Excluding the Chicago real estate market, suburban office buildings within a half-mile of rail transit had a 20% lower vacancy rate compared to the regional average over the past decade.
Transit can help insulate businesses and employees from economic shocks. The price of transit stays relatively stable compared to driving costs, and having an expanded set of transportation choices means businesses have a reliable connection to talent, customers, and partners.
During the 2008–2009 financial crisis, the Chicago market shed jobs like the rest of the nation. The entire region lost nearly 150,000 jobs, but the loss was very uneven. Areas closer to a rail station fared much better. In fact, in areas less than a quarter-mile from a CTA ‘L’ or Metra station jobs were added, even during the steepest year of decline as shown in Table 1.
Table 1: Jobs are more stable near transit during economic shocks
How desirable are properties near transit? In August 2018, in the 7-county Chicago region, 76 percent of the multifamily properties under construction were within a 10 minute walking distance of rail transit.
Similarly, office buildings close to transit consistently attract and retain tenants at a higher rate, even through economic downturns. As shown in Figure 1, in 2017, vacancy rates were an average of two percentage points lower than the regional average in locations within ½ mile of rail transit. Over the past 10 years, office space within ¼ mile of a rail station was on average 2 percentage points below the regional vacancy rate. Areas within ½ mile beat the region by 1.5 percentage points.
Chicago’s central business district has a strong influence on regional averages, but these patterns largely hold true in the suburbs as well. Removing all data from the City of Chicago and including the last 10 years, we found that office space within a half-mile of rail
12.5% higher average sale prices, and
10% higher asking rents
Figure 1: Buildings near transit stay occupied