2021 Q4 Chicago CBD Office Occupiers Guide
The year 2021 ended on a muted note in terms of vacancy for the downtown Chicago office market. In a year where vacancy records have been shattered, ending the year with an unchanged quarter to quarter rate of 18.1% can be viewed as a somewhat uneasy steadying-of-the-ship for downtown landlords. Class A space was the only type to see a reduction in vacancy, down to 13.3% as occupiers’ trend toward newer, amenity-rich space. Class B and C space continued to add vacancy, ending with rates of 21.5% and 19.1%, respectively. Lingering construction costs increased, and supply chain delays have continued to create headwinds for raw space buildouts and “turn-key” transactions. This has made spec suites and good-condition, second-generation space valuable options for occupiers in the market. Fulton Market continues to buck the trend with new, long-term leases being signed on practically a weekly basis. These deals include above-market concessions, but also the highest rental rates in the city. The steady vacancy rate is the result of Q4’s positive, albeit minimal, total net absorption since 2020 and the ensuing pandemic. Net absorption ended the quarter at 188,252 square feet. The majority of move-outs came from class B and C space centered around the West Loop. Despite that, class A space in the submarket saw a surge of move-ins with 377,691 square feet of direct move-ins. Fulton Market, the East Loop, and River North were the other submarkets that saw direct net absorption turn positive. Notable move-outs from around the CBD include Duff & Phelps (68,945 square feet) from 311 S Wacker (moving into 167 N. Green), Uber Freight (26,534 square feet) and AT&T (25,879 square feet), both from 225 W. Randolph, and Chody Real Estate Corp. (22,389 square feet) from 401 N. Michigan. Counteracting these moves were the occupancies of Perkins Coie (101,840 square feet) at 110 N. Wacker, CoinFlip (43,680 square feet) and ShopperTrak (28,217 square feet) both at The Old Post Office (433 W. Van Buren) and Flock Freight (15,665 square feet) at 318 N. Carpenter.