Q3 2024 Chicago Office Market Report

Chicago’s CBD experienced only a minimal increase in vacancy in the third quarter, with just a 10 basis point increase from the prior quarter, ticking up to 25.1%. Class A and C vacancy increased to 20.5% and 27.1% respectively while class B vacancy remained flat at 32.1%. Class A assets remain the favorite destination for tenants in the market despite the uptick in vacancy. With Direct vacancy resting at 15.4% for the quarter in that class, competition for vacant space, particularly in the high rise portion of these buildings, makes landlords less willing to bend to tenant demands.

Negative net absorption totaled 551,000 for the second quarter, a larger retreat from the market in the prior quarter. This increase had a muted impact on total vacancy as sublease space decreased by 20 basis point from the prior quarter. Class A assets were hit hardest with 383,000 square feet returning the market. Class B buildings were also hit with 189,000 square feet of space returning to the market. Only Class C buildings experienced muted positive absorption (59,000 square feet). Central Loop, Fulton Market, and River North experienced positive movement. East Loop, North Michigan Avenue, and West Loop were all negative for the quarter.

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