Vacancy rates rise across Chicago at year-end, but changing market dynamics may lie ahead

Market vacancy across Greater Chicago edged higher at the end of 2024, rising 100 basis points (bps) from a year earlier to 7.1%, the highest level in more than five years. Throughout 2024, net absorption remained well below the long-term average, as many occupiers prioritized consolidation and efficiency amid rising real estate costs. Overall, net absorption in 2024 was 69% lower than the previous year. While occupier demand weakened in 2024, a shift in dynamics is anticipated in 2025, with interest rate cuts and steadily growing e-commerce organizations expected to fuel demand for warehouses and distribution centers, particularly those strategically positioned near transportation hubs.

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