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Market Report

Chicago Office Investment Forecast

2022 Outlook

Downsizing Drives Tenant Losses;
Investors Wait for Recovery Inflection Point

Host of firms downsize into suburban areas as CBD tenant demand slumps. Leasing activity in the metro has yet to fully rebound, as space available for sublease reaches its highest level since the pandemic began, entering this year. Employment figures are below pre-pandemic totals, due to many of the metro's employers dropping staff. United Airlines recently cut 150,000 square feet downtown as some workers moved into an already leased site, while Schiff Hardin and Peoples Gas also made space available for sublease in 2021. Meanwhile, Centene reversed plans to fill 90,000 square feet in Naperville, opting instead to take its workers remote. Some signs of strength have emerged in the form of new plans from Amazon and John Deere to take on space in the core. The latter will open next year in Fulton Market but the former is simply adding to its current footprint in the CBD. Adding 2.1 million square feet of space will place pressure on rents and vacancy in 2022, but the market is beginning to stabilize.

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