October 2025
Hiffman Releases Q3 2025 Office and Industrial Market Reports
NAI Hiffman is pleased to present the Q3 2025 office and industrial market reports, our firm’s in-depth look at statistics for the Chicago metropolitan commercial real estate markets.
OFFICE: Signs of Recovery Emerge in Chicago’s Suburban Offices as Headwinds Persist
- In the third quarter, Chicago’s suburban office market showed signs of stabilizing, despite ongoing headwinds that continue to shape the region’s commercial real estate dynamics.
- Leasing activity registered 955,655 square feet during Q3 2025, with Class B leasing making up 50.3% of that total.
- The third quarter saw net absorption reach 3,841 square feet, as suburban tenants continue to evaluate their space usage.
- Forward-thinking property managers who focus on tenant satisfaction and operational agility are setting the pace in the suburban market. The disparity between high-performing, modern facilities and outdated buildings is becoming increasingly pronounced each quarter.
Downtown Office
- Chicago’s CBD office market continued to soften during the third quarter with 227,400 square feet of negative absorption, a further step back after positive absorption in the first quarter.
- Overall vacancy rose to 24.7% during the third quarter, a new historical high as vacancy continues to climb.
- The downtown market registered 1.8 million square feet of new leasing activity during the third quarter, up 19.9% year-over-year from 2024.
INDUSTRIAL: Chicago Industrial Market Continues 2025 on Stable Footing Amid Evolving Demand
- The Chicago market posted 7.5 million square feet of positive net absorption in the third quarter, a sharp increase from the 1.0 million square feet recorded in the previous quarter.
- Chicago recorded 9.7 million square feet of new leasing activity in the third quarter of 2025, down from 12.1 million square feet in the previous quarter.
- Overall vacancy fell 30 basis points quarter-over-quarter to 6.1%, reflecting a notable cooling in development momentum.
- While demand for larger industrial facilities has moderated over the past two years, tenant interest remains strong for modern, well-located properties that offer access to multiple transportation options—including major interstates, rail lines, and proximity to major population centers.
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.
