West Loop: Most desired submarket adds to occupancy

westloop

The West Loop continues to lead the rest of the CBD, gaining 732,000 square feet of occupancy in 2011. Its strong performance has been expected as its location is the most desirable for executives. With the inclusion of the two largest commuter train stations and relatively easy access from the CTA lines, it is the most convenient submarket for the majority of commuters. Class A performance was especially solid during the quarter, as the space Wells Fargo has leased at 10 & 30 South Wacker has been removed from direct availability. With this, the Class B segment has suffered as it will be vacating space at several Class B buildings, but the net result is positive.

While not the most active submarket in terms of leasing activity, the West Loop is likely to see more benefits to occupancy as a result of this quarter’s deals. DeVry signed a 77,000 square foot lease at 300 South Riverside and will be moving employees from Suburban Chicago. West Monroe Partners’ 43,000 square foot lease also represents new demand for the submarket. GE Capital is expanding by 79,000 square feet in its renewal at 500 West Monroe.

Investment sales that closed during the quarter were on both ends of the spectrum. 250 South Wacker was purchased by Credit Suisse for $91 million ($371 per square foot) while 400 South Jefferson was purchased by Sterling Bay for $15 million ($49 per square foot). Sterling Bay will upgrade 400 South Jefferson to accommodate Sara Lee’s new CBD headquarters by 2013. Sara Lee will be vacating its East-West Suburban Chicago headquarters to take advantage of the young labor pool in the CBD.

The West Loop’s borders are defined as the Chicago River (North), I-94/I-90 (West), Wells Street (East), and Van Buren Street (South).

For more information on the Chicago office market, please reference our 4th Quarter 2011 Chicago Market Overview and Submarket Snapshots.

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