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 has gained momentum in 2025, with year-to-date volume reaching 76% of last year’s total. Renewals have played a significant role, accounting for 7.5 million square feet, an above-average share of overall activity. After contracting in Q1 2025, sublease availability rose once again in the second quarter, with more than 600,000 square feet added to the market. Total sublease inventory now stands at 14.4 million square feet—up from 13.7 million last quarter, though still below the Q4 2024 peak of 15.3 million. Asking rates continued to climb in Q2 2025, reaching $6.59 per square foot. While leasing activity has gained some traction this year, it remains below historical levels, contributing to a slower pace of rent growth—up just 0.6% year-over-year.