Report: Chicago Office Market Leasing Activity Remains Expiration-Driven

The downtown Chicago office market experienced divergent conditions in Q2, with overall inventory remaining stable at 148.7 million square feet, according to a Q2 office report from Savills.

The bifurcated conditions resulted in properties with newer construction, amenities, and prime locations being highly sought after and performing well. Conversely, the Class B market faced challenges in retaining and attracting tenants, with some landlords lacking the funds to execute lease transactions.

Key highlights from the report include the overall asking rental rate increasing by 1.8% year over year, from $43.37 to $44.16 per square foot. Class A asking rental rate increased by 2.9%, from $50.05 to $51.44 per square foot. Quarterly leasing activity increased from 1.9 million square feet to 2.1 million square feet, a 2% gain.