April 2026
Hiffman Releases Q1 2026 Office and Industrial Market Reports
NAI Hiffman is pleased to present the Q1 2026 office and industrial market reports, our firm’s in-depth look at statistics for the Chicago metropolitan commercial real estate markets.
OFFICE: Evolving Suburban Market Widens Gap Between Resilient, Well-Located Assets and Struggling Legacy Properties
- Leasing activity registered 1.1 million square feet during Q1 2025, with Class B leasing making up 32.7% of that total.
- The first quarter saw net absorption reach -435,392 square feet, due primarily to a small number of larger tenant relocations.
- Future success will favor landlords and investors who remain agile and responsive to tenant expectations. The performance divide between upgraded, well-managed properties and legacy assets is becoming more pronounced.
Downtown Office
- Chicago’s CBD office market continued to soften during the first quarter with 342,753 square feet of negative absorption, driven partly by a new construction completion in Fulton Market.
- Overall vacancy rose to 25.6% during the first quarter, a new historical high as vacancy continues to climb.
- The downtown market registered 1.7 million square feet of new leasing activity during the fourth quarter, down 35.1% year-over-year from 2025.
INDUSTRIAL: Chicago Industrial Market Continues 2025 on Stable Footing Amid Evolving Demand
Although demand for large-format industrial facilities has softened over the past two years, tenant interest remains solid for modern, well-located properties offering access to major interstates, rail infrastructure, and nearby population centers.
- Chicago’s industrial market continues to stabilize to normal levels with vacancy improving slightly to 5.9% from the previous quarter.
- New leasing activity climbed to 11.8 million square feet between January and March, a sizeable increase from the 8.6 million square feet reported during the same time period last year thus indicating the strengthened demand for space in the Chicago market.
- Leasing momentum continues to be driven primarily by third‑party logistics and e‑commerce tenants, a trend that remains a cornerstone of industrial market activity entering 2026. In addition, the market is experiencing increased leasing demand from users within the industrial and electric power distribution sectors.
- The development playing field remains evenly balanced with 47% consisting of build-to-suits (committed companies signing off pre-build) and 53% of speculative construction.
Contact Us
Denes Juhasz
Director of Research
630-693-0645
djuhasz@hiffman.com
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.
