Crain’s Chicago Business: Chicago’s Commercial Real Estate Industry Continues to Recover Alongside the Economy

Data tracked by Real Capital Analytics and Moody’s Analytics shows that price measure rose 7.1 percent in 2016.

Chicago’s commercial real estate market is going strong. But its comeback from the recession still isn’t complete.

An index of Chicago-area commercial property values is still seven percent shy of where it was in 2007 before the crash, according to data tracked by Real Capital Analytics and Moody’s Analytics. However, the data shows that this is the seventh straight gain for the Windy City’s market—price measure rose 7.1 percent in 2016.

More gains are expected this year as the economy continues to recover, even though they might not be as large. With a growing economy, it’s likely that demand for commercial space will continue to climb, ultimately boosting property incomes. And while things like rising interest rates can depress property values, rent gains should be able to offset those factors.

Jim Costello, a senior vice president at the New York-based company Real Capital, told Crain’s Chicago Business, “If you’re getting stronger growth in the economy, stronger job growth, that should be good for leasing.” However, he added, “I don’t think it will ever grow enough to give you double-digit growth.”

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