Chicago is a city where big corporate international and multinationals go to thrive. It is on this basis that Chicago has been sharing in the nationwide tech boom.
The city enjoyed a number of major leasing deals from West Coast-based tech firms including Google, Yelp and Uber.
Even local firms, such as Braintree Payment, had its recent expansion in Chicago enabled out-of- town by San Francisco-sourced investment. This combination of demand and capital supported Chicago’s downtown leasing market throughout 2014 and resulted in average rent increases of 7.1% last year.
A wide range of domestic and international investors are supporting Chicago’s investment sales market, which, in turn, is providing landlords with added incentive to maintain current asking rents.
Investment transaction volumes ended the year up 6% over 2013 levels, totalling $6.1 billion. This is 55% above 2012 volumes, but some 41% below their heady 2007 peak when $10.3 billion big-ticket office investment deals were undertaken.
Strong market conditions are bringing with them intensified construction activity. Developers are focusing on smaller conversions catering to tech and creative firms in River North and Far West Loop, and a separate set of more traditional glass and steel structures.
Many of the tech conversions are clustering around Google’s new offices in the West Loop.