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.
- ◦Lease