Green shoots of optimism for Downtown Chicago office market amidst deeply changed dynamics

In 2023 the Downtown Chicago market observed its best post-pandemic performance as measured by lease transaction volume. Annual deal activity totaled 8.2 million square feet (msf), up 5.2% from full year 2022. However, deal volumes remained well below pre-pandemic levels, as many rightsizing tenants continued to opt for reduced occupancies. Heightened touring activity continued to be observed throughout the fall for direct and sublease opportunities alike, with occupier interest concentrated on the market’s highest quality and best located properties. Companies transacting space in the fourth quarter were not averse from moving from their existing locations. Just two of the top ten transactions this quarter were by firms who elected to remain in-place.

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