Chicago Office Market
Leasing volume in the Chicago CBD reached 4.1 million square feet in the first half of 2025, above the levels recorded in the first half of 2023 and 2024. While activity is still below the long-term annual average and pre-pandemic peaks, the uptick in early 2025 demonstrates steady tenant engagement. Vacancy increased 70 basis points this quarter as the CBD saw approximately 535,000 SF of negative absorption. Year-to-date, total vacancy has risen by 0.5%. Meanwhile, competition for Trophy Towers and premium view spaces on the top floors has tightened. Demand for top-tier space in the Central Business District is expected to absorb the limited supply, driving trophy rates higher.
Download Chicago CBD Office Market Report 2Q25Chicago Suburban Office Market
Chicago’s suburban office market recorded 1.9 million square feet of leasing in the first quarter and 1.2 million square feet in the second quarter of 2025, totaling 3.1 million square feet year-to-date. This marks the first time since 2018 that leasing volume is tracking on pace with the long-term annual average of 6.1 million square feet. The strong start to the year highlights renewed confidence and active engagement from suburban tenants as the market regains pre-pandemic momentum. In the first half of 2025, the suburban Chicago office market experienced a notable 935,000 square feet of positive net absorption. The overall vacancy rate decreased from last quarter to 26.0% but is still up 0.8% from the first quarter of 2024.
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Chicago Industrial Market
Leasing activity in the Chicago industrial market rose significantly in Q1 2025, increasing 37.4% over the previous quarter. A substantial share of the volume was driven by Uline, which renewed and expanded for a total of 1.6 million square feet across three transactions in the Kenosha submarket. After five consecutive quarters of growth, sublease availability declined in Q1 2025, with 1.6 million square feet removed from the market—a 10.4% contraction. While some of this space was withdrawn or converted to direct listings, more than 600,000 square feet was leased across 17 transactions. Asking rates held steady in the first quarter of 2025, rising marginally by $0.02/SF to $6.48/SF. While asking rents are still up year-over-year, the pace of growth has slowed considerably, driven in part by softer leasing demand in recently delivered Class A facilities, which has also put downward pressure on taking rents.