Leasing activity tails off in Downtown Chicago even as return to office strengthens

Office occupancy in Chicago exhibited steady, albeit gradual, improvement during the third quarter, while public transit agencies reported post-pandemic highs in ridership. Despite these favorable signals, the Downtown Chicago office market witnessed slackened leasing activity in the third quarter, with 1.8 million square feet (msf) transacted. The tally was the lowest in five quarters but remained well above levels observed during the pandemic’s peak. While some companies elected to take advantage of favorable market conditions and an abundance of quality options, others have been more reticent to transact space in the current environment. Some firms executing deals have reduced both their occupancies, whether due to hybrid work policies and hoteling, or leasing space in newer, more efficient properties. Among them, National Futures Association leased 55,000 sf at BMO Tower, shrinking by 22% from its current footprint at 300 South Riverside Plaza.

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