January 2024

Hiffman Releases Fourth Quarter 2023 Office Market Report

NAI Hiffman is pleased to present the Fourth Quarter 2023 Office Market Report, in-depth looks at statistics for the Chicago metropolitan office real estate markets.

Chicago’s Suburban Office Fundamentals Remain Uneven in 2023

  • Chicago’s suburban real estate market softened during 2023 as multiple factors came to a head, including reduced demand, tighter restrictions on available capital, and persistent economic uncertainty.
  • Net absorption totaled -386,000 square feet during the fourth quarter, bringing the 2023 annual total to -455,000 square feet.
  • Vacancy remains near all-time highs at 24.8%, though down from 25.7% one year ago as significant inventory has been removed from the market for conversion.
  • Faced with a combination of maturing loans and looming lease expirations, property owners are left in a difficult position of deciding whether to improve their space or lower rates to entice tenants, both of which prove challenging in an environment where available capital remains difficult to secure.

Downtown’s Office Market Continues to Soften

  • Chicago’s CBD softened during the fourth quarter with a further -632,000 square feet of absorption, bringing the year-to-date total to -2.8 million square feet.
  • Vacancy continues to rise to new cyclical highs at 22.0% during the fourth quarter, as landlords have struggled to backfill large blocks of space amid tenant relocations and contractions within the market.
  • The downtown market registered 1.9 million square feet of new leasing activity during the fourth quarter of the year, for a total of 7.6 million square feet leased across the year.
Detailed statistics and commentary are available in the Fourth Quarter 2023 Office Market Report; click here to access the download.
Detailed quarterly submarket reports will be available in the coming weeks.

Contact Us
For further information regarding the content of this market report, please contact:

Nick Schlanger
Research Director

David Mathis
Research Analyst

About NAI Hiffman:

NAI Hiffman is one of the largest independent commercial real estate services firms in the US, with a primary focus on metropolitan Chicago, and part of the NAI Global network. We provide institutional and private leasing, property management, tenant representation, capital markets, project services, research, and marketing services for owners and occupiers of commercial real estate. To meet our clients’ growing needs outside of our exclusive NAI Hiffman territory, we launched Hiffman National, our dedicated property solutions division, which provides property management, project services, and property accounting services across the country. NAI Hiffman | Hiffman National is an award winning company headquartered in suburban Chicago, with more than 250 employees strategically located throughout North America.

About Hiffman National: 

Hiffman National is one of the US’s largest independent commercial real estate property management and advisory firms, providing institutional and private clients exceptional customized solutions for property management, facility management, advisory services, accounting, lease administration, lender services, project management, marketing, and research. The firm’s comprehensive property management platform and attentive approach to service contribute to successful life-long relationships and client satisfaction. As a nationally bestowed Top Workplace, and recognized CRE award winner, Hiffman National is headquartered in suburban Chicago, with more than 250 employees nationally and an additional six hub locations and 25 satellite offices across North America.

Recent Blog Posts

Hiffman National’s PEEP Process
June 2024

Hiffman National’s PEEP Process

Warehouse Construction Slackens in Chicago Area
June 2024

Warehouse Construction Slackens in Chicago Area

Awards & Honors
Hiffman enjoys wins at Illinois RE Journals Awards
June 2024

Hiffman enjoys wins at Illinois RE Journals Awards