Perched on the southwestern shore of Lake Michigan, Chicago, nicknamed The Windy City, is home to nearly three million residents, making it the third most populous city in the U.S. Chicago started as a trading post and later was incorporated as a city in 1837. In 1871, The Great Fire claimed the city, due in part to the buildings, streets and sidewalks being made of wood. Most of the debris from the fire, dumped into Lake Michigan, has become the foundation for Grant Park, Millennium Park, and the Art Institute of Chicago.
During the rebuilding of the city, previous wooden structures were replaced with steel and stone, setting a worldwide precedent for construction. In 1885, the world’s first skyscraper was constructed using steel. During this time, Chicago was becoming the leader in the improvement of public health. As part of this movement, the problem of sewage contamination in the city’s primary fresh water source, Lake Michigan, needed to be addressed. In 1900, the city resolved the contamination problem by reversing the flow of the Chicago River away from Lake Michigan and toward the Illinois River and Mississippi River.
Consisting of 26 miles of lake front, 15 miles of bathing beaches, and 19 miles of bicycle paths, the city of Chicago is a mecca for the outdoor lover and tourists alike. Chicago attracts nearly 40 million visitors annually, making it the “most-visited” city in the midwest. Offering world-class dining, entertainment, shopping, and five star hotels, Chicago has something for everyone. Tourism contributes over $11 billion annually to Chicago’s economy.
There are four major sections of the city:
- The Loop (Central Business District), North, South, and West sides. The financial and cultural center of Chicago is located in The Loop. It is the second largest central business district in the U.S. and is the headquarters for eleven Fortune 500 companies
- The North side is home to many high-rises along the lakefront and is the most residentially dense section of the city.
- The South side is where the University of Chicago is located and most of the facilities of the Port of Chicago.
- The West side plays host to the Chicago Bulls and the Chicago Blackhawks, The University of Illinois at Chicago, and Harpo Studios.
The Chicago Central Business District office market showed stabilization in the third quarter of 2013. The overall vacancy rate declined to 15%. The asking rental rate increased from the second quarter to $33 per square foot. Looking forward, a stronger office market is expected, which could lead to an increase in rental rates.
The Chicago Suburban office space market saw a positive absorption, causing a drop in the vacancy rate to 20% from the previous quarters 20.5%. The third quarter asking rental rates increased to $21.00 per square foot. Leasing activity has become sluggish, and if the trend continues, it could put a halt to positive absorption and declining vacancies.