National Real Estate Investor needs to hire a proofreader

Amidst National Real Estate Investor’s article about Chicago office trends, which always has me curious, I found a number of typos that made this a less than stellar read.  In my analysis, I’m going to begin by picking out a couple of errors that need to be fixed, because I’m particular like that, and then I will continue with a content analysis.

  • The second paragraph opens with “It’s the office sector, however, that is really boiling over with investment this year.”  The writer segues into a discussion of major residential towers rising in Chicago.  The opening sentence would have been better suited for the third paragraph.
  • At the beginning of the section A seller’s market, the writer states that “the prices being paid by investors for office assets are approaching $100 per sq. ft. for many Class-A properties”.  Excuse me?  Where can I find these $100/SF office assets?  After analyzing the article further, I believe the author meant to say “$400”, which would make more sense given the $300+/SF deals that have been taking place and the Hines deal at 1 S. Dearborn for $420/SF.

The article’s content, unlike its delivery, gets higher ratings from this blogger.  I found a good balance of professionals, including developers, tenant representatives, and leasing brokers represented in the quotes.

  • Matt Ward was spot-on with his comment about young office workers shunning the suburbs.  When acquaintances of mine in the 20-something range find out someone just earned their degree and moved to a job in the suburbs, they are greeted with startled gasps and looks of disgust or pity.  United Airlines relocation to Wacker Drive is a concrete testament to the benefit of being downtown – they recently announced that they may be expanding by as much as 100% within their building.
  • David Wilson’s comment about fewer sublets available is a good sign – it shows that my colleagues on the tenant rep side are helping their clients make smarter long-term decisions than tenants were making during the dot-com period.
  • I agree with Chris Wood that rates are not going to continue to climb.  Although developers may be individually making sound decisions about the amount of premium class-A space demand, as those high-end tenants (Jenner & Block, William Blair, Kirkland & Ellis, Skadden Arps) take over new space, they will be vacating their existing space, which has implicitly been downgraded to regular A-class space.  I anticipate pressure on the mid-low A-class and high-B space as we see a lot of upgrading to capture value during the “great office move of 2009”.  Please note that this may not actually take place in 2009, but give or take 6 months due to the staggering of deliveries.

Now that those interviewed for this article have had their chance to speak, you deserve yours.  If you are a commercial real estate professional or occupier, what are your thoughts on the market?  Are you bullish or are you a bear?  Looking to capture value or hoping to protect what you’ve got?

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One Response

  1. Excellent analysis and good editorial catches! Ever considered law school? 🙂 As I’m sure you know, I think your take on the post-2009 market is spot on.

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