Chicago Office Market
| Average Asking Rent (Price/SF) | $30.90 |
| Vacancy Rate (%) | 19.9% |
| Net Absorption (SF) | -170,148 |
As the summer weather rolled into Chicago, the COVID-19 restrictions rolled out, bringing some relief to the office market. According to Kastle Systems’ back-to-work barometer, the metro’s office occupancy was at 28.1% mid-June, up from 19.0% at the beginning of the quarter; 16.9% at the start of the year. The quickly rising vacancy rate started to slow this quarter, increasing only 20 basis points to 19.9%, compared to the average 50-basis-point increase from the previous four quarters. It should be noted that it’s not only the pandemic and tenants closing offices that is impacting vacancy; Chicago’s position in the development cycle factors in, as new inventory is still delivering. While total vacancy did increase, sublease vacancy and availability fell as tenants began to reoccupy formerly closed offices. As workers reemerge from their home offices, many are hesitant, concerned about both safety and losing the flexibility they became accustomed to during the lockdowns. This will contribute to the reimagining of the office market that might be seen in upcoming quarter.
Download Chicago Office Market Report 2Q21Chicago Industrial Market
| Average Asking Rent (Price/SF) | $5.83 |
| Vacancy Rate (%) | 6.0% |
| Net Absorption (SF) | 10,060,028 |
Chicago’s strongest performing asset type maintained its stellar performance this quarter. As the pandemic clouds cleared, the industrial leasing market was able to shine through. Thanks to record single-quarter absorption of 10 million square feet, the industrial market saw vacancy decline 20 basis points to 6.0%, also a new record. Availability fell 60 basis points to 8.4% as leasing volume continued to be extremely high. In fact, some tenants in flex industrial spaces are reporting landlords pushing them out in order to collect higher rents, forcing. some into Class C office properties. While these occurrences have not been common enough to impact the market yet, it is a trend to track.