By Chuck Fieldman | Photos by 726 Visuals
While office occupancy rate and corporate office operations have continued to decline throughout the Chicago area, Oak Brook officials remain optimistic about the village’s future on those fronts.
Offices of all types took a huge hit during the COVID-19 pandemic, as most companies saw a huge slowdown in business, and many workers moved to doing their jobs remotely from home.
While the effects of the pandemic have, at least, slowed down substantially, the return of workers to offices has not been so sizable.
The share of available office space in the suburbs increased during the second quarter of 2023 to a record-high 28.9% from 28.5% at the end of March, according to a story in Crain’s, based on data from real estate services firm Jones Lang LaSalle. The new vacancy rate is up from 27.1% a year ago and 22.1% at the beginning of 2020.
In Oak Brook, Village Manager Greg Summers said Co-Star data he was provided in June indicated that office occupancy in Oak Brook is at 87%, representing a healthy office marketplace. Other sources have more recent numbers indicating rates lower than that, but Summers said he is encouraged by a trend showing an increase over the past year.
“The numbers I was given show an increase of 2% over 12 months ago, a sign that the market is trending in a positive direction,” he said.
Summers said location is a big key to the village’s high office occupancy rate.
“Oak Brook is strategically located at the intersection of two major expressways and is in close proximity to downtown Chicago as well as both Chicagoland airports,” he said. “Add to those attributes the total lack of a municipal property tax as well as pro-business and pro-law enforcement elected officials, and it is clear why Oak Brook in DuPage County is the preferred alternative to Chicago and Cook County.”
Am George works for Zeller Realty Group as assistant property manager of Commerce Plaza, which includes office buildings at 2001, 2015, and 2021 Spring Road. She said those properties have a current occupancy rate of 90%, and she believes Oak Brook’s location and low property taxes make the village attractive for office building tenants.
“It’s a great location, close to Oakbrook Center, and there are low taxes and low crime,” George said. “Crime is a big thing, and Oak Brook is also easy to get to. Even if you live downtown, it’s easy to get to Oak Brook. It’s out of the city, but you can still get everything you need.”
Dennis Hiffman of NAI Hiffman in Oakbrook Terrace has been involved in real estate brokerage for more than 50 years, including several projects in Oak Brook. He said Oakbrook Center is a large draw to those interested in office space in Oak Brook.
“It offers a lot of great retail and restaurants,” he said.
Village President Larry Herman weighed in with similar comments to Summers and George.
“The starting point for Oak Brook’s decades of success is our location, the best of any suburb, with crossroads of I-88 and I-294, close to both O’Hare and Midway,” he said. “Add to that a purposely built community that was designed around creating an upscale symbiotic office, shopping, and residential areas.”
Herman said the commitment by village officials to low taxes also is key.
“There’s both our comparatively low sales tax and hotel tax rates, which makes staying and shopping and dining in Oak Brook attractive, and, of course, our lack of a municipal property tax,” he said. “The strong tax base also results in a comparatively lower property tax burden to businesses and residences from all the non-municipal property tax levies.”
Herman said aggressive crime-fighting, exceptionally low taxes for businesses and consumers, location, ease of doing business, and the village’s high development standards are factors that attract high-end businesses.
“Most importantly, we now have a village government that understands all this and is committed to efficient and effective governance that serves the mutually dependent business and residential community,” Herman said.
As for Oak Brook’s future in attracting tenants to its office buildings, Summers said the village remains the premier suburban office destination.
“As companies continue to grapple with how they balance their office environment versus work-from-home requests, we foresee a growing desire for suburban office headquarters and outposts alike,” he said. “These convenient locations will provide space for colleagues to gather and spaces where companies can hold meetings, without the need for long commutes to downtown Chicago.”
Hiffman offered that possibly the biggest future challenge in continuing to increase office occupancy will be that Oak Brook has some older office buildings that don’t offer the same type of amenities as do newer spaces.
“Some of the buildings are 40 to 50 years old, and not all landlords are willing to spend money to update and make improvements,” Hiffman said.
While the occupancy rate of office space remains a challenge, businesses with their own corporate offices in the village continue to enjoy having an Oak Brook address. ■