(The Center Square) – Chicago Loop Alliance President Michael Edwards is focused on seeing the silver lining amid data that shows downtown office space vacancy rates jumped to all-time high of 27% over the last few months after having shown signs of stabilizing earlier this year.
Data shows over the last two years alone, the central business district has lost 2.3 million square feet of office tenants, or almost twice the amount of space companies vacated over a two-year period beginning in 2009 during the worst of the Great Recession.
“With the new administration in Washington, there’s been so much uncertainty created that it’s really put a damper on the activity that we did have early in the first quarter of this year,” Edwards told The Center Square. “There’s a lot of uncertainty out there, which I think is really driving investors to not pull the trigger on projects, owners not listing their buildings and I think that that has slowed things down.”
Through it all, Edwards is keeping his eyes on the prize.
“It’s revitalizing in a slightly different way,” he said. “People are here in the evenings and on the weekends more than they were before the pandemic. Our numbers are still very good office wise Tuesday, Wednesday and Thursday. They’re not bad on Monday, and Friday is not a day where people come to the office certainly as much as they used to, although there’s still people downtown.”
Edwards is adamant that despite the challenges, the overall Loop revitalization project is in full swing. He also points to what he views as other promising signs like a new Mexican restaurant recently opening in the area, along with a Panera Bread and a Gap factory store, both now under construction.
Edwards added the Loop Alliance is now also in talks with the city about the creation of a vacant storefront partnership that could mean more businesses up and down the State Street area.
“We’ve had conversations with the city, and they’ve encouraged us to submit applications,” he said. “The amount of money and how we can use the money is still to be determined, but we’re hopeful that the city can see how important State Street is to the success of The Loop and the central area of the city.”
With more companies also upgrading to newer and more updated buildings as a way of motivating more employees back to their Loop offices, data also shows the average vacancy rates at top-tier, or so-called Class A properties, are more than 10% lower than Class B vacancies.
