Chicago’s downtown office market continues to face challenges, but newer buildings are proving that the trend towards high-quality spaces is ongoing. According to a report by the Chicago Business Journal, modern buildings over 300,000 square feet are performing better than neighboring offices in the Central Business District.
In fact, Transwestern’s latest Office Market Index shows that while the district’s overall direct vacancy rate reached almost 20%, Class A office buildings built in the last 20 years with over 300,000 square feet have a much lower direct vacancy rate of just 5.6%. This trend is expected to continue as new developments like Salesforce Tower Chicago offer attractive amenities and collaborative workspaces for hybrid working environments.
Despite lower leasing activity throughout Chicago – with only 1.3 million square feet directly leased in the quarter compared to an average of 2.6 million square feet seen in previous years – there has been an increase in sublease spaces available. According to Transwestern’s recent report, there are currently a record-breaking number of sublease spaces on offer at nearly eight and a half million square feet across all property types.
This surge follows a decrease reported earlier this year and highlights how aging properties may struggle against newer developments when it comes to attracting tenants looking for top-of-the-line office space options within Chicago’s CBD.
