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.”