(The Center Square) – As demand for Chicago downtown office space fell to record-high levels for the 11th consecutive month in March, Wirepoints President Ted Dabrowski is clear about who he sees as the real victim.
“It’s certainly bad news for taxpayers because as these property values go down in the big office properties, that means the property tax bills are going to grow higher for residential,” Dabrowski told The Center Square as the vacancy rates are up nearly 14% since the start of the COVID-19 pandemic. “Maybe there’s a few positive signs in the numbers for downtown, but overall it still spells big trouble.”
Real estate firm CBRE now pegs the area’s overall vacancy rate at 26.5%, and estimates that the city’s central business district is occupying as much as 2.1 million less square feet than it did just a few years ago. As a result, neighborhood foot traffic continues to remain only a fraction of what it once was, meaning that local business that remain downtown see fewer customers.
Through it all, Dabrowski said he can envision a brighter future provided city leaders are open to changing direction.
“Number one is always just remove red tape, make it easy for companies to move in,” he said. “Number two is you got to get rid of these pension debts. As long as these taxes keep going up, it’s going to be harder for companies to move in.”
Dabrowski said another issue city leaders need to address is crime.
“Yes, it’s down from the highs of the George Floyd days, but we’re still the highest murder rate in the country for big cities,” he said. “All those things add up and we have to be really careful with our policies in Chicago and whatever politicians do, they should be reducing the burdens to come into downtown.”
Dabrowski said he sees just one way for the city to resemble what he argues it should look like.
“I think it takes a change in leadership because both the mayor and the governor want higher taxes; they support bigger governments; they are soft on crime,” he said. “As long as that continues, I think Chicago’s going to struggle. We need a complete turnaround in the kind of policies we have in order to bring life back.”
Researchers note that owners of newer and updated buildings are generally having an easier time getting leases signed than others, with vacancy rates among top-tier, or Class A, office buildings downtown just under 21%, compared with a 32% vacancy rate among Class B buildings.
