REmark – Chicago Office Leasing Activity, Pre- and Post-Pandemic: Downtown vs Suburban Markets
Office occupancy took a hit with the onset of the COVID-19 pandemic; we took a closer look at the impact to leasing activity in Chicago’s downtown and suburban office markets. Hiffman Associate Caroline Firrantello compares the seven quarters before and after the Q1 2020 shutdown to see how the markets fared, respectively. Despite challenges, tenant activity remains robust as companies seek to take advantage of favorable conditions and prepare their businesses for the future.
In the seven quarters prior to the Q1 2020 COVID-19 shutdown in Illinois, downtown office leasing activity averaged 2.67 M SF per quarter compared to 1.66 M SF in the suburban office market. In the seven quarters since, downtown leasing activity dropped 55 percent to 1.19 M SF per quarter, while suburban leasing decreased 28 percent, also to 1.19 M SF per quarter. Average quarterly leasing activity between the two markets is now roughly equivalent, despite the total size of the downtown market exceeding the size of the suburban market by about 37 percent.
Market conditions remain favorable for tenants, says Firrantello, and there continues to be strong activity in the suburban market. “More and more tenants are ready to evaluate their lease and understand their long-term footprint while locking in a great deal, she said.