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July 2023

Hiffman Releases Second Quarter 2023 Office Market Report

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

Click the video above for a tasty twist on the 2Q 2023 Market Report from executive vice president – industrial services, John Whitehead and executive vice president – office services, Adam Johnson.

Suburban Chicago Office Market Weathers Softening Demand

Chicago’s real estate market is expected to grapple with significant headwinds in the latter half of 2023, as softening demand coincides with lingering economic uncertainties. The suburban office market is sending mixed signals.

Office Market Report

Office Market Report

  • In the first half of the year, net absorption reached a total of 430,553 square feet, with 301,262 square feet absorbed during the second quarter.
  • Since the start of 2023, suburban office leasing velocity has slowed considerably, experiencing a 38.6% decrease from the first half of 2022, raising concerns about potential weakening occupancy trends.
  • Amidst these challenges, there are glimpses of hope as inflation eases, and corporate leaders actively encourage their employees to return to the office.

The downtown market softened during the second quarter, with vacancy reaching new cyclical highs as landlords have struggled to backfill large blocks of space amid tenant relocations and contractions within the market.

  • Chicago’s CBD softened during the second quarter, with negative 18,095 square feet of net absorption, bringing the year-to-date total to negative 809,392 square feet.
  • The downtown market registered 1.3 million square feet of new leasing activity during the second quarter of the year, down from 2.2 million square feet recorded last quarter, and below the pandemic average of 1.9 million square feet since the first quarter of 2020.
Detailed statistics and commentary are available in the Second 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
630-691-0600
nschlanger@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 firms, providing institutional and private clients exceptional customized solutions for property management, project management, property accounting, lease administration, 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.


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