Newer Chicago Office Buildings Lead CBD Leasing Activity
While Chicago’s downtown office market is still facing challenges, newer buildings are showing that flight to quality remains an ongoing trend. More modern buildings, greater than 300,000 square feet, are faring better than neighboring offices in the city’s Central Business District, reported the Chicago Business Journal.
The district’s overall direct vacancy rate reached nearly 20 percent in the third quarter, but the last 20 Class A office buildings built in the district greater than 300,000 square feet had a direct vacancy rate of 5.6 percent, per Transwestern’s latest Office Market Index. As new buildings like Salesforce Tower Chicago emerge on the market, the draw for amenities and collaborative spaces for hybrid work sets newer offices and aging buildings apart.
Overall leasing activity remains lower throughout Chicago, with 1.3 million square feet directly leased in the quarter, down from the 2.6 million square feet quarterly average seen in prior years. According to a recent report by Transwestern, there are currently 389 sublease spaces available, representing a total of 8,263,693 square feet. This marks a new historic high after decreasing to 7,987,409 square feet in the September report.