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Chicago & Midwest  + Office  |  May 1, 2018
Paul Bubny
By: Paul Bubny

CBD Office Landlords’ Rent Gains Tapering

Office occupiers in Chicago’s CBD showed continued willingness in 2017 to pay record rent for quality space, according to Savills Studley in the firm’s latest Effective Rent Index report. That being the case, the gains for office landlords were smaller last year.

“Much of the new trophy product was pre-leased in 2016,” according to the report. “Fewer leases were completed in trophy buildings during 2017. In turn, negotiated rent inched up by only 0.3%, compared to a spike of 6.0% in 2016.”

Accordingly, tenant effective rent fell by 2.6%, as landlords extended generous improvement allowances, with 2017 seeing a 6.6% increase in concessions. “Little change is expected in 2018—negotiated rent will increase only moderately,” the report stated.

However, Chicago’s office owners can take encouragement from the experiences of Midtown Manhattan landlords in 2017. For them, negotiated rents were down 7%, while tenant effective rents slipped by 11.2% from 2016.


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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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