Chicago Real Estate Market Reports

Chicago Office Market

Leasing volume in the Chicago CBD totaled 6.3 million square feet through the first three quarters of the year, continuing to best the previous two years YTD totals. Vacancy saw no substantial change this quarter, with the removal of pending office building conversions offsetting the nearly 400,000 SF of negative absorption. While demand for Trophy Towers and premium top-floor spaces has intensified, pushing rates for these high-end assets higher, this strength at the very top of the market has had minimal to offset the broader economic challenges affecting the majority of office space in the CBD.

Chicago Suburban Office Market

Leasing momentum in Chicago’s suburban office market lost steam in the third quarter, totaling just above 0.8 million square feet, marking its softest stretch since 2020 after a strong first half that had briefly pointed toward pre-pandemic levels of 6.1 million square feet annually. Year to date, the suburban Chicago office market experienced a notable 779,000 square feet of positive net absorption. The overall vacancy rate increased from last quarter and 3Q2024, but it’s important to caveat this with the nearly 1.1 million square feet that has been removed since last year.

Chicago Industrial Market

Leasing activity has maintained steady momentum in 2025, with year-to-date deal volume already reaching 79% of last year’s total. Renewal activity, which spiked in 2024, has now normalized and accounts for 24% of leasing, on par with the long-term average. Direct deals have strengthened to represent two-thirds of year-to-date volume. After contracting in 1Q25, sublease availability has inched back up to 13.8 MSF, more than double the long-term quarterly average. Most of this space is concentrated in older, less functional facilities, with an average building age of 33 years across the available inventory. Average asking rents held flat at $6.46/SF, nearly unchanged from a year ago. In contrast, average taking rents are up just over 5% year-over-year. The gap between asking and taking rents shows that while posted rates have leveled off, tenants are willing to pay a premium for modern, well-located space.