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October 2023

Hiffman Releases Third Quarter 2023 Office Market Report

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

Chicago’s Suburban Office Market Moderates During Third Quarter

Chicago’s suburban real estate market softened during the third quarter of 2023 as multiple factors came to a head including reduced demand, tighter restrictions on available capital, and persistent economic uncertainty.

  • Net absorption totaled -350,000 square feet during the third quarter, reversing a trend of three consecutive quarters of occupancy gains.
  • Despite some volatility from quarter to quarter, flight-to-quality persists as newer, core, Class A assets continue to pace the market, with 317,243 SF of positive net absorption year-to-date.
  • The suburban office market has seen 4.2 million square feet of new leasing activity in 2023, down 28.7% from the same period in 2022.
  • Reduced demand raises questions about potential weakening occupancy trends as both tenants and landlords alike re-evaluate financing and cash flow.

Downtown Office: Vacancy continues to rise to 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 third quarter as -152,046 square feet of absorption brought the year-to-date total to -981,938 square feet.
  • The downtown market registered 1.3 million square feet of new leasing activity during the third quarter of the year, down from 1.4 million square feet posted 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 Third 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

David Mathis
Research Analyst
630-389-8922
dmathis@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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