Chicago CBD office market report

Q3 2024

The dichotomy of the Chicago CBD office market continued in Q3 2024, as high-quality, well-positioned buildings performed well while the lower-class segment of the market struggles. Capital market and construction activity remains nearly inactive as economic and sentimental constraints remain unfavorable for many investors, putting even more increased demand for fleeting high-quality space.

4.3 msf

Total leasing activity through Q1-Q3 2024

The first three quarters of 2024 have seen a smaller amount of leasing activity than the prior two years, down 25% from the same time last year. But with interest rates finally lowering and considering Q4 is historically the most active time of the year, there is optimism for increased recovery to close out 2024.

10.5%

Availability in post 2010 construction office buildings

The continued desire for high quality office space throughout the market has created a clear dichotomy between newly built, well-amenitized buildings and dated office product.

From Q3 2020 to now, availability in office product built before 2010 has risen from 16.2% to 27.6%. Over the same period, buildings built after 2009 have seen availability fall from 25% to 10.5%.

25%

Share of YTD leasing activity in River North and Fulton Market

The majority of office leasing is still conducted in the largest submarket of the CBD, the West Loop, accounting for 37% of YTD leasing activity. However, certain submarkets have seen disproportional shares of market leasing activity based on their inventory size.

The River North and Fulton Market submarkets, which collectively make up only 18% of the total CBD inventory, have accounted for 25% of this year’s leasing activity. Alternatively, the East Loop has accounted for only 9% of leasing activity despite representing 18% of total CBD inventory.

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