Key Highlights:
- Direct Vacancy Reached New High:
Direct vacancy in the CBD was 25.30 percent, increasing 64 basis points quarter-over-quarter. Class A vacancy was 21.82 percent in the first quarter. - Negative Direct Net Absorption Continued:
There was -319,355 square feet of direct net absorption; occupancy gains in Fulton Market (116,661 square feet) and the West Loop (109,846 square feet) could not counteract the occupancy decreases found in the remaining submarkets. - Class A Spaces Remained in Demand:
There was 1,519,566 square feet of Class A leasing activity; three deals greater than 100,000 square feet were signed in Class A buildings. - The Construction Pipeline Emptied:
With the delivery of 919 W Fulton Market, a 369,007-square-foot development, Chicago’s CBD construction pipeline for office emptied. Currently, the only projects in the pipeline are renovations. - Renewals Headlined Leasing Activity:
Led by Latham & Watkins’ renewal and expansion at 330 N Wabash Ave; seven of the top 10 deals signed in the first quarter were renewals. Each of the six submarkets in the CBD had at least one deal place in the top 10 in the first quarter. - Capital Markets Activity Persisted:
Five building sales within Stream’s tracked CBD office inventory were recorded. These buildings were acquired at relative discounts to their previously traded prices, demonstrating the asset type’s continuing basis reset as new owners look to capture increasing tenant demand.