Chicago: Could Cook County’s inevitable tax expense hike shift Lake Cook Road tenants to Lake County?
Lake Cook Rd is the divider between two submarkets – North-Cook and North-Lake, and popular for office tenants to cluster around, especially to global/corporate headquarters, such as Discover Card, Baxter, CVS, and Walgreens.
- On the Cook –County side, leasable Class A buildings within a 13 mile perimeter of Lake Cook Rd’s I-294 exit were 10% more vacant than those on the Lake-County side.
- Property taxes accounted for 17% of the total gross rent in Cook-County compared to 12% in Lake-County as of Q4.
- The North Cook submarket owns the second highest average direct asking rent of the suburbs set at $27.46, however this growth could be inflated due to increased property taxes.
- Given the recently assessed values by the new Cook County Assessor and foreseeable increases to property tax bills for office owners in North-Cook County, will prospective tenants in the market shift their focus elsewhere?
- Furthermore, does the potential increase of occupancy cost from additional property taxes paid by North-Cook County tenants surpass their cost to relocate, therefore persuading them to move?
Source: JLL Research