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Chicago office leasing gets tougher as brokers scrutinize owners

At a Bisnow Chicago leasing conference on Sept. 29, industry panelists said brokers are increasingly reviewing owners’ capital stacks and whether they can fund tenant improvements over multiple years.

Reported · Written up by our desk · Commercial

Chicago office leasing in key segments is becoming a more rigorous process, as brokers representing tenants are taking a harder look at the owners they negotiate with, according to Bisnow.

At Bisnow’s Chicago Leasing Conference on Sept. 29, panelists said broker evaluation increasingly includes digging into buildings’ capital stacks, negotiating tenant protections into lease agreements, and checking that owners are financially capable of funding tenant improvements.

Savills Chicago Region President Robert Sevim said forecasting and understanding the financial makeup of a counterparty is the first step to understanding the market, calling it more acute than ever. He added that discussions around rental rates or concessions move quickly, but confirming the owner can perform, especially over multiple years, is key.

The evaluation process also extends to forward-looking details such as lease rollover dates, as brokers and owners work through the changed standards for closing deals.

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