Bad news for the suburban office sector:

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Demand for leased suburban office space has fallen to levels not seen since the last recession, industry observers say, and some building owners are holding on to their property because buyers are rare.Cushman & Wakefield said second-quarter suburban leasing of office space fell 23 percent to 1.3 million square feet compared with the first quarter.

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The Chicago Tribune reports that the downtown office vacancy rate was 10.2 percent in the second quarter, improved slightly from 10.5 percent in the first quarter.  However, that contrasts with the suburbs, where vacancies have risen to 14.6 percent in the second quarter.  In the first quarter, 14.1 percent of office space sat vacant, based on a study by Transwestern, a real estate services firm.

One reason for the decline in demand is that employers are locating in downtown Chicago to attract younger employees, who often prefer the city to the suburbs.  What other reasons do you think affect suburban office space demand?

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