Developments and Office Trends in the Chicago Central Business District
Although uncertainties remain within Chicago’s Central Business District (CBD), Tenants, Landlords and investors have been able to remain optimistic. The new development pipeline is bringing 3.6 million square feet of space to the market in 2019 and fueling the continued demand for high-quality space. The division between quality assets and older assets has become more pronounced throughout 2018 and are expected to widen further. The growing number of options available to Tenants along the CBD will increase the overall vacancy rate in the market.
Despite the increased vacancy, companies are continuing to migrate to Chicago’s CBD, being attracted to the diverse local economy, talented labor pool, and world class infrastructure. As newer supply comes online and attracts Tenants from older Class A assets, a subset of older high-quality space is expected to become available. Class B Tenants looking for more value in their leases could have an opportunity to absorb the older space, resulting in the bulk of shadow space occurring in Class B assets. Overall, the market will gradually shift in favor of Tenants as over 5 million square feet of office space delivers over the next twenty-four months.
This market trends piece was developed by our partners at CBIZ Gibraltar. Have real estate needs in Chicago? Contact CBIZ Gibraltar today.