Q1/24 Downtown Chicago Office Market Report

Bradford Allen is pleased to share with you our latest office market report.

This quarter in Chicago’s downtown office market:

  • Absorption remained negative with -1.4 million square feet absorbed through Q1/24.
  • The direct vacancy rate surpassed 21% in the CBD.
  • Demand is increasing for move-in ready office suites which accounted for more than 38% of deals in Q1/24.
  • The average gross asking rate in Chicago’s CBD remained at $43 per square foot.

 

Year-End 23 Suburban Chicago Office Market Report

Bradford Allen is pleased to share with you our latest office market report.

The second half of the year in the suburban office market:

  • Leasing activity remained above pre-pandemic levels with more than 5.2 million s.f. leased through 2023.
  • Absorption remained negative with -930,000 s.f. absorbed through the back half of 2023, resulting in -1.2 million s.f. of net absorption through the year.
  • The direct vacancy rate increased to 28.3%.
  • The average gross asking rate for the market is $27 per s.f.

 

Q4/23 Downtown Chicago Office Market Report

Bradford Allen is pleased to share with you our latest office market report.

This quarter in the downtown office market:

  • Absorption remained negative with -530,000 s.f. absorbed through Q4/23, resulting in a total of -1.6 million s.f. of net absorption through 2023.
  • The direct vacancy rate surpassed 20% in the CBD.
  • Available sublease space on the market remained steady, sitting at 7.7 million s.f.
  • The average gross asking rate for the CBD declined to $43 per s.f.

 

Q3/23 Downtown Market Report

Bradford Allen is pleased to share with you our latest office market report.

This quarter in the downtown office market:

  • Absorption turned negative with -431,000 s.f. of net absorption through Q3/23, resulting in year-to-date levels of -933,000 s.f.
  • The direct vacancy rate remained steady, sitting at 19.8% for the CBD.
  • Available sublease space ticked down to 7.6 million s.f.
  • The gross asking rate for the market remained at $44 p.s.f.

 

Q2/23 Downtown Market Report

Bradford Allen is pleased to share with you our latest office market report.

This quarter in the downtown office market:

  • Absorption levels turned positive in Q2/23, as more than 64,000 square feet of office space was absorbed this quarter—a significant improvement compared to the negative 1.8 million square feet of absorption in Q1.
  • Direct vacancy rate remained steady, sitting at 19.2%.
  • The gross asking rate for the market is $44.25 p.s.f.
  • Available sublease space increased to 7.8 million square feet in Q2/23.

 

Mid-Year 2023 Suburban Chicago Office Market Report

Bradford Allen is pleased to share with you our latest office market report.

This half in the suburban office market:

  • Leasing activity surpassed pre-pandemic levels, as nearly 2.6 million square feet of office space has been leased year-to-date.
  • Absorption levels remained negative at -332,000 s.f. through mid-year 2023.
  • Direct vacancy rate decreased to 26.9%.
  • The gross asking rate for the market is $26.67 p.s.f.
  • Sublet availability slightly declined to 3.9% in Q4/22.
 

Q1/23 Downtown Chicago Market Report

Bradford Allen is pleased to share with you our latest office market report.

This quarter in the downtown office market:

  • Absorption levels turned negative to start the year, posting -1.8 million s.f. in Q1/23
  • Direct vacancy increased to 19.8%
  • The gross asking rate for the market is $42.89 p.s.f.
  • Sublet availability remained steady at 4.5% in Q1/23

 

Year-End 2022 Chicago Suburbs Office Market Report

Bradford Allen is pleased to share with you our latest office market report.

This half in the suburban office market:

  • Absorption levels improved but remained negative at -250,000 s.f. in the back half of 2022
  • Direct vacancy rate remained steady at 28.9%
  • The gross asking rate for the market is $26.22 p.s.f.
  • Sublet availability slightly decreased to 4.1%

 

Q4/22 Downtown Chicago Market Report

Bradford Allen is pleased to share with you our latest office market report.

This quarter in the downtown office market:

  • Absorption levels turned negative to end the year, posting -600,000 s.f. in Q4/22
  • Direct vacancy increased to 18.9%
  • The gross asking rate for the market is $42.64 p.s.f.
  • Sublet availability remained relatively unchanged at 4.2%

 

Q3/22 Downtown Chicago Market Report

Bradford Allen is pleased to share with you our latest office market report.

This quarter in the downtown office market:

  • Absorption levels turned positive for the first time this year at 221,780 s.f. for Q3
  • Direct vacancy remained relatively unchanged at 18.3%
  • The gross asking rate for the market is $43.94 p.s.f.
  • Sublet availability remained steady at 4.3%

 

Mid-Year 2022 Chicago Suburbs Office Market Report

Bradford Allen is pleased to share with you our latest office market report.

This half in the suburban office market:

  • Absorption levels improved but remained negative at -350,000 s.f. for Q2
  • Direct vacancy increased to 28.6%
  • The gross asking rate for the market is $25.42 p.s.f.
  • Sublet availability remained steady at 4.3%

 

Q2/22 Downtown Chicago Office Market Report

Bradford Allen is pleased to share with you our latest office market report.

This quarter in the downtown office market:

  • Absorption levels improved but remained negative at -300,000 s.f. for Q2
  • Direct vacancy increased to 18.4%
  • The gross asking rate for the market is $42.87 p.s.f.
  • Sublet availability slightly increased from 3.9% in Q1 to 4.1% in Q2

 

Q1/22 Downtown Chicago Office Market Report

Bradford Allen is pleased to share with you our latest office market reports.
Chicago’s downtown office market remained dynamic amid distress in Q1/22 as the flight-to-quality trend continued. With a direct vacancy rate above 18%, rising sublet availability, high-profile properties in distress and ample new deliveries, tenants are finding enticing concessions. Digging beneath the headline statistics, we note:

  • The direct vacant and available rate was slightly lower (14.9%) than last quarter (15.2%).
  • Net absorption turned negative after a positive Q4/21, but demand is robust for Class A space in red-hot submarkets
  • Sublet availability is skewed toward Class B buildings.
  • Class B buildings comprise the majority of properties with troubled loans.

 

 

Year-End 2021 Suburban Chicago Office Market Report

Bradford Allen is pleased to share with you our Year-End 2021 Suburban Chicago Office Market Report.

This quarter in the suburban office market:

  • The overall sublet availability rate increased from 3.9% to 4.5%.
  • Overall direct vacancy and availability rates were 27.4% and 32.7%.
  • The market posted a $24.58 p.s.f. gross asking rate.
  • There was 1.1 million s.f. of negative absorption.

 

 

Year-End 2021 Downtown Chicago Office Market Report

Bradford Allen is pleased to share with you our Year-End 2021 Downtown Chicago Office Market Report.

This quarter in the downtown office market:

  • The overall sublet availability rate remained relatively stable at 3.9%, quarter over quarter.
  • Quarter over quarter, overall direct availability and vacancy remained flat at 19.8% and 15.2%, respectively.
  • Overall, the market posted a $40.38 p.s.f. gross asking rate.
  • The quarter posted 370,000 s.f. of positive absorption.

 

 

Q3/21 Downtown Chicago Office Market Report

Bradford Allen is pleased to share with you our Q3/2021 Downtown Chicago Office Market Report.

This quarter in the downtown office market:

  • The overall sublet availability rate remained unchanged at 3.92%, quarter over quarter.
  • Quarter over quarter, overall direct availability and vacancy rates rose from 19.5% to 20.1% and from 14.0% to 15.1%, respectively.
  • Overall, gross average asking rates declined from $41.13 p.s.f. to $41.07 p.s.f., quarter over quarter.

 

 

Mid-Year 2021 Downtown Chicago Office Market Report

Bradford Allen is pleased to share with you our Mid-Year 2021 Downtown Chicago Office Market Report.

This quarter in the downtown office market:

  • The overall sublet availability rate remained relatively stable at 3.93%, quarter over quarter.
  • Quarter over quarter, overall direct availability and vacancy rose from 19.19% to 19.48% and from 13.47% to 14.01%, respectively.
  • Overall, gross average asking rates declined to $41.13 p.s.f. from $41.49 p.s.f., year over year.

 

 

Mid-Year 2021 Suburban Chicago Office Market Report

Bradford Allen is pleased to share with you our Mid-Year 2021 Suburban Chicago Office Market Report.

This quarter in the suburban office market:

  • From Q4/20 to Q2/21, the overall sublet availability rate increased from 2.99% to 3.30%.
  • From Q4/20 to Q2/21, overall direct vacancy and availability rose from 21.95% to 23.84% and from 26.18% to 27.91%, respectively.
  • Overall, the direct asking rate dropped from $25.03 p.s.f. to $24.91 p.s.f., year over year.

 

 

Q1/21 Downtown Chicago Office Market Report

Bradford Allen is pleased to share with you our Q1 2021 Downtown Chicago Office Market Report.

This quarter in the downtown office market:

  • The overall sublet availability rate rose from 3.83% to 3.87%, quarter over quarter.
  • Quarter over quarter, overall direct availability and vacancy rose to 19.19% from 17.90%, and to 13.47% from 11.98%, respectively.
  • Overall, the quarter posted 1.59 million s.f. of negative absorption.
  • Overall, gross average asking rates increased by $0.07 p.s.f. to $40.78 p.s.f., quarter over quarter.

 

 

Year-End 2020 Suburban Chicago Office Market Report

Bradford Allen is pleased to share with you our Year-End 2020 Suburban Chicago Office Market Report.

This quarter in the suburban office market:

  • Year over year, the overall sublet availability rate increased from 1.94% to 2.99%.
  • From year-end 2019 to year-end 2020, direct vacancy and availability rose from 19.55% to 21.95% and 24.16% to 26.18%, respectively.
  • Overall, the direct asking rate was $24.86 p.s.f., a $0.17 p.s.f. decrease from mid-year 2020.

To read the full report, click here.

 

Q4/20 Downtown Chicago Office Market Report

Bradford Allen is pleased to share with you our Q4 2020 Downtown Chicago Office Market Report.

This quarter in the downtown office market:

  • The overall sublet availability rate doubled from 1.90% to 3.83%, year over year.
  • Quarter over quarter, direct availability and vacancy rose to 17.90% from 16.51% and to 11.98% from 10.86%, respectively.
  • Overall, gross average asking rates declined to $40.71 p.s.f. from $41.51, quarter over quarter.

To read the full report, click here.

 

Q3/20 Downtown Chicago Office Market Report

Bradford Allen is pleased to share with you our 2020 third quarter office market report.

This quarter in the downtown office market:

  • Direct net absorption was positive 150,562 s.f., posting a total of 303,703 year to date.
  • Year over year, direct availability rose from 14.02% to 16.51%.
  • Year over year, gross average asking rates dropped to $41.51 p.s.f. from $42.37 p.s.f.

To read the full report, click here.

 

Mid-Year 2020 Suburban Chicago Office Market Report

Bradford Allen is pleased to share with you our 2020 mid-year Chicago suburban office market report.

This quarter in the suburban office market:

  • Net absorption was positive 77,400 s.f. for the quarter but negative 422,822 s.f. at mid-year.
  • From year-end 2019 to mid-year 2020, availability rose 24.16% to 24.73% and direct vacancy rose 19.55% to 20.56%.
  • Overall, the direct asking rate was $25.03 p.s.f., a $0.30 p.s.f. increase since year-end 2020.

To read the full report, click here.

 

Q2/20 Downtown Chicago Office Market Report

Bradford Allen is pleased to share with you our 2020 second quarter Chicago office market report.

This quarter in the downtown office market:

  • Net absorption was negative 540,590 s.f. for the quarter and positive 153,141 s.f. for the year.
  • Quarter over quarter, direct availability rose to 15.71% from 14.69% and vacancy rose to 10.26% from 9.11%.
  • Overall, gross average asking rates declined to $41.49 p.s.f. from $42.18, quarter over quarter.

To read the full report, click here.

 

Q1/20 Downtown Chicago Office Market Report

Bradford Allen is pleased to share our Q1/20 Downtown Chicago Office Market Report.

This quarter in the downtown office market:

  • Direct net absorption was positive 693,731 s.f.
  • Year over year, direct availability rose from 13.90% to 14.69%.
  • Year over year, direct average asking rates climbed to $42.18 from $41.42.

To read the full report, click here.

 

Year-End 2019 Suburban Chicago Office Market Report

This year in the suburban office market:

  • Net absorption was positive 331,551 square feet for the quarter, but negative 516,840 square feet for the year.  
  • From mid-year to year-end, direct availability dropped from 25.11% to 24.16%, while direct vacancy rose from 19.16% to 19.55
  • Overall, the direct asking rate was $24.73 p.s.f.  

To read the full report, click here.

 

Q4/19 Downtown Chicago Office Market Report

Bradford Allen is pleased to share our Q4/19 office market reports. This quarter, in the downtown office market:

This quarter in the downtown office market:

  • Net absorption was positive 1.12 million square feet for the quarter and positive 2.32 million square feet for the year.   
  • Quarter over quarter, direct availability rose to 14.35% from 14.02% and the direct vacancy rose to 9.49% from 9.3%.
  •  Year over year, gross average asking rates climbed to $41.25 p.s.f. from $40.51 p.s.f.

To read the full report, click here.

 

Q3/19 Downtown Chicago Office Market Report

Bradford Allen is pleased to share our Q3/19 office market reports. This quarter, in the downtown office market:

  • Direct net absorption was positive 402,062 s.f., posting a total of 1,257,481 s.f. year to date
  • ear over year, direct availability declined from 14.1% to 14.02%
  • Year over year, gross average asking rates climbed to $42.37 p.s.f. from $40.73 p.s.f.

To read the full report, click here.

 

Q2/19 Downtown Chicago Office Market Report

Bradford Allen is pleased to share our Q2/19 office market reports. This quarter, in the downtown office market:

  • Net absorption was positive 796,185 s.f. for the quarter and positive almost one million s.f. year to date.
  • Year over year, direct availability dropped from 14.7% to 14.1%, and the direct vacant/available rate dropped from 10.5% to 9.4%.
  •  Year over year, gross average asking rates climbed to $41.79 p.s.f. from $40.73 p.s.f.

To read the full report, click here.

 

Mid-Year 2019 Suburban Chicago Office Market Report

Bradford Allen is proud to release our Mid-Year 2019 Office Market reports. This year, in the suburban office market:

  • Net absorption was negative 147,587 s.f. for the quarter and negative 613,681 s.f. year to date.
  • Direct availability and vacant and available stood at 25.11% and 19.16%, respectively.
  • Overall, the direct asking rate was $24.76 p.s.f.
  • Lake County unemployment dropped from 3.8% to 3.4%; DuPage County rose to 2.8% from 2.6%; and Cook County rose to 3.6% from 3.4%, year over year.

Download the full report here.

 

Q1/19 Downtown Office Market Report

This quarter, in the downtown office market:

  • Direct absorption was positive 371,026 SF, with total absorption up 477,105 for the quarter.
  • Direct availability dropped from 13.97% to 13.90%, and direct vacancy dropped from 11.89% to 11.63% from last quarter.
  • From Q4/18 to Q1/19, direct asking rents increased across all building classes, most notably in Class A, where they increased from $43.67 to $44.62. Direct asking rents in Class B increased from $35.88 to $36.07, and Class C rents increased from $29.27 to $29.59.

To read the full report click here.

 

Year-End 2018 Suburban Chicago Office Market Report

 As 2018 came to a close, the suburban office market continued its multi-year trend of shrinking vacancy and record investment sales. Direct availability and vacancy both fell from 21.60% to 20.41% and 17.06% to 16.52%, respectively, while direct weighted asking rents climbed to $24.38 from $23.59, year over year. The 2018 year-end total space absorption was a net positive 438,780 sf. 

 

To read the full report click here.

 

Q4/18 Chicago Downtown Office Market Report

At 2018’s year end, Chicago’s CBD office market maintained its upward pace with 94,341 sf of positive absorption for the quarter, and over 2 million sf of positive absorption for the year. Similar to last quarter, direct availability dropped from 15.23% to 13.97% and direct vacancy dropped from 12.18% to 11.89%, year over year. From 3Q18 to 4Q18, direct asking rents increased from $40.16psf to $40.51psf, a new record-high asking rate.

 

To read the full report click here.

 

Q3/18 Downtown Chicago Office Market Report

The buoyancy of Chicago’s downtown office market continues into the third quarter with a positive absorption of over a quarter million square feet, totaling over two million square feet absorbed in 2018. In addition, year over year, direct availability dropped from 14.99% to 14.11% and direct vacancy dropped from 12.03% to 11.68% while direct asking rents increased from $38.68psf to $40.16psf, a new high-record asking rate.

 

To read the full report click here.

 

Mid-Year 2018 Suburban Chicago Office Market Report

As the federal government tries its best to monitor growth and stem inflation (see box below), local village and city economies continue on their paths to recovery from the great recession which began over a decade ago. Quietly and assuredly, overall direct suburban vacancy and availability rates compressed over the past year from 19.45% to 17.06% and 21.35% to 21.25%, respectively, while gross asking rents increased by almost a dollar and half to $24.24psf. Although the first half of 2018 saw only 2.5 million sf of leasing deals inked, it also witnessed its first string of three, consecutive, half-way marks/six-month periods of positive net absorption since 2013 with 456,280 sf added to the metro’s ledgers*.

To read the full report click here.

 

Q2/18 Downtown Chicago Office Market Report

At the mid-year 2018, Chicago’s downtown office market exhibited the traits of equilibrium. Restraining the economic giddiness of increased employment and consumer confidence is the passing of the second of four promised interest-rate increases for 2018. The real success of this quarter’s office market, however, is how it responded after almost two million sf of space was added to the urban core’s ledger since the beginning of the year. To support this claim of confidence, Chicago’s CBD posted 1,713,755 sf of positive absorption, YTD, with 60% of all leasing transactions occurring in 2Q18.

 

To read the full report click here.

 

Q1/18 Downtown Chicago Office Market Report

The first quarter began with a plethora of positive economic and confidence indicators for Chicago and the nation (see box below), including Site Selection magazine choosing Chicago for the fifth year in a row as the top metro for potential corporate growth. These all point to a continuing demand for office space acquisition and expansion. The question remains, however, does the current and pending demand for office space necessitate the supply of the one million square feet added over the course of 2017 and the pending three to five million square feet projected to deliver to the urban core over the next three years?

 

To read the full report click here.

 

Year-End 2017 Suburban Chicago Office Market Report

Chicago’s suburban office market suffered its fair share of hits over the past few years but seems to be on an upward trend. After struggling early in the year, the market ends 2017 with a positive net absorption of over 1.4 million sf, in which 1.65 million sf was added during the fourth quarter alone. Direct vacancy and availability rates compressed from mid-year’s 19.7% and 22.6% to the year end’s postings of 18% and 21.5%, respectively.

 

To read the full report click here.

 

Q4/17 Downtown Chicago Office Market Report

As 2017 closed out, Chicago’s downtown employment base was growing and the economy was largely still in expansion mode from the last serious contraction in 2010. The office market responded to these conditions with assurance yet also with hesitancy. The fourth quarter posted a slight, direct vacancy uptick of 0.27% to 12.07% and a stable direct availability of 15% compared to 2017’s third quarter.

 

To read the full report click here.

 

Third Quarter 2017 Chicago Downtown Office Market Report

Corporate executives and eager developers tout the draw of downtown Chicago to recruit talent and consummate deals. Some sectors, notably tech, echo their enthusiasm through the numbers: almost 30% more new-lease and lease-expansion transactions occurred in 2017’s third quarter compared to the second quarter, coupled with a modest drop in direct availability from 15.6% to 15.0%.

 

To read the full report click here.

 

Second Quarter 2017 Chicago Downtown Office Market Report

With two million square feet under active construction and another proposed eight million square feet possibly materializing within Chicago’s Central Business District (CBD) over the next three years, it is no wonder the downtown office market is showing signs of overdevelopment strain, particularly in the West Loop.

 

To read the full report click here.

 

Mid-Year 2017 Chicago Suburban Office Market Report

At its core, Chicagoland’s suburban office market underpinnings are strong. Excellent access to Chicago, O’Hare, Midway, cutting-edge research in diverse industries, prized public school systems, and investment capital shall remain a draw for companies to ply their trades and families to call home.

 

To read the full report click here.

 

First Quarter 2017 Chicago Downtown Office Market Report

During the first quarter of 2017, 150 North Riverside officially opened and welcomed Polsinelli, Studley and Linden Capital as tenants. In the largest deal of the quarter, Context Media signed a lease for 400,000 square feet at 515 North State Street.

 

To read the full report click here.

 

Fourth Quarter 2016 Chicago Downtown Office Market Report

This quarter one of Chicago’s two new office towers opened its doors to tenants, 444 West Lake welcomed tenants taking occupancy of roughly 140,000 square feet of the 1.1 million square-foot building. Vacancy ended the year at 11.0 percent.

 

To read the full report click here.

 

Year-End 2016 Chicago Suburban Office Market Report

Year-to-date net absorption dropped to negative 1.9 million square feet causing vacancy to climb to 19.2 percent. These weakening statistics were aided by the Zurich headquarters moving to its new headquarters as well as companies like Jim Beam and ConAgra moving from the suburbs downtown.

 

To read the full report click here.

 

Third Quarter 2016 Chicago Downtown Office Market Report

This quarter in the downtown market absorption reached 806,000 square feet aided by moves from WeWork and Motorola. Thanks to this positive absorption vacancy dropped to 11.5 percent, this is the sixth consecutive quarter of positive growth. Rental rates remained steady, declining a nominal $.09 to $36.14.

To read the full report click here.

 

Mid-Year 2016 Chicago Suburban Office Market Report

This quarter in the suburban market major leases signed by Paylocity, US Cellular and Combined Insurance helped leasing activity for the suburbs reach over 2.5 million square feet. Absorption dropped following Kraft Heinz’s move out of 650,000 square feet in the North Central region. Oak Brook based McDonald’s announced that they too would be moving operations downtown, relocating to the former Harpo Studios in Fulton Market.

 

To read the full report click here.

 

Second Quarter 2016 Chicago Downtown Office Market Report

This quarter in the downtown market absorption reached 262,000 square feet aided by moves from ConAgra and ACGME. Thanks to this positive absorption vacancy dropped to 11.9 percent, the third consecutive quarter since 2008 to reach that low. Rental rates remained steady, declining a nominal $.17 to $36.23.

 

To read the full report click here.

 

First Quarter 2016 Chicago Downtown Office Market Report

The downtown Chicago office market started 2016 off with a flurry of strong activity. Large deal transactions included CNA’s announcement of its relocation to 151 North Franklin for 227,0000 square feet and Cars.com’s transaction to move into 158,000 square feet at 300 S Riverside.

The vacancy rate dropped to 12.0% thanks to over 230,000 square feet of positive absorption. The East Loop contributed the most to this number, with Clark Hill and McDermott, Will & Emery both moving into Prudential Plaza for a total of over 120,000 square feet.

Rental rates remained steady with the direct gross average asking rate ending the quarter at $36.40. A four percent growth year-over-year.

Click here to read full report

 

Fourth Quarter 2015 Chicago Downtown Office Market Report

Downtown Market Vacancy Continues to Decrease, Asking Rates Increase and Investment Sales Surge

Chicago’s downtown office market is continuing to tighten, for the moment. The overall vacancy rate has decreased from 13.1% to 12.8% from year-end 2014 to year-end 2015. This is the lowest it has been since 2Q 2009. As expected, Chicago’s unemployment rate continued to improve over the course of 2015 as well. Chicago’s unemployment rate dropped from 6.2% at the end of 2014 to 5.4% at year-end 2015.

 

Click here to read the full report

 

Year-End 2015 Chicago Suburban Office Market Report

Suburban Markets Prove Resilient, Availability and Vacancy Rates Drop

The Suburban office market maintained the positive momentum it saw in 2014 through the end of 2015 despite the continued migration of large tenants to the CBD. 2015 saw 951,311 sf of positive net absorption which surpassed the 704,910 sf of positive net absorption in 2014. The vacancy rate decreased from 17.5% to 17.1% and the availability rate decreased from 23.2% to 23.1% year over year, respectively.

Click here to read the full year end report

 

Third Quarter 2015 Chicago Downtown Office Market Report

Chicago Office Market Continues to See Positive Absorption and Rising Rates

Chicago’s downtown office market continues on a steady path. Despite overall vacancy in the CBD increasing slightly to 12.8% from last quarter’s 12.6%, it remains below last year’s 13%. While seeing negligible change in vacancy, unemployment in both Illinois and throughout the country continues down the path of improvement. According to the Bureau of Labor Statistics, US unemployment is at its lowest rate since April 2008 at 5.1% and Illinois is at its lowest rate since February of 2008 at 5.6%.

Click here to read the full report

 

Mid-Year 2015 Chicago Suburban Office Market Report

Suburban Office Market Continues to Strengthen; Vacancy and Availability Rates Decrease

The Suburban office market continued to improve going into the 3Q of 2015. The vacancy rate decreased from 18.9% to 17.8% and the availability rate decreased from 24.4% to 22.3% year over year, respectively. While YTD net absorption is essentially flat at negative 27,182 SF thru the mid-year, it is significantly better than the negative 518,096 thru mid-year 2014. Overall these statistics indicate that the suburban market is becoming healthier and more dynamic.

Read Full Market Report Here

 

Second Quarter 2015 Chicago Downtown Office Market Report

Downtown Market Approaches Equilibrium as the Vacancy Rate Continues to Decrease and Asking Rates Increase

Chicago’s downtown office market is continuing to become tighter. The overall vacancy rate has decreased from 13.4% to 12.6%, year over year. This is the lowest it has been since the end of 2008 and now brings the market almost to equilibrium. Simultaneously Chicago’s unemployment rate continued to improve in the second quarter. According to the Illinois Department of Employment Security, Chicago’s unemployment rate decrease from 7.7% in May 2014 to 6.7%, May 2015.

Read Full Market Report Here

 

First Quarter 2015 Chicago Downtown Office Market Report

Downtown Market Experiences a Slight Uptick in Vacancy; Still an Overall Positive Tone

Chicago’s downtown office market saw the vacancy rate increase this quarter for the first time since 2013. The slight increase from 13.1% in Q4 2014 to 13.3% was attributable to the BMO Harris relocation/contraction and downsizing of showroom tenants at 311 W. Monroe and the Merchandise Mart, respectively. Please note however the vacancy rate of 13.3% is well below the 14.0% in Q1 2014.

Read Full Market Report Here

 

Year-End 2014 Chicago Suburban Office Market Report

Suburban Office Market Sees Vacancy and Availability Decrease and a Bifurcation Taking Place

The suburban office market saw multiple statistical improvements to end the year. The overall vacancy rate decreased from 18.9% Mid-Year to 17.5%. Availability also decreased from 24.4% at Mid-Year to 23.2%. Even though a large tenant migration to the CBD occurred earlier in 2014, the suburban office market was able to record 929,540 SF of positive absorption for the year. These statistical improvements have led to a healthier suburban office market.

Read Full Market Report Here

 

Fourth Quarter 2014 Chicago Downtown Office Market Report

Chicago Office Market Continues to Heat Up

The Chicago economy continues to show signs of improvement as the unemployment rate in the metropolitan area decreased from 8.7% to 6.3% year over year. This translated into a healthier downtown office market with the vacancy rate decreasing from 14.1% to 13.1% year over year. Attributing to this was net absorption for the year of 1,141,848 SF. Vacancy however did increase slightly from 13.0% last quarter due to the former Chicago Public Schools (CPS) office building being added to the downtown inventory.

Read Full Market Report Here

 

Third Quarter 2014 Chicago Downtown Office Market Report

Vacancy and Availability Rates Continue to Decrease in Downtown Office Market

The downtown office market continues to decrease in vacancy and availability this quarter as net absorption is now over 1 million square feet for the year. Chicago’s economy has continued to improve as the unemployment rate decreased to 7.4% in August compared to 10.7% a year earlier. This decrease is the largest annual unemployment rate decline since September of 1994 (-3.5%). Overall this is translating into a tighter Chicago office market with vacancy and availability rates at 13.0% and 16.4% compared to 2013 Q3 numbers of 13.8% and 17.8%, respectively.

Read Full Market Report Here

 

Mid-Year 2014 Chicago Suburban Office Market Report

Suburban Office Market: Vacancy and Availability Numbers Don’t Tell True Story

The suburban Chicago office market saw mixed statistical conditions during the first part of the year. Demand improved significantly in 2Q. 493,984 SF of net absorption was recorded decreasing YTD net absorption to -518,096 SF. This positive absorption in 2Q was not enough to decrease the vacancy rate, as it stands at 18.9% overall compared to 18.6% at year-end 2013. However, these current statistical conditions do not tell the entire story in suburban Chicago. Another large tenant migration to the CBD had a great impact on the overall vacancy and availability numbers since year-end 2013. Taking out the single 1,121,186 SF that Motorola left vacant, the net absorption for the year would jump to 603,090 SF; a very positive statistic.

Read Full Market Report Here

 

 

Second Quarter 2014 Chicago Downtown Office Market Report

Downtown Office Market Recovery Speeds Up As Multiple Tenants Sign Expansions

Chicago’s office market and the economy improved again this quarter. Despite a surprise contraction in 1Q GDP growth, the unemployment rate hit a low this June. National and statewide unemployment rates dropped to 6.1% and 7.9%, respectively. Both of these rates haven’t been this low since 2008. The improving economy correlated into vacancy and availability rates decreasing YOY from 14.1% and 18.4% to 13.4% and 16.6%, respectively.

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First Quarter 2014 Chicago Downtown Office Market Report

Outside Corporations and Technology Tenants Continue to See Value in Chicago CBD

Overall conditions in the CBD office market tightened during the 1st quarter as certain economic indicators improved. Although GDP growth for the U.S. is slow, the country’s unemployment rate has continued to drop. Chicago’s fell to 9.9% in February – the lowest since February 2009. While this rate is relatively high compared to New York City and other metros; it’s still a good sign for Chicago’s economy. This translated into CBD vacancy and availability decreasing year over year from 13.9% to 13.5% and 18.1% to 17.3%, respectively.

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Fourth Quarter 2013 Chicago Downtown Office Market Report

Overall Growth Stalls; Although West Loop, River North and Class C Space Tightens Up

Economic improvement in Chicago’s CBD office market continued slowly at the close of 2013. Uncertainty regarding interest rates and the effects of the Affordable Care Act continued to hamper momentum. Subject to these conditions, the Chicago CBD also improved slowly. Overall availability reached 16.4%, almost on par with last year’s 16.5%, and overall vacancy decreased to 12.5%, down slightly from 12.7% in 2012. Quarterly net absorption totaled -245,211 SF versus last year’s 298,126 SF, while yearly net absorption reached -17,920 SF compared to 794,398 SF in 2012. Although the business environment is improving overall, the trend to downsize square footage per employee and its effect on overall office size is a factor driving in negative net absorption for the year.

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Year-End 2013 Chicago Suburban Office Market Report

Chicago Suburban Year-End Market Report 2013

Class A Suburban Improvement Continues as Single-Tenant Listings Keep Vacancy High

Suburban availability and vacancy both rose YOY to end 2013 at 23.8% (up from 23.6%), and 18.6% (up from 17.3%), respectively. Although data suggest worsening conditions, Class A buildings and certain submarkets are improving. Availability and vacancy of Class A space in the Eastern East-West corridor both decreased, reaching 24.2% versus 29.3% of a year ago, and 20.5% versus 21.3% in 2012. The North Suburbs also continued to improve as availability and vacancy rates dropped to 18.8% from 19.2% and 12.2% from 13.4%, respectively. The Central-North micro market shows the lowest vacancy and availability of all the North Suburbs at 8.3% and 15.9%
 

Third Quarter 2013 Chicago Downtown Office Market Report

Improving Trend Continues as Downtown Chicago Office Market Records Positive Net Absorption

The downtown Chicago office market continues to improve. This is being driven by steady demand from tenants looking for CBD locations that can help them attract talent. This theme has been in play for several years now and is illustrated by both suburban and out-of-area employers relocating to downtown Chicago. It was again evident during the third quarter with the announcement that AT&T was relocating 500 workers from the Northwest suburbs to their office at 225 West Randolph Street.

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Second Quarter 2013 Chicago Downtown Office Market Report

Statistics Remain Stable as Downtown Chicago Office Market Continues to Attract Strong Interest

By most statistical measures, the downtown Chicago office market has remained relatively unchanged for much of the first half of 2013. During the second quarter, the availability rate increased fractionally to 16.7%, while the overall vacancy rate remained unchanged at 12.6%. However, both these metrics illustrate improvement as compared to the previous year. In general, there continues to be a strong bid for quality space, and there have been many cases of both suburban Chicago and out-of area tenants canvassing for space and relocating to downtown Chicago.

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Mid-Year 2013 Chicago Suburban Office Market Report

Chicago Suburban Mid-Year Market Report 2013

Improving Suburban Chicago Office Market Remains Tighter Than Statistics Suggest

The suburban Chicago office market continued to improve during the first six monthsof the year. The overall, direct vacancy and sublease availability all slightly decreased to 18.3%, 17.4% and 2.7%, respectively. Although, the overall vacancy remains elevated at 18.3%, the real dynamics reflect those of a much tighter market, perhaps one with a vacancy rate as low as 13%. A good portion of the space that sits physically vacant today is “The Last Mile” of space—perhaps 5-10% of any given property—where landlords have a diminished desire to be aggressive to get the last deals done. As a result, this skews the overall statistics.
 

First Quarter 2013 Chicago Downtown Office Market Report

Positive Underlying Tone Continues to Characterize Downtown Chicago Office Market

The downtown Chicago office market finished the year on a positive note, and although the pace of improvement has leveled off, the market remains stable with a strong underlying bid for quality space. Overall vacancies declined nominally early this year and ended the first quarter at 12.6%. Stepping back to look at the broader trend, virtually all key market metrics have improved over the past 12 to 18 months. This continues to evidence a slow improving trend since the global economic crisis.

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First Quarter 2013 Chicago Suburban Office Market Report

Suburban Chicago Office Market Signals Steady—Albeit Slow—Improvement

Transaction activity within the suburban Chicago office market was relatively steady to begin the year, and a healthier tone continues to characterize the overall suburban market. Although the vacancy rate edged up during the first quarter from 18.3% to 18.6%, there continues to be ample interest from tenants for high quality space. Many tenants have been motivated to upgrade their space rather than renew, particularly in situations where attractive rents and/or concessions can help offset relocation costs.
 

Fourth Quarter 2012 Chicago Suburban Office Market Report

Momentum Continues Building for the Improving Suburban Chicago Office Market

Transaction activity within the suburban Chicago office market accelerated during the second half of the year, and 2012 finished on a positive note. This improvement was echoed in most of the major market statistics, particularly the vacancy and absorption rates. The overall vacancy rate declined and ended the year at 17.3% as compared to 19.3% at the 2011 year end. The strong leasing activity in the fourth quarter also resulted in more than 450,000 SF of positive net absorption, bringing the full year positive net absorption to more than 1.2 million SF.

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Fourth Quarter 2012 Chicago Downtown Office Market Report

Downtown Chicago Office Market Ends 2012 on the Upswing

Despite all the challenges and questions facing the economy, there’s no denying that the downtown Chicago office market has been on the mend and finished the year on a positive note. Overall vacancies declined one full percentage point from the third quarter and ended 2012 at 12.7% down from 13.3% in 2011. This is the lowest year-end vacancy rate since the global economic crisis.

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Third Quarter 2012 Chicago Suburban Office Market Report

Third Quarter Transaction Activity Heats Up In Suburban Chicago Office Market

After cooling off during the first half of 2012, activity within the suburban Chicago office market accelerated during the third quarter. The increased confidence among large tenants was evidenced in a spate of noteworthy transactions. This was driven largely by a continued trend toward quality space where tenants are locking-in Class A locations at attractive pricing. The improving suburban office market conditions were illustrated by several key market metrics.

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Third Quarter 2012 Chicago Downtown Office Market Report

Downtown Chicago Office Market Holds Steady, But Demand Points to Further Improvement Ahead

The downtown Chicago office market ended the third quarter with overall availability and vacancy rates of 17.1% and 13.7%, respectively. Compared with the second quarter both are minor increases which can be attributed to the stagnant economic recovery and firms reducing their square footage to maximize space efficiency. Conversely, a side by side analysis of third quarter 2011 and third quarter 2012 shows improvements in most major metrics—asking rate, net absorption and overall vacancy—demonstrating increased stability in the office market.

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Second Quarter 2012 Chicago Suburban Office Market Report

Suburban Chicago Office Market Cools Off During First Half of 2012

The suburban Chicago office market hit a plateau during the first half of 2012. The overall availability rate has remained unchanged from the first to the second quarter of 2012, resulting in a mid-year figure of 27.3%. This remains slightly higher than the 26.8% statistic at year-end 2011. The overall vacancy rate also remained stable during the second quarter at 23.2%.

During 2011 there were many large tenant relocations that reflected both pent up demand coming out of the financial crisis, as well as the plentiful availability of attractive second-generation space. In many cases, this space was not only well located in Class A buildings, but it also included furniture and upgraded wiring. This added significant appeal and helped motivate tenants to make longer-term commitments.

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Second Quarter 2012 Chicago Downtown Office Market Report

Slight Improvement for Downtown Chicago Office Market 

The status quo remains, with the second quarter statistics for the downtown Chicago office market. This is especially true in the context of our current macroeconomic environment that seems perpetually on the edge of crisis.

Throughout the first six months of the year, the overall availability rate in the Chicago CBD office market has remained relatively unchanged, ending the second quarter at approximately 16.9%. Not surprisingly, the downtown vacancy rate also held steady at 13.2%. Although leasing activity has leveled off to a solid (if unspectacular) pace during the first two quarters of 2012, the year-over-year trend in the downtown office market continues to be positive.

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First Quarter 2012 Chicago Downtown Office Market Report

Steady first quarter for downtown Chicago office market  

As 2011 drew to a close, the recovery in the downtown Chicago office market gained momentum, and the year ended on a positive note. Although activity was not quite as robust during the first quarter as compared to the flurry of activity in late 2011, the overall CBD market still appears to be headed in the right direction. Tenants canvassing for space seem more confident and more willing to make commitments, perhaps echoing the string of upbeat economic indicators and the sharp rally in the domestic equity market during the first three months of the year. Particularly encouraging were the labor market statistics which showed several months of job creation and a declining unemployment rate. For now, continued employment gains will be the key metric that will likely determine the strength of the office market recovery.

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First Quarter 2012 Chicago Suburban Office Market Report

Suburban Chicago office market takes a breather during first quarter 2012

The suburban Chicago office market ended 2011 on a high note, perhaps compensating for several years of pent up demand. As we previously reported, the overall tone of the market was much healthier despite a lingering supply and demand imbalance. Corporate tenants showed decidedly more confidence in making real estate commitments, and that was reflected in the more robust 2011 transaction activity.

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Fourth Quarter 2011 Chicago Downtown Office Market Report

2011 finishes on a positive note as the Downtown Chicago office market extends gains 

Without question, 2011 was a year of improvement for the downtown Chicago office market.  Certainly challenges remain, but the overall tone has improved with the re-emergence of stronger demand. In fact, the improvement appears to have accelerated during the fourth quarter as several key metrics posted strong gains.

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Fourth Quarter 2011 Chicago Suburban Office Market Report

Improved demand fuels optimism for Suburban Chicago office market

In contrast to the two years immediately following the global financial crisis, the suburban Chicago office market ended 2011 on the upswing. Stronger demand and a healthier overall tone have the real estate community feeling decidedly more optimistic about a genuine recovery.

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Third Quarter 2011 Chicago Downtown Office Market Report

Downtown Chicago office market recovery continues, but it’s a slow and uneven climb

Despite the spate of disappointing leading economic indicators and persistently high unemployment, the Chicago office market appears to be moving in the right direction, albeit slowly. The overall availability rate in Chicago’s central business district (CBD) remains elevated at 18.4%, but there are some other important statistical measures that offer reasons for cautious optimism.

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Third Quarter 2011 Chicago Suburban Office Market Report

Status quo for the Suburban Chicago office market

The third quarter served up more of the same for the suburban Chicago office market. That’s not necessarily all bad news, but the move back to equilibrium looks to be progressing at a glacial pace. The overall availability rate has shown little fluctuation throughout 2011 and ended the third quarter at 27.3%. The direct vacancy rate actually inched back up slightly to 24.6% from 24.2% at mid-year.

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Second Quarter 2011 Chicago Downtown Office Market Report

Downtown Chicago office market continues to exhibit slow, steady improvement during the second quarter

Reflecting a continued slow recovery in the broader economy, the downtown Chicago office market offered up some good news during the second quarter. The availability of direct and sublease space declined during the quarter, and a slight firming of demand helped push down both direct and sublease vacancies. Certainly the level of demand is not robust enough to drive up rental rates materially, but at the same time it is encouraging to see the slow improvement materialize as we recently forecasted. Still, the market remains out of balance favoring tenants as ample supply exists in virtually all downtown locations and across most tiers of space.

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Second Quarter 2011 Chicago Suburban Office Market Report

Overall tone of suburban Chicago office market slowly improves, but market dynamics still favor tenants

From the perspective of transaction activity and general interest in suburban Chicago office space, it is clear that the market has stabilized and improved since the depths of the financial crisis. However, the recovery continues to be slow and uneven. Overall demand and availability rates have not returned to pre-crisis levels. There continue to be some positive signs in the market, but the second quarter showed little material change as compared to the first quarter. The overall vacancy rate improved slightly and ended the second quarter at 23.0%.

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First Quarter 2011 Chicago Downtown Office Market Report

Bouncing along the bottom: Downtown office market remains stable as it grinds through sublease space

The encouraging streak of recent quarters of positive net absorption did not continue during the first quarter, but we do not think this portends any real deterioration in the market. In fact, we continue to believe that the overall Chicago office market bottomed in early 2010, and any prolonged economic improvement will ultimately be reflected in the statistics over the medium term.

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First Quarter 2011 Chicago Suburban Office Market Report

Signs of slow improvement continue to emerge in suburban Chicago, particularly in Class A Space

Although the Chicago suburban office market appears to have stabilized, there is no escaping that significant excess supply, both direct and sublease space, continues to overhang the market. The good news is that leasing activity, which re-emerged and accelerated last year, helped stem the deterioration in market fundamentals. It was encouraging to see that trend continue early this year. A healthier level of demand was evident throughout the first quarter, which helped push the overall availability rate down to 27.3%, which is an improvement from the year-end availability rate of 28.1%. The direct vacancy rate ended the quarter at 23.3%.

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Fourth Quarter 2010 Chicago Downtown Office Market Report

Year-end conditions show mixed results, but signs are pointing to a slow recovery

The commercial office market in Chicago’s central business district (CBD) appears to have bottomed out in 2010. The overall annual net absorption rate (the net change in occupied space) and increased sales activity seem to indicate a slowly reviving market. Annual net absorption turned slightly positive in 2010 in contrast to the over 2.3 million SF of negative net absorption recorded at the end of 2009.

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Fourth Quarter 2010 Chicago Suburban Office Market Report

Despite sluggish leasing market, market fundamentals show signs of stabilization

The Chicago suburban office market appears to have reached its bottom in 2010.  The overall annual net absorption (the net change in occupied space) and the year-to-date leasing activity seem to indicate that the market has begun to slowly recover.  Annual net absorption was essentially flat in 2010, but still a clear reversal of the downward trend experienced in 2009, when the year ended with over 2.3 million square feet of negative net absorption.

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Second Quarter 2010 Chicago Downtown Office Market Report

Office Market Continues to Show Signs of Stabilization
Investor confidence revisits the marketplace

Vacancy Starts to Stabilize
Indicators show the Central Business District (CBD) is steadying as we navigate the bottom of the downturn. Overall vacancy decreased nominally in the sec ond quarter to 15.9%, from 16.0% posted in the first quarter, but still higher than the 15.0% overall vacancy rate at the beginning of the year. Sublease vacancy saw a decline as well, to 1.8%, a 0.1 percentage point decline from first quarter, and a 0.3 percentage point decrease over the first half of 2010.

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Second Quarter 2010 Chicago Suburban Office Market Report

Office Market is Navigating Bottom of Downturn
New buyers help spur office sales as asset prices are established

Available Space Starting to Steady
Declining availability is one indication the Chicago suburban office market is approaching, or is at the bottom of, the downturn that began in 2008. Overall availability, following eight consecutive quarters of raises, declined for the second straight quarter to 26.1%, a 0.3 percentage point decrease from the first quarter and a 1.0 percentage point drop since year-end 2009. Sublease space declined as well, to 2.3%, down from 2.5% in first quarter, and 2.7% from the end of 2009. The potential stability is positive for this market that has been in bad shape since the downturn started; however for availability to consistently decline, large office users will have to re-emerge in a market currently driven by users requiring 10,000 square feet (sf) or less.

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First Quarter 2010 Chicago Downtown Office Market Report

Has The Market Stabilized?
Market indicators still lagging economic optimism

Vacancy Continues to Rise
The overall vacancy rate in the Chicago Central Business District (CBD) rose to 16.0% for the first quarter of 2010, a 4.4 percentage point jump over the first quarter of 2009, and a 1.0 percentage point jump over the year-end 2009 rate of 15.0%. This is the highest overall vacancy rate in the CBD since the third quarter of 2005 when it reached 15.9%.

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First Quarter 2010 Chicago Suburban Office Market Report

Indicators Show Bottom Is Near
Certain micro-markets begin to show turnaround

Vacancy Continues to Rise
Overall vacancy in the suburban market rose to 24.0% in the first quarter of 2010, a 2.6 percentage point increase compared to the same time in 2009 and a 0.3 percentage point rise since year-end 2009. The North Suburbs has been hit the hardest over the last year, measuring a 5.7 percentage point increase to 21.9% when compared to first quarter 2009. Meanwhile, the Northwest Suburbs has fared the best with a modest gain in vacancy, increasing 1.9 percentage points to 26.1% when compared to first quarter 2009.

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Fourth Quarter 2009 Chicago Downtown Office Market Report

CBD Downturn: Have We Hit Bottom?
Market turnaround expected to take place in 2011 

New Construction Adds to Increase of Available Space
Overall availability in the Chicago Central Business District (CBD) rose to 17.8% at year-end 2009, a 6.4 percentage point increase compared to the same time last year, marking the highest percentage available in four and a half years. Availability in the River North submarket increased 6.8 percentage points in 2009. This was the largest jump in a CBD submarket with a large portion resulting from the completion of 300 North LaSalle Street and 353 North Clark Street during the year.

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Fourth Quarter 2009 Chicago Suburban Office Market Report

Market Downturn Creates Opportunities for Tenants
Suburban market downturn likely to last through 2010

Year-End Vacancy Highest of Decade
Overall vacancy in the suburban market rose to 17.7% in the fourth quarter of 2009, a 1.9 percentage point increase compared to the same time in 2008. The Northwest Suburbs submarket was hit the hardest, measuring a 3.1 percentage point increase to 18.7% when compared to the previous year. While overall vacancy in the suburban market is still on the rise, sublease vacancy reported a 0.1 percentage point decrease in 2009 indicating the bottom could be near. This is a positive sign for a market largely hit by corporate downsizing and consolidations.

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Second Quarter 2009 Chicago Downtown Office Market Report

CBD Downturn Slows Its Pace
As the market downturn decelerates, more tenants are entering the market early to examine their options. Are we approaching the bottom?

Downturn continues – but is not accelerating
CBD rental rates moved lower and the trend points to a continuing drop through the year, but at a slower rate. The current average gross asking rate, $28.97 per square foot is a $0.62 drop from first quarter when the average gross asking rate was $29.59 per square foot. The previous quarter saw a drop of $0.52 per square foot.
The second quarter 2009 year-to-date net absorption is negative 2,157,607 square feet. In contrast, the second quarter of 2008 year-to-date net absorption was positive 1,290,948 square feet.

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Second Quarter 2009 Chicago Suburban Office Market Report

A Slow Road to Recovery in the Suburbs
With available space at an all time record, office space bargains are everywhere.  Vacancy is likely to rise slightly over the next few quarters during the recovery.

Rental Rates Hold Steady
Asking rental rates in the suburban market have held nearly even with last quarters’ rates. The second quarter gross average asking rental rate of $20.57 represents a rise of four cents per square foot over the first quarter. With record availability rates and continued layoffs throughout the suburbs, rates are likely to continue to drop.

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First Quarter 2009 Chicago Downtown Office Market Report

CBD Downturn Continues
Chicago’s CBD office market downward trend picks up the pace and is unlikely to show signs of recovery before 2010.

Rental Rates Moving Lower
CBD rental rates moved lower and the trend points to a continuing drop through the second quarter. The current average gross asking rate, $29.59 per square foot, represents a 1.7% reduction from the fourth quarter average gross asking rate of $30.11 per square foot. Many landlords are agreeing to rents more than 10% below their asking rates, as well as offering more generous concession packages. All indications are that asking rents will continue to fall through 2009 while concessions such as rent abatements and tenant improvement allowances will continue to increase.

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First Quarter 2009 Chicago Suburban Office Market Report

Market Continues to Decline
Rental rates continue to drop, and vacancies are increasing at a faster rate. With no signs of recovery before 2010, landlords offer larger concessions.

Rental Rates Are Dropping
Asking rental rates in all suburban submarkets continue to drop as Landlord’s adjust to the new economic climate and compete against the growing flood of sublease space . The first quarter gross average asking rental rate of $20.53 represents a drop of nearly $0.50 per square foot over the last three quarters. As layoffs increase and sublease space continues to rise over the next few months, asking rates are likely to drop further.

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Fourth Quarter 2008 Chicago Downtown Office Market Report

CBD Downturn Has Begun
Chicago’s CBD office market shows clear indications of a downturn,which is likely to last through 2009.

Rental Rates Are Dropping
After two years of steady increase, CBD rental rates are dropping, and show signs of dropping further in 2009. While the current average asking rate, $30.11 gross per square foot, is nearly even with the third quarter average asking rate of $30.13, landlords are signing leases at lower rates and offering increased concession packages. If the next two quarters do not produce new leases, asking rates are likely to drop as well.

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Third Quarter 2008 Chicago Downtown Office Market Report

CBD Market will Decline through 2009
While the Chicago’s CBD office market remains strong, activity has slowed, rates are dropping, and market is poised for a downturn

Flattening Rental Rates
The current average asking rate, $30.13 gross cost per square foot, is slightly down from last quarter’s all-time high of $30.16, and ends 6 consecutive quarters of increasing rates.  Asking rental rates are likely to hold steady for the next few months, as landlords wait to see what impact the ongoing financial crisis will have on the Chicago market.

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Second Quarter 2008 Chicago Downtown Office Market Report

Rents Hit Another Record High
Leasing activity was strong in the 2nd quarter, but a struggling economy,new construction and increasing sublease supply point to a downturn.

Record Rental Rates
The current average asking rate, $30.15 PSF Gross, is another record high, and the 6th consecutive quarterly increase in rates. Rental rates will continue to rise over the next few quarters, and are not likely to drop before several quarters of poor performance force landlords to modify their expectations.

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First Quarter 2008 Chicago Downtown Office Market Report

Market will Remain Tight Through 2008
While tenants are slowing their leasing activity to see if better terms will be available later this year, vacancy remains low and rents continue to rise.

In contrast to clear indications of recession in other parts of the country, the Chicago downtown offi ce market continues to look healthy. Leasing activity over this quarter was slower than in the 4th quarter of 2007, but tenants are not putting space back on the market. Available sublease space, an early indicator of a change in the leasing market, took another drop to 1,333,173 square feet, its lowest point since 2nd quarter of 1999. Rental rates are at an all-time high, and continue to rise.

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