To be sure, some lenders have already started pulling back from real estate. Still, most experts don't expect the decreased demand for office space to translate into a dramatic rise in office vacancy rates. CB Richard Ellis Inc. Another strong year of demand for space will help push down the vacancy rate, even though nearly 1.7 million square feet of new office space will be completed this year. In the suburbs, the market will open up, with the vacancy rate rising to 11.3 percent in 2001, compared with 10.1 percent during the fourth quarter of 2000, according to the CB Richard Ellis forecast. Dallas-based tenant representation firm Staubach Co. And a shortage of new office space will be offset by an increase in space available for sublease, said Stratton, whose firm is handling the sublease of the former Everen Capital Corp. headquarters at 77 W. Wacker Drive.
Many experts see dot-com companies leading the sublease parade.
Internet start-ups, which helped drive up demand for office space last year, are now putting space back on the market. Dot-com layoffs are a reminder that the office market is driven by jobs, much like the residential market. When businesses expand, they hire more workers, or pay their current workers more. Residential consultant Tracy Cross says Chicago-area job growth slowed last year, and the area will add about 46,700 jobs in 2001, well below the 75,700 annual average number of new jobs added between 1993 and 1999. Slow job growth will continue in 2002, he writes in Residential Profiles, a quarterly report on new-home sales.