The suburban office vacancy rate inched higher in the third quarter, after three previous quarters where it held steady or dropped. But there has also been a trend among firms of moving into the city to lure more employees.
The vacancy rate rose to 23.7 percent, up from 23 percent at the end of the second quarter, according to data from JLL reported by Crain’s.
The last time there had been that much available space was midway through 2014, and the latest figures mark an almost five percentage point increase over the post-recession low of 19 percent in 2016.
Exacerbating the problem for suburban landlords is the fact that more companies are looking to attract workers by moving Downtown, where the market has been strong for building owners.
The result has been a number of firms deserting or dramatically scaling back at large suburban corporate campuses, including AT&T, Motorola Solutions, GE Healthcare and BP.
But among a few suburban campuses that are vacant, plans are in the works. New Jersey-based Somerset Development is leading a massive overhaul of the former AT&T campus in Hoffman Estates,while VennPoint Real Estate and UrbanStreet Group have started redeveloping the former Motorola Solutions headquarters in Schaumburg.
The O’Hare submarket, meanwhile — near the airport — remains the tightest in the suburbs, with a 15.4 vacancy rate, according to JLL. [Crain’s] — John O’Brien