Downtown Chicago still booming
Tuesday, Apr 9, 2019 - Posted by Rich Miller
* Danny Ecker at Crain’s…
Companies moved into more downtown office space in the first quarter than they did all of last year, lowering the vacancy rate in the market after three consecutive quarters of increases.
Fueled by a series of co-working providers readying new locations over the past three months, downtown office vacancy fell to 12.9 percent at the end of the first quarter from 13.4 percent at the end of 2018, according to data from brokerage CBRE. The current vacancy matches the rate at the end of the first quarter last year, tying its lowest mark since the end of 2016, CBRE data show.
The numbers tell the story of a healthy downtown office market chock full of leasing activity that has kept vacancy hovering around 13 percent for more than two years and allowed many office landlords to boost rents.
Downtown net absorption, which measures the change in the amount of leased and occupied space compared with the prior period, was up by about 525,000 square feet, according to CBRE. That towered over the roughly 415,000 square feet of net absorption the downtown office market saw in all of 2018 and was the highest single quarter for positive net absorption downtown since the fourth quarter of 2015, according to CBRE.
* Meanwhile, from the University of Chicago’s Harris School of Public Policy…
Harris Public Policy scholars Christopher Berry and Anthony Fowler devised an innovative method for statistically testing the effectiveness of leaders. Although many elected leaders take credit for economic growth, boosting employment and lowering crime, the new study downplays the impact of politicians around the world, especially U.S. governors and mayors. […]
Berry and Fowler found no evidence that governors matter for economic outcomes in their states. Although governors differ in their abilities or appetites to raise and spend money, including federal aid, those differences don’t translate into differences in state income and employment. Governors do, however, influence property and violent crime rates, but not because of their political affiliation. There is little effect on crime when looking at Democratic versus Republican administrations.
Berry and Fowler examined the effects of mayors in the 100 largest U.S. cities and found little evidence of mayoral effects on income or employment. What’s more, they found no evidence of mayoral effect on some of the most important outcomes in a city—the economy, the size of city government and crime rates. One possible explanation is that mayors lack control over governance and service provision within their jurisdictions.
“While previous studies have focused exclusively on aggregate economic outcomes, our results highlight the importance of matching different offices to relevant outcomes when estimating leader effects,” said Fowler, an associate professor at Harris Public Policy. “RIFLE can be applied to virtually any setting with leaders and an objective outcome of interest, so its continued application should improve our understanding of where, when and why leaders matter.”
* Related…
* Economists Differ on Prospects for City, State Under Progressive Agenda: But Michael Miller, associate professor of economics at DePaul University, sees things differently. He thinks that over-regulation and higher taxes will ultimately drive people and businesses away from Chicago and Illinois.
* Mayor-elect wants to change the way Chicago does business. Now she needs to persuade business leaders: “We’ve been the top city for six years now for these corporate relocations,” said Howard Tullman, the former CEO of 1871, the influential tech hub. “The thought that all of that momentum would slow down or not be a priority is pretty scary in terms of my sectors — business and technology.”
- Da Big Bad Wolf - Tuesday, Apr 9, 19 @ 11:52 am:
==Berry and Fowler found no evidence that governors matter for economic outcomes in their states.==
I guess that lets Rauner off the hook.
- Fav human - Tuesday, Apr 9, 19 @ 11:54 am:
1871…
Good news. Apparently anything L2 does won’t matter…. I seriously don’t believe that!
- wordslinger - Tuesday, Apr 9, 19 @ 12:01 pm:
–Although many elected leaders take credit for economic growth, boosting employment and lowering crime, the new study downplays the impact of politicians around the world, especially U.S. governors and mayors. […]–
Mayors and governors are critical to the Press-Releases-Claiming-Job-Creation industry.
The global economy is too big, with too many moving parts, for mayors and governors to have anything but a marginal impact on attracting private capital.
They can, however, mess up certain sectors of the economy, a la Rauner, by reneging on billions in contracts for goods and services delivered. Those folks got tuned up but good.
- Donnie Elgin - Tuesday, Apr 9, 19 @ 12:14 pm:
“Berry and Fowler found no evidence that governors matter for economic outcomes in their states.
What about “Governors own”
- Honeybear - Tuesday, Apr 9, 19 @ 12:18 pm:
Despite Rauners attempts to
downplay
disparage
minimize
The economic power and strength that
Chicago has
The fact remains that Chicago is
THE engine of the entire Midwest.
It’s nice to see that Rauner still
has academic friends, in Dr. Miller.
I was beginning to think all Koch funded academics and voodoo economic practitioners
had been banished after the fall of Rauner, Brownback, Walker et al
- The Captain - Tuesday, Apr 9, 19 @ 12:25 pm:
You think it’s booming now, just wait until it gets a waterpark.
- Chunga - Tuesday, Apr 9, 19 @ 12:52 pm:
It will be interesting to see how the Trib spins this news.
- Amalia - Tuesday, Apr 9, 19 @ 12:56 pm:
two econ profs on Chicago Tonight last night. the DePaul guy and one from NEIU. they are typically at opposites sides of the conservative/progressive scale. they both agreed that TIFs for Lincoln Yards and The 78 are wrong.
- AlfondoGonz - Tuesday, Apr 9, 19 @ 2:15 pm:
Rahm did a very nice job as Mayor.
- don the legend - Tuesday, Apr 9, 19 @ 3:11 pm:
I’m looking forward to the official response from the Eastern Bloc.
- SIUEalum - Tuesday, Apr 9, 19 @ 3:16 pm:
“I’m looking forward to the official response from the Eastern Bloc.”
As someone who spent part of my childhood in the Eastern Bloc, I hope no one takes economic development ideas from that group seriously. All they do is rail against the part of the state funding their needs.
- wordslinger - Tuesday, Apr 9, 19 @ 3:21 pm:
–Rahm did a very nice job as Mayor.–
I don’t think Emanuel had anything to do with the global phenomenon of highly educated, highly valued whiz kids wishing to work and live in urban centers.
Perhaps you were referring to his continuing Daley’s policies of neglect and calculated indifference that’s led to the massive flight of poor black people from the city?
That’s your Illinois Exodus. Rich people are still moving in. Only the troncs can’t see it.
- Transit Rider - Tuesday, Apr 9, 19 @ 4:24 pm:
Nearly 70% of those working in Chicago’s central business district take mass transit to work. Per the Metropolitan Planning Commission 85% of all new commercial construction and over 50% of all new jobs in the 7 county Chicagoland area were within a half-mile of mass transit in the past decade. Where mass transit goes the economy grows BIG time. Millennials and the new generation take transit, ditch cars and use rideshare(Uber Lyft). Transit returns a 4-1 investment by the private sector. Others states are investing in it VERY heavily, Illinois isn’t although Mayor Emanuel has used innovative City funds to make up for no infrastructure $$$ from Springfield in the CTA (Metra has not) the past decade.
- Da Big Bad Wolf - Wednesday, Apr 10, 19 @ 6:38 am:
Metro needs 6.1 billion to repair decaying bridges, rail cars and other infrastructure. Smart procurement can help. Bring the factories to Illinois with 6.1 billion dollar motivation.