Today is	Commercial real estate appraisals for Chicago Cook County and the Collar Counties of Illinois CommercialAppraiser.com The official web site of Peterson Appraisal Group, Ltd. 6035 N. Northwest Highway, Suite 200 Chicago, IL 60631 Phone:773/763-6750 Fax:773/763-6492 E-mail: PAG@CommercialAppraiser.com
	Appraisal Order Form Home Contact Us Client List Appraisers Services Downloads Search Engine Links Metacrawler Metasearch Links Web Site Map	DOWNTOWN CHICAGO OFFICE MARKET OVERVIEW The Chicago downtown office market operates with approximately 118.6 million square-feet of net rentable area (NRA) in five submarkets: West Loop, Central Loop, East Loop, North Michigan Avenue and River North. Demand remains weak in the downtown office market during the 3rd quarter 2005. In the most recent CB Richard Ellis survey, the direct vacancy rate remained similar to the 15.7% recorded at 1st quarter 2005, which is the highest level reached since 1996. Some 18.6 million square-feet are unleased. Factoring an additional 4.3 million square-feet of available sublease space, the overall available space climbs to 22.9 million square-feet, for an overall vacancy rate of 19.3%.
	Overviews Downtown Chicago Office Market Suburban Chicago Office Market Chicago Industrial Market Chicago Retail Market Chicago Self Storage Market	The following shows the inventory, vacancy and rental rate statistics for the downtown Chicago market area according to data in the CB Richard Ellis, MarketView Chicago Downtown Office, Third Quarter 2005: CHICAGO DOWNTON OFFICE MARKET STATISTICS 3rd QUARTER 2005 Market Rentable Area SF Vacancy Rate% Net Absorption SF Construction SF Average Lease Rate Range $PSF Overall Vacancy Rate West Loop Class A 26,172,378 15.2% -1,207 470,000 $15 to $28.00 20.2% Class B 9,394,268 19.0% 99,511 - $7 to $14.00 24.5% Class C 4,374,209 17.5% -88,508 - $6 to $12.00 18.9% Subtotal 39,913,855 16.3% 9,976 470,000   21.1% Central Loop Class A 15,25,623 15.6% -106,008 850,000 $12 to $28.00 20.6% Class B 16,627,236 10.5% 89,452 - $7 to $13.00 12.6% Class C 8,880,403 16.9% -254,421 - $5 to $10.00 17.5% Subtotal 40,763,262 13.8% -270,977 850,000   16.7% East Loop Class A 5,930,836 22.6% -242,852 - $11 to $21.00 28.1% Class B 10,082,835 20.6% -14,235 - $7 to $14.00 23.0% Class C 5,638,803 10.8% -48,311 - $5 to $10.00 11.7% Subtotal 21,652,474 18.6% -305,398 -   21.5% North Michigan Ave. Class A 4,357,168 13.7% -20,748 - $11 to $21.00 16.6% Class B 6,685,711 11.3% 7,665 - $8 to $15.00 14.2% Class C 817,567 4.6% -49,035 - $7 to $13.00 4.6% Subtotal 11,860,446 11.8% -62,118 -   14.4% River North Class A 382,436 25.7% 0 - $10 to $16.00 25.7% Class B 2,459,111 33.1% 52,043 - $8 to $13.00 42.2% Class C 1,613,505 13.1% -9,680 - $6 to $11.00 13.8% Subtotal 4,455,052 25.2% 42,363 -   30.5% Chicago CBD 118,645,089 15.7% -586,154 1,320,000   19.3% * Includes sublease Space Source: CBRE Chicago MarketView Chicago Downtown Office Market Third Quarter 2005. Absorption and Vacancy CB Richard Ellis reports that the majority of leasing activity is limited to early renewals and lease extensions, as opposed to new space needs. Year-to-date net absorptions, which was negative 254,664 square-feet, is an improvement of sorts when compared to the negative 1,106,292 square-feet registered at the same period last year. The East Loop submarket showed the largest increase in vacancy as a result of the relocation of several large tenants. The Central Loop and North Michigan Avenue submarkets also showed increases, while the West Loop showed improved occupancy. The West Loop and River North were the only submarkets to post positive net absorption. Lease Rates Average asking net lease rates remained flat during the quarter. For Class A space, the average asking net lease rate increased slightly for the West and Central Loop submarkets reporting $15-$28 per square-foot. The unfavorable landlord market will remain until a marked improvement is made in the vacancy rate. Generous concessions such as free rent and tenant improvement allowances are common. Construction No new construction was delivered during the third quarter, however the 800,000 square-foot One South Dearborn is scheduled for delivery in the fourth quarter. A new skyscraper is planned by Hines Interests LP for 300 N. LaSalle, on the north bank of the Chicago River. The year has already experienced over 2.5 million square-feet of new deliveries year-to-date and by year-end this number will eclipse both 2004 and 2003 combined. Investment The investment market for CBD office properties remains active: Boeing Co. is under contract to purchase its 770,300 square-foot riverfront headquarters for $165 million; Broadway Partners purchased the 512,000-square-foot 300 S. Wacker Drive; and DIFA Deutsche Immobilien Fonds AG agreed to buy the 1-million-square-foot 111 S. Wacker Drive for $410 million. Other transactions are expected to close by year-end
		CommercialAppraiser.com The official web site of Peterson Appraisal Group, Ltd. 6035 N. Northwest Highway, Suite 200 Chicago, IL 60631 Phone:773/763-6750 Fax:773/763-6492 E-mail: PAG@CommercialAppraiser.com © 2007 Peterson Appraisal Group, Ltd.