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Asking Rents Soften in Q1 for Downtown Chicago Office
Despite rising taxes and operating expenses that have impacted most downtown Chicago office buildings, overall downtown average gross asking rent fell 1.3% in 2023’s first quarter below Q4 of 2022, to $42.63 per square foot, Savills reported Class A asking rents similarly declined 1.3%, to $48.98 per square foot.
The softening of downtown office rents occurred against the backdrop of what Savills called “blunted” leasing activity in Q1. Although the quarterly volume of 1.8 million square feet was 8% above Q4 2022, it was down 5.4% from the same time period a year ago, according to Savills.
“Some landlords have recently pulled back on asking rates in the face of weakened occupier demand and rising availability that has not slowed since the pandemic’s start,” wrote Savills’ Anders Klein. “Firms transacting space in these unprecedented market conditions have typically observed compressed tenant effective rents and increasingly flexible terms.”
- ◦Lease
