In the second quarter, Savills reported that the downtown Chicago office market remained stable at 148.7 million square feet. However, there were divergent conditions with properties in prime locations and newer construction experiencing high demand and strong performance. On the other hand, Class B properties faced challenges in attracting and retaining tenants due to some landlords lacking funds for lease transactions.
The report highlights a 1.8% increase in overall asking rental rates compared to last year, rising from $43.37 to $44.16 per square foot. Class A asking rental rates also saw an increase of 2/9%, going from $50/05 to $51/44 per square foot.
Additionally, quarterly leasing activity showed a gain of 2% as it increased from 1/.9 million square feet to .21 million square feet.
Accordingly , Connect CRE reports that leasing activity in Chicago’s office market is primarily driven by expirations rather than new deals being made or expansions taking place.
