Chicago & Midwest + Downtown + Office | April 20, 2023

Flight to Quality Drives Down Vacancies in Trophy Downtown Chicago Offices

Avison Young’s First Quarter 2023 Office Market Report for downtown Chicago shows that vacancy in trophy buildings has decreased to 7.5% as the flight to quality continues. Additionally, the average spread between base rent and net effective rent provided by landlords to maintain office demand has risen to 18.2% and 50% of CMBS loans remain in good standing, adding pressure to the market.

“Despite a rocky start to 2023, we will continue to uncover beneficial opportunities for both occupiers and owners as the market continues to adapt to current conditions,” said Damla Gerhart, managing director of the firm’s Chicago office.

She continued, “Tenants are still focused on luring their workers back to the office by making upgrades to the work environment and being purposeful in how they foster connectivity amongst their people. Landlords are still enticing occupiers with large concession packages and continue to focus on upgrading amenities that support the experience workers now want to have when they come into the office.”

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Avison Young's Gerhart

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-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 15-20 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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