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Chicago Market Reports

Chicago Office Market

Average Asking Rent (Price/SF)          $27.47
Vacancy Rate (%)           17.4%
Net Absorption (SF)        928,987

During the fourth quarter of 2017, the Chicago office market started to see signs of a market slowdown. At a metro level, year-to-date absorption was 2.1 million square feet, sending vacancy down 40 basis points to 17.4%, the lowest it has been in 2017. Rental rates increased 1.1% year-over-year to $27.47/SF. While the statistics show positive movement and tenant demand, a significant amount of the leasing activity was made up of consolidations or contractions as companies continue to economize workspace. This trend was also observed among tenants in the market, particularly amongst law and marketing firms, and the market can expect to see an uptick in shadow space heading into 2018. The new buildings being delivered to the Central Business District market have contributed to this trend as they have larger, open floor plates, which allow tenants to be more efficient with their employee-per-square-footage ratios. Investment sales activity has dipped as well, with buyers and sellers seeming to be on different pages in terms of pricing.

Chicago Industrial Market

Average Asking Rent (Price/SF)         $5.32
Vacancy Rate (%)            8.5%
Net Absorption (SF)     615,592

After years of declining vacancy, the Chicagoland industrial market had a second quarter of increasing vacancy to end 2017. Total vacancy jumped 40 basis points to 8.5%. Absorption was positive at 615,000 square feet, but significantly lower than average. This quarter marks the first time since 2011 that absorption hasn't been over a million square feet for a single quarter. Rental rates grew 1.3% for the quarter to $5.32/SF. The increase in vacancy this quarter can be attributed to the delivery of roughly 3.8 million square feet of speculative development. While the other indicators are positive, it does reflect a slowdown in what has been a very hot market.

Chicago Office Market Report
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Chicago Industrial Market Report
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Local Market Contact:

Amy Binstein

Research Manager