Chicago’s CBD direct vacancy rate of the Chicago Office Market Index was 7.3% at the end of Q1, according to Transwestern’s latest report. This index is comprised of 20 Class A office buildings larger than 300,000 square feet located in Chicago’s Central Business District (CBD). The rate is 12.4 percentage points lower than that for the overall CBD and highlights a trend among tenants who prefer newer buildings with better amenities – an activity referred to as “flight-to-quality” in the market.
The newest building included in this index, BMO Tower at 320 S Canal Street with 1.5 million square feet space, has a vacancy rate of 39%. However this can be attributed to lost pre-leasing momentum during pandemic times; recently Antares Capital leased 79657 sqft and Molson Coors leased 83848 sqft showing signs that prospects are improving here too!
Adding further strength to leasing activities will be Sales Force Tower – a 1.2 million square foot property located at 333 W Wolf Point Plaza which will join CBD & Index by Q2 2021 . It has been 100% preleased by Salesforce & Kirkland & Ellis though 119950 sqft have been listed for sublease purposes .
Overall , it appears that leasing activities within Chicago’s Central Business District are on an upswing due its “flight-to quality” phenomenon amongst tenants looking out for newer properties with better amenities !
