Understand the Costs & Savings Opportunities Associated with Your Current and Future Lease
As trends across the Chicago office market continue to evolve in our post pandemic environment, we took a closer look at the market conditions in the central business district (CBD) with new data that can benefit tenants leveraging insights for economic advantage.
As of the 2021 mid-year, the Chicago CBD vacancy is now averaging 22.6%, the highest level recorded in Chicago history, and expected to climb for the remainder for 2021 as a rebound may be slower than anticipated.
Rental rates saw a slight increase quarter over quarter, with concessions and incentives at all-time highs. Currently, there are 40 large blocks of contiguous space available in 37 buildings throughout the central business district. In addition, sublease space availability reached a record high, representing over 4% of market availability, and continues to be a challenge for landlords.
The COVID-19 pandemic is a health-related versus a strictly financial crisis, causing a longer recovery than originally anticipated. However, Chicago office users are now focusing on establishing plans for longer term needs and showing a strong desire for in-person collaboration, with many employees expected to be back in the office in at least partial physical capacity by Labor Day 2021.
WHAT THIS MEANS FOR TENANTS
- Especially in today’s climate, the market is tenant favorable as landlords remain highly motivated to offer significantly more favorable terms, concessions and deal incentives in order to fill building vacancies.
- One of the biggest changes to the office market has been the influx of sublease space availability. This may allow tenants currently looking for space to negotiate below market deals in top tier office buildings.
- Even though rental rates are holding steady, the market is primed for tenants as concessions are continuing to rise in this prolonged soft market.
- Employers are now showing strong signs and desire to return to the physical workplace, with most offices expected to be back in the office in some physical capacity by Labor Day.
As the leading provider of integrated real estate services with a 100% commitment to advocating the interests and needs of tenants, CBIZ Gibraltar understands that no two companies are alike and works to deliver the best possible solutions for our clients. Together, we uncover the potential of your work environment, maximize human capital and map the path to critical business success.