ft
Absorbed
Con/Abs
Ratio
0
520,000
76,000
908,000
12/31/12
12/31/12
5 Year History
Sq Ft Built
Sq Ft
Absorbed
Con/Abs
Ratio
Sq Ft Built
Sq Ft
Absorbed
Con/Abs
Ratio
0.0
0.6
5,000
444,000
16,000
-233,000
0.3
-1.9
7,000
1,666,000
-61,000
-554,000
-0.1
-3.0
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
Construction/Absorption and Vacancy
20,000
Square Feet
10,000
10
0
5
-10,000
-20,000
Vacancy Rate (%)
15
0
Jan Feb Mar Apr May Jun
Jul
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2012
Jul
Aug Sep Oct Nov
2013
Vacancy Rate
Construction
Absorption
As of November 30, 2013
Page 7
Copyright 2014
Reis Services, LLC
This report has been generated for the exclusive use of Justin Peterson of Reis
The use, distribution and display of this report and any of the information contained herein are subject to the Terms and Conditions at ReisReports.com.
Submarket Analysis (Monthly Data)
Prepared by Jim Stein (312-555-1212)
Office - November, 2013
Powered by ReisReports. Clearly Objective.
Submarket: City West
Section 9 - Submarket Area Map: City West
Metro:Chicago Submarket:City West
Central Ave
W Fulton St
I-55
I-90/94
W North Ave
N Orleans St
W Division St
Page 8
Copyright 2014
Reis Services, LLC
This report has been generated for the exclusive use of Justin Peterson of Reis
The use, distribution and display of this report and any of the information contained herein are subject to the Terms and Conditions at ReisReports.com.