The suburban office market remains sluggish as vacancy rates stay somewhat high, but for small office users current conditions are ripe for deals.

“Most areas in the Chicago suburbs have vacancy rates hovering between 15-20 percent,” said David A. Kunkel of Kunkel and Associates, Inc., in Lisle, a real estate appraisal, investment and consulting firm. “My sense is that the office market is overbuilt right now.”

While current buildings may be faced with higher vacancy rates, the market is just about to get more crowded as current construction will yield even more options.

“There is over 3 million feet of new office space going up in the suburbs in 2007,” said Peter Balyeat, director of leasing office space for Korman/Lederer and Associates in Northbrook. “Sixty percent of that is pre-leased, but 40 percent of it is vacant for the time being.”

With such an increase of new office space it may seem that older offices, or Class C facilities, could find their way out of the market.

However, Balyeat believes that the majority of them will still be around, at least for the near future.

“A lot of companies don’t need offices for appearance,” he said. “You will always have companies that are looking for older buildings.”

Balyeat said that the overall market is down from where it was a year ago at just under 15 percent and that the north and northwest suburbs are much stronger.

Some areas have seen vacancy rates shoot up because of new construction. The market in downtown Aurora has seen a great deal of new construction, covering residential, retail and commercial.

“Vacancy rates have gone up,” said Steve Stephens of Stephens Commercial Real Estate in Aurora. “We have gone from 3 percent vacancy in the downtown area to 10 percent.”

Stephens expects those numbers to go down once the residential projects are finished and the population goes up.

“When the residential increases that will bode well for the office market,” said Stephens. “That should attract more people in the small business community and we should see a turnaround.”

Kunkel offered similar sentiments regarding the far west and southwest suburbs.

“There aren’t any specific hot areas right now for office space, but the areas that are doing the best are in the south and southwest suburbs where there has been a high amount of residential growth,” said Kunkel.

However, some areas that have been built out still fare well in this environment, while others have faltered.

“The Oak Brook market is really strong, especially in class A space,” said Korman/Lederer’s Balyeat. “However, the west East-West corridor from Naperville to Warrenville has been very slow.”

The easiest deals to find right now are for smaller companies, said Kunkel.

Much of the new construction caters to the idea of smaller offices, allowing for an influx of space and making it a better market to find a good deal.

“There are deals out there, but the velocity of them is not very strong,” said Bret Ratay, associate vice president of for Grubb and Ellis in Rosemont. “Not many companies are expanding right now, so most of the deals are for smaller companies looking for less space.”

Grubb and Ellis reports that the suburban office market posted a positive net absorption of 140,000 square-feet in the second quarter of 2007, but was much weaker than the central business district in Chicago during that period.

The firm also reports the north and the I-88 east corridor as the strongest suburban markets with vacancy rates of 16.1 and 17.4 percent, respectively.