Overall fundamentals shift in favor of tenants; rent growth flattens over the quarter while availability creeps up
The dynamics of the downtown Chicago office market exhibited favorable tendencies for tenants in the second quarter, with rental rates flattening and available options increasing. The overall availability rate in Chicago finished the second quarter at 16.3%, increasing by 60 basis points year over year. However, high quality space continues to be in high demand. Class A availability declined by 40 basis points year over year, falling to 14.5%. The West Loop again captured a majority of leasing activity, with seven of the 10 largest transactions this quarter occurring within the city’s largest submarket. These included Ernst & Young’s restack at 155 N. Wacker Drive totaling 191,525 square feet (sf), and Perkins Coie LLP taking 101,840 sf across four floors at 110 N. Wacker Drive. Overall downtown asking rents averaged $40.96 per square foot (psf), increasing 3.3% year over year. However, rents slid by 0.1% from the first quarter. Class A asking rents inched up 0.2% quarter over quarter to $46.61 psf.