Chicago CBD office market report

Q1 2022

2022 picked up where 2021 left off with a continued, steady recovery of leasing activity and downtown foot traffic. Also continuing from last year is the demand for quality. Trophy and A+ quality assets continue to harbor most of the positive activity throughout the market while Class B and C continue to struggle. Driving commuters have returned in greater numbers than other forms of transportation as road traffic approaches pre-pandemic levels.

7.3 msf

Inventory

New construction continues to expand across the West Loop, River North and Fulton Market. BMO Tower at 320 S Canal opened its doors adding 1.4M sf to the West Loop market. Over 7.3M sf is proposed to hit the market by the end of 2025.

-848,582 sf

Net absorption

While overall CBD felt another negative quarter for net absorption, that was not the case for all segments. Fulton Market experienced over 350k sf of positive net absorption. Additionally, the Trophy/A+ quality market segment also felt positive net absorption of 180k sf. 

$44.09 FS

Direct asking rent

Class A space averaged $50.22 FS and Class B averaged $37.96 FS. Specifically, Class A space in Fulton Market was priced over $61 FS on average. 

38.1 msf

Available space

The growth at which new availability hit the market slowed this quarter. Total available sublease space still sits at 5.9 msf.

18.8%

Vacancy

Vacancy across the market increased to 16.9% for direct space as new product hit the market and certain tenants chose to downsize.

$605M

Capital markets

Most notably this quarter, 35 W Wacker Drive sold for $415M to Opal Holdings. Fulton Market still saw the highest per-square-foot sale prices in Q2.

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