Hello, bosco123-ga!
The Federal Reserve Beige Book is a great place to keep track of
commercial construction activity in Chicago. I have excerpted the
relevant sections pertaining to commercial construction from the most
recent issue back through January 2006. If you want, you can read from
the bottom up or the top down!
You can review information about the commercial construction sector
all the way back to 1996. Simply go to the main page, click on the
year and month, and select Chicago on the left side. Then scroll down
to the section on Housing/ Real Estate or Real Estate/Construction to
read relevant text pertaining to commercial activity.
EXCERPTS FROM THE BEIGE BOOK
==============================
http://www.federalreserve.gov/Fomc/BeigeBook/2006/
October 12, 2006 - Federal Reserve Districts - Seventh District--Chicago
http://www.federalreserve.gov/Fomc/BeigeBook/2006/20060614/7.htm
"Nonresidential construction expanded at a steady pace. However, net
absorption of office space slowed and neared zero in many parts of the
District, which a Chicago-area contact attributed to the return of
sublease space into the market. Looking forward, a few contacts said
that the development pipeline looked slower than average and that some
projects were delayed for budget reasons."
==
September 6, 2006 - Federal Reserve Districts - Seventh District--Chicago
http://www.federalreserve.gov/Fomc/BeigeBook/2006/20060906/7.htm
"The pace of new commercial construction continued to be solid.
Contacts in several areas noted that the commercial segment has been
"pretty resilient." A developer in the Chicago area said that net
absorption of office space continued at high rates. However, a
contractor in suburban Milwaukee reported that they were working off
backlogs faster than expected."
==
July 26, 2006 - Federal Reserve Districts - Seventh District--Chicago
http://www.federalreserve.gov/Fomc/BeigeBook/2006/20060726/7.htm
"The pace of new commercial construction moderated; however, demand
for commercial real estate space continued to strengthen. A developer
in the Chicago-area said that net absorption of office space remained
strong in the second quarter, contrary to expectations, with demand
driven by a large number of small deals. High construction costs were
reportedly constraining development of speculative office space. A
developer in Iowa that also operates in other parts of the country
said that it had passed on three developments and moved to reduce its
"bare ground" holdings after observing "an abrupt halt" in sales of
both commercial and residential space."
==
June 14, 2006 - Federal Reserve Districts - Seventh District--Chicago
http://www.federalreserve.gov/Fomc/BeigeBook/2006/20060614/7.htm
"Demand for commercial real estate space continued to expand, however
the pace of new commercial construction slowed."
"Demand for commercial real estate space continued to expand, however
the pace of new commercial construction slowed. A commercial contact
in Chicago said: "Lots of money is still available for real estate,
but most of it is going after existing buildings. Rents are too low to
justify new construction." Commercial vacancy rates were little
changed overall. One contact, however, expressed concern about the
potential for overbuilding of large distribution centers in Indiana.
Net absorption of office space in Chicago continued at a solid pace,
and demand was broad-based. Contacts in Indiana reported strengthening
demand for industrial space."
==
April 26, 2006 - Federal Reserve Districts - Seventh District--Chicago
http://www.federalreserve.gov/Fomc/BeigeBook/2006/20060426/7.htm
"On balance, commercial construction and real estate continued to
expand at a slow pace. In southeast Michigan, demand for all types of
commercial space was weak. In contrast, contacts in Chicago reported a
sharp pickup in net absorption of office space, with a number of large
block tenants entering the market. The amount of space under
construction ticked up in the first quarter. Commercial vacancy rates
were either little changed or down slightly."
==
March 15, 2006 - Federal Reserve Districts - Seventh District--Chicago
http://www.federalreserve.gov/Fomc/BeigeBook/2006/20060315/7.htm
"Commercial construction and real estate continued to expand at a slow
pace. One contact in the Chicago area suggested that development was
being restrained by higher construction costs. Commercial vacancy
rates were generally stable."
==
January 18, 2006 - Federal Reserve Districts - Seventh District--Chicago
http://www.federalreserve.gov/Fomc/BeigeBook/2006/20060118/7.htm
"Commercial construction and real estate continued to expand, but at a
slower pace than in the previous reporting period. Activity picked up
in Indiana, Wisconsin, and mid-Michigan, but was flat in the Chicago
area. Office vacancy rates fell in Indiana but were steady at high
levels in Chicago and southeast Michigan."
ADDITIONAL SOURCES
===================
From "Nonresidential Construction Market in 2007 to Match this Year?s
Strong Performance AIA Consensus Forecast Panel sees balanced growth
and another robust year for nonresidential," by Kermit Baker, PhD,
Hon. AIA Chief Economist 6/2006
http://www.aia.org/aiarchitect/thisweek06/0630/0630econ_consensus.cfm
"Demand for commercial real estate in the Chicago District continued
to expand, but the pace of new commercial construction slowed,
according to contacts, who said rents were too low to justify new
construction."
==
From "Continued Growth Forecast for Construction."
http://www.villageprofile.com/illinois/chicago/14/topic.html
"With 2005 suburban single-family housing growth reaching record
highs, the suburbanization of previously undeveloped areas continues
to expand the traditional Chicagoland regional boundaries.Although a
less robust year is forecast for single-family housing starts in 2006,
the rate of expansion has driven the demand for infrastructure support
many areas have never seen. Certainly the demand for civil/highway
construction exists in order to more capably support the increased
commuter traffic loads. However, with housing and population growth
typically come the demands for greater supply, therefore greater
construction opportunities of K-12 education facilities, hospitals,
retail developments and public and municipal facilities (i.e. police
and fire stations.)
"Predicted marginal economic growth for 2006 and a relative relaxation
of financial institution lending standards over previous years will be
catalysts to growth opportunities in the multi-family residential and
commercial construction markets. In the City of Chicago, construction
remains focused predominantly on the multi-family residential market.
Whether purchased as investment, as a city home, or to accommodate the
"empty nesters," one cannot avoid the drastic increases in for-sale
supply that have entered the market since 2000. While some may argue
that the long-term continued growth in this market is not sustainable
due to simple supply and demand, short term is certainly steadily
growing and does not show signs of softening. Trends in new commercial
office market construction are positive, with multiple office
buildings being considered by development teams for starts in 2006 -
despite continued high vacancy rates looming over the city."
Read further....
==
Also see the Reed Data Construction Forecast for "Illinois, Indiana,
Ohio, Kentucky, West Virginia, and Eastern Missouri 2006," by Tom
Hale. April 15, 2006
http://www.acppubs.com/article/CA6323808.html
==
I hope this information is helpful!
umiat
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