The Chicago office market has shed millions of square feet of leases in the last year, and things don’t look to be getting better.
The current 15.5 percent downtown office vacancy rate could tick up to 18 percent by the end of 2022, Crain’s reported, citing CBRE data. But it could also rise to over 20 percent if developers whose projects are now under construction don’t immediately sign companies once work is complete.
Since the pandemic took hold, dozens of firms have exited leases, while others have trimmed space or canceled pending deals.
That translated into more than 21 million square feet of empty office space at the end of 2020, about 21 percent more than the previous year, the report showed. And about 5.5 million square feet of downtown office space is also on the sublease market. Late last month, Groupon put its remaining 144,000 square feet of office space on the market at 600 West Chicago Avenue. The firm had put about that much up for sublease in May.
Only about 20 percent of employees have returned to offices, according to the report. Experts say that number will be slow to climb as firms increasingly announce indefinite remote-work models or hybrid schedules.
CBRE has forecast roughly 8 million square feet of office space coming online because of lease deal expirations and new project deliveries. Meanwhile, the suburban office market hasn’t fared much better. Adding to that pain, Amita Health just listed its 223,000-square-foot office in Lisle for sublease.
[Crain’s] — Alexi Friedman