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Study: Demand lacking for new office tower

A new report suggests efforts to land a big new "Class A" office building for Evanston face major hurdles.

A new report suggests efforts to land a big new "Class A" office building for Evanston face major hurdles.

The study, produced for Evanston Inventure by students in a class at Northwestern University's Kellogg School of Management, says Evanston doesn't look attractive to most companies looking for large blocks of space.

And, in turn, it's impossible for developers to get construction financing for big projects without having lease commitments from one or more large anchor tenants.

The report, presented at a meeting at the Civic Center Tuesday evening, notes that Evanston does have attractions for business owners who live on the North Shore and for young professionals living along the CTA Red Line on Chicago's north side.

Mayor Elizabeth Tisdahl, center, was among those attending the presentation.

But it looks inconvenient to businesses that make heavy use of Chicago's airports or want to draw workers from the western suburbs because of poor east-west road connections.

Chicago's West Loop, the study says, looks more convenient to businesses seeking an urban environment at a price competitive to Evanston because transit lines from all over the region converge there.

Businesses looking for a suburban location can find free employee parking and better freeway access in locations like Oakbrook, Rosemont, Schaumburg, Deerfield, Lake Forest and Skokie.

Finally, the study suggests the vast majority of businesses that have chosen to locate here are smaller ones that aren't big enough to anchor a large development — so creating demand for a new large building from the existing business base is unlikely.

A member of the student research team answers a question from the audience. The project team consisted of Kevin Bell, Kevin Heckman, Marcio Silva and Ben Wilmoth.

Despite that, the study notes that occupancy rates for the nine Evanston buildings that brokerage firms include in the top-quality "Class A" ranks, remains high, at just under 90 percent.

The report looks at six possible development sites and suggests focusing initially on two that might work for smaller office buildings that wouldn't require large anchor tenants.

And it suggests stengthening the city's marketing efforts to attract businesses that fit the city's sweet spot of drawing employees from the North Shore and Chicago's north side as well as targeting industries that already have a substantial presence here.

Related documents

Kellogg-Evanston Commercial Real Estate Presentation

Kellogg-Evanston Commercial Real Estate Report

Video of the presentation

 

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