Chicago’s Central Business District: Office Market In A War For Talent
At the Bisnow 3rd Annual Chicago State Of Office conference this week, a strong gathering of commercial RE pros listened to a blue-ribbon panel drawn from around Chicago’s office marketplace to hear perspectives on the local and national economy. Gathered were:
- CBRE’s Jim Karras, Occupier Practice/Tenant rep. Corporate services teams.
- Jones Lang LaSalle’s Brad Nesbit, Leasing Agency Group
- Andy Davidson, MB Real Estate Corporate Services Advsory Group
Demographics And CBD vs. Suburban Office
From the get-go, these professionals of property management and market matchmaking described a Chicago central business district marked by a drive to capture young talent to serve the industries that rent the most CBD space: legal, technical and professional. Where’s the demand coming from?
“What we’re seeing quite a bit of at least in the CBD is more or less a war for talent,” said Jim Karras. ”We’re seeing a drive to the young talent, the millennials, as well as trying to secure the baby boomers as well, the empty nesters who are now living in the city.”
Andy Davidson: “Most of the demand is the younger generation, it’s IT, it’s tech, overall. A lot of the demand is education, the City of Chicago has a big educational base.”
Some early contention appeared over CBD vs. suburbs. Andy Davidson was more down on the outlying areas while Jim Karras saw greater stability. ”The only reason the suburbs, I think are doing okay, is that the people who have to go out to the suburbs, the education groups, the hospital groups that have to go out to be near the client. That’s what I think is holding up the suburbs. There are big companies that are doing build-to-suits that aren’t lowering the vacancy when they do it, and there’s a lot of old buildings out there that quite honestly at 25% vacancy don’t make any sense to retrofit. So I’m not as positive.”
Davidson continued on demographics: “You’ve got ahuge trend of people coming downtown, I don’t see that stopping You’ve got a generational shift – 10,000 people who are turning 65 every single day. It’s the biggest generational shift we’ve ever had. So companies have got to get downtown, near the young.”
Watch The Source for more coverage of Bisnow’s 3rd Annual Chicago State of Office conference.