Chicago Office Market
| Average Asking Rent (Price/SF) |
$32.36 |
| Vacancy Rate (%) |
21.6% |
| Net Absorption (SF) | -795,654 |
Despite the high hopes of many, the office market’s performance in the second quarter of 2022 was lackluster. Employees did not return to the office en masse, and activity vacillated with transactions by some for growth and deals for reduction by others. Tenants that are expanding or choosing to lease enough space for all their employees are citing a belief that eventually, their employees will be back in the office. At the end of June, the Kastle Security Systems office occupancy data reached its highest rate since March 2020, with the 10-city average reaching 44.2%. Chicago fell just slightly below this at 41.9%.
Download Chicago Metro Office Market Report 2Q22 (PDF)
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Chicago Industrial Market
| Average Asking Rent (Price/SF) | $6.21 |
| Vacancy Rate (%) | 4.0% |
| Net Absorption (SF) | 8,296,098 |
The Chicago industrial market strengthens itself for another consecutive quarter. Industrial vacancy has decreased by 40 basis points this quarter and 190 basis points year-over-year to 4.0%. While net absorption for the quarter has fallen from the previous quarter, down from 11.1 million square feet to 8.3 million square feet, the deceleration is more a result of limited availability and delayed deliveries of new space than of slowing demand. Vacancy hits record lows quarter after quarter in Chicago, contributing to this deceleration. This quarter was the first quarter of decelerating absorption since the third quarter of 2021; while still above the five-year average of 5.6 million square feet, a larger portion of deals were renewals or expansions. Only 54.0% of this quarter’s deals and 37.0% of this quarter’s transaction volume were the result of direct new leases. Comparatively, the first quarter of 2022 had 73.0% of deals and 73.0% of leasing volume resulting from direct leases. There is less space available for new deals, and tenants are more willing to hold onto the space they have than compete with the high market demand.