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Office Market Remains Strong Despite Vacancy Uptick
Although not riding quite as high as office investment sales in the region, Chicago’s leasing market remained energetic in the second quarter, says NKF. Largest of Q2’s leasing deals was Publicis’ renewal and expansion at 35 W. Wacker Dr. (pictured), where it will now occupy 661,000 square feet.
That being said, the downtown vacancy rate jumped 80 basis points during the quarter. NKF attributed this to “a series of events” that included the delivery of 625 W. Adams St., and CNA’s move to the newly-delivered 151 No. Franklin St., leaving 600,000 square feet behind at its former location. And Publicis’ expansion at one property also meant consolidation from others.
Yet, NKF sees market strength in the relocations by McDonalds and Peapod into the CBD from the suburbs, and notes that Q3 will likely see several large deals completed. Downtown construction will also take a breather, allowing vacancy rates to settle.
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