Chicago Office Market Report

Limited development spurs cautious optimism for Chicago offices. Employers seeking proximity to affluent labor pools in the urban core and high-income suburbs continue to sustain demand, yet the market remains sharply bifurcated moving into 2025. Although total vacancy is still climbing, it is doing so at a slower pace, aided by declining sublease availability and the smallest pipeline of deliveries since 2014 — just 900,000 square feet — slated for completion this year. Modern Class A properties, notably in the Loop and River North, are seeing market-supported rent growth of around 3 percent, while also offering selective incentives to secure high-profile tenants. Older Class A and Class B buildings, however, remain at a competitive disadvantage. The city’s focus on repurposing obsolete inventory into apartments or mixed-use spaces is providing a boost, though, by removing underperforming buildings from the tenant market. Against this backdrop, recent positive net absorption supports a cautiously optimistic outlook, suggesting that Chicago’s office sector may be nearing a turning point.