Many employees are working from Home during the Epidemic period, leading to a doubling of vacancy rates in downtown office buildings.
The impact of the New Crown (Chinese communist virus) epidemic has caused many office buildings in downtown Chicago to have less than 20% of their employees working at home, which has reduced the use of office buildings and even prevented them from being rented out. Commercial real estate companies predict that this situation may be worse in the next two years.
Chicago downtown has more than 138 million square feet of office market, ranking second in the United States, in addition to downtown office buildings, in the Loop and the north side of the Chicago River area, there are also 5.5 million square feet of unused office space, the number of people coming to work in the city plummeted, the surrounding restaurants, bars and stores operations impacted, but also therefore affect the city of Chicago skyscraper construction plans, tax revenue and other economic activities.
According to commercial real estate firm CBRE, the office vacancy rate was 12.8% the year before last, and increased to 15.5% last year due to the epidemic.
CBRE predicts that even if the epidemic eases and the economy rebounds, there will be companies coming back one after another to lease buildings for office space, but the vacancy rate may increase to 18% by the end of next year; together with the unfinished buildings, the overall vacancy rate may also climb to 20.3%.
CBRE on behalf of the leasing company’s agent Cassata (Mark Cassata) said, the public vaccination accelerated popular, many companies have been considering resuming physical work, but some companies’ leases will soon expire, coupled with the new development of the building to join the market, the end of 2022 will have about 8 million square feet of additional space released.
These new construction cases include the 60-story Salesforce Tower at the Wolf Point location on the Chicago River, the 50-story BMO Tower next to Union Station, and several buildings in the Fulton Market area.
Kashata said the office market may take two to four years to stabilize, but real estate companies are still quite bullish on Chicago’s medium- to long-term office leasing market.
Office building owners to attract customers, have introduced lease concessions, such as renewing leases or signing new contracts to reduce the rent for several months, improve the building’s air filtration system and utilities, or build additional outdoor space.
Recent Comments