In the second quarter of 2024, Chicago’s downtown office vacancy rate increased to 22%, up from 21% in the previous quarter. This information was revealed in a recent report from Bradford Allen, titled “Q2/24 Office Market Report: Downtown Chicago.” The report also noted that gross asking rents were $42.81 per square foot, slightly lower than last quarter’s $43.44.
Bradford Allen has also published its “Mid-Year 2024 Office Market Report: Suburban Chicago,” which shows that the suburban office vacancy rate decreased to 24% in the first half of this year compared to an end-of-year rate of 28.3% in 2023. Gross asking rents remained stable at approximately $27 per square foot.
According to Neil Bouhan of Bradford Allen, successful property owners are those who are willing and able to reinvest in their properties through initiatives such as spec suites, amenity upgrades and tenant improvement allowances.
Examples of downtown reinvestment include a commitment by Prudential Plaza office complex owner for a $50 million upgrade and redevelopment efforts on four office properties funded by TIF funds worth $150 million provided by the city government.
Sales activity for offices located within Chicago’s CBD showed an increase during Q2 with total sales reaching $255 million during H1-2024; however suburbs saw more than four times higher sales volume compared with CBD despite having only about two-fifths inventory available there currently.
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