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Market Report

Chicago Office Investment Forecast

2020 Outlook

Office Investors Shift to Stabilized Mid-Tier Properties in Chicago Amid Elevated Construction


Class A Chicago office market shines while Class B/C assets search for footing. Vacancy increases moving down the quality scale as demand for office space is focused on top-tier properties in the city core. Last year, 12 of the 16 largest leases were in the West Loop. In fact, the sole renewal among the dozen large leases in the area included a 50,000-square-foot expansion as United Airlines committed to 816,000 square feet in the Willis Tower. Smaller footprints in the area also remain attractive, which has pushed pre-leasing to 70 percent, much stronger than the market average of 40 percent. Outside of the West Loop, speculative development will weigh on overall vacancy this year as construction levels remain near the cyclical high, curbing backfill opportunities in Class B/C buildings. Several announced expansions should aid in absorption in the coming years, however, as Google, Amazon and Facebook begin expanding headcounts.  

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