First Quarter 2021 Market Watch
NAI Hiffman is pleased to present the First Quarter 2021 Market Watch, a first look at the market statistics for the Chicago metropolitan office and industrial real estate markets.
Industrial: Keeping Momentum Despite the Ongoing Pandemic
- Leasing activity remained robust at the start of 2021, as over 17.0 million square feet of deals were recorded.
- Net absorption exceeded 2.5 million square feet to start 2021.
- There is currently nearly 23.2 million square feet of industrial properties currently under construction in the market, spread across 59 developments.
Suburban Office: Subleases Hold Steady in the First Quarter
- The sublease vacancy rate, which had been steadily increasing since the onset of the Covid-19 pandemic, remained unchanged at 1.47 percent compared to the year-end 2020 rate. On a positive note, the sublease vacancy rate in suburban Class A space decreased by 10 basis points in the first three months of 2021.
- There was -789,489 square feet of net absorption recorded in the first quarter. For the fourth consecutive time since Q2 2020, the suburbs outpaced the downtown office market, which saw -931,663 square feet of space return to the market in the first quarter.
Downtown Office: The Pandemic Isn’t In Chicago’s Rearview Mirror Just Yet
- There were another -931,663 square feet of net absorption in the first quarter downtown, a marginal improvement after three consecutive quarters of greater than -1.0 million square feet of net absorption. At 156,903 square feet, the Fulton Market/Near West Side submarket was the only downtown submarket to record positive absorption on the quarter.
- There was 1,136,567 square feet of leasing activity downtown to start the year.
- Three projects in the downtown development pipeline delivered in the first quarter of 2021, adding another 313,000 square feet of inventory.