Downtown Office Outlook a Question Mark for Now
Despite reaching a five-year high in vacancies, Downtown Chicago’s office market is best described as “healthy.” How healthy it remains, though, is an open question, says Colliers International’s Sandy McDonald.
“Considering recent pandemic events, it is more difficult to predict the state of commercial real estate based on recent indicators,” McDonald writes in the firm’s first-quarter report. “However, coupled with 2020 increases in property taxes in Chicago CBD, it is expected that the Chicago office market is moving toward a softening.”
She adds that landlords are expected to be “more negotiable with concessions in lease deals. For the first time in several years, base net office rates are expected to trend down to compete as tenants in the market scale back new deal signings and expansions. Subleases may also see an increase over the next few quarters, as companies deeply affected by this crisis may critically reconsider their space needs.”
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