Sperry Van Ness International Corporation’s (SVNIC) 2015 Market Update Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2015. Today we are delving into the 2015 Top Office Markets to Watch. Not the largest or the most actively contested markets, the 2015 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.
Top Office Market to Watch: Chicago, IL
The transformation of Chicago’s River North submarket echoes the metamorphoses of many up-and-coming submarkets in the United States. With an eclectic mix of industrial-era warehouses and lofts, plus plenty of bus and subway connections, effective rents in the submarket have spiked since 2012, following a path similar to Manhattan’s Midtown South tech district. Tech companies like crowd-sourced reviewer Yelp, online coupon provider Groupon, online payment processor Braintree, and the digital marketing division of McDonald’s, are located in buildings like the Reid Murdoch Center, a former food-processing plant, and the Mart, an Art Deco warehouse that formerly housed Marshall Field. Several of Chicago’s other submarkets are also recasting themselves, with the Fulton Market area leading the pack. The former Fulton Market Cold Storage warehouse (now flagged as 1kFulton) was repositioned as more than 500,000 square feet of office space, headlined by tenants like Google, tech incubator Sandbox Industries, and Chicago-based bicycle component producer, SRAM Corporation. Several projects, including boutique hotels, restaurants, and retail spaces, are now underway around 1kFulton, vying for locations proximate to Google’s Midwest regional headquarters. While traditional business stalwarts still prefer the Loop, there are many rapidly improving submarkets in downtown Chicago that are offering compelling opportunities for small- and mid-cap investors.
To read more on Chicago and other top office markets, download the full version of the 2015 Office Market Update report here.
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