COMMERCIALCafé reports in its Chicago 2017 Mid-year Office Report that the number of deals and sales volume has declined by $2 billion from the second half of 2016 — from $2.9 billion to $1 billion. However, active interest from offshore investors could positively impact the market in the coming months.
In a note, Adel Dobriban observes:
- Though the market isn’t at its best, average price per square foot is on par with the number recorded in the first half of 2015, at $254, the second highest number since 2014;
- The largest deal to close in the past six months was China-based HNA’s purchase of 181 W. Madison for $359 million;
- Three million sq. ft. of office space came online in the first half of 2017, 2.2 million from just two projects – Hines Interests’ River Point and Riverside Investment & Development’s 150 North Riverside Plaza; the remaining 755,000 sq. ft. were dispersed among five other projects in the metro area;
- The second part of 2017 will see five large office projects come online in Chicago, totalling close to 800,000 sq. ft. of space — a rather thin pipeline compared to the first half of the year.
The largest development currently underway is Sterling Bay’s Fulton West project in the city’s booming Fulton Market neighborhood, COMMERCIALCafe reports. Encompassing nearly 300,000 sq. ft., the first phase of the project will feature modern office and retail space across nine stories, and is scheduled for completion in late September.