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Chicago Office Sector Anticipates “Imminent” Return of Workers After Hard Q1

The hardships of the pandemic carried on into the first quarter of 2021 for the Chicago office market, Newmark’s Amy Binstein and Eric Geskermann reported. Yet, the Q1 report also cites cause for optimism.

Absorption recorded negative 1.8 million square feet across downtown and the suburbs, the largest absorption deficit the market has ever experienced to start a new year.

Vacancy climbed 110 basis points in Q1 to a decade-high 19.7%, and availability increased 160 bps to an all-time high of 25.4%. Average rental rates haven’t budged, though, despite the lack of demand for office.

“Landlords with vacancies are likely offering increased concession packages rather than lower rental rates,” Binstein and Geskermann wrote.

However, they noted, “optimism is spreading that a return to the office is imminent.” Exactly what that return will look like post-pandemic, in terms of facilities use and configuration, is still to be determined, added Binstein and Geskermann.

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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