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Trophy Towers Dominate CBD Leasing Growth
The office market in Chicago’s CBD increasingly is marked by “a dichotomy” between Class A and lower classes of product when it comes to growth, says Cushman & Wakefield. “Occupiers demanding amenity-rich spaces with abundant natural light have flocked to newer assets while older Class B and C towers seek to maintain occupancy by increasing concessions,” according to the firm’s year-end CBD report.
As the fourth quarter of 2018 ended, trophy towers logged 10% overall vacancy, while Class A stood at 13.7% and Class B increased to 15.3%, Cushman & Wakefield says. A Q4 leasing surge brought the 12-month total to 10.1 million square feet, up 31.7% from 2017.
Q4 was buoyed by two major leases that spurred proposed developments: Salesforce.com leased 500,000 square feet in Wolf Point South—now named Salesforce Tower (pictured)—while BMO Financial Group signed a 493,000-square-foot lease to anchor the new tower at Union Station.
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