Pandemic Restrictions Cause 10-Year Peak in Office Vacancy
Research & Forecast Report DOWNTOWN CHICAGO | OFFICE Fourth Quarter 2020 Pandemic Restrictions Cause 10-Year Peak in Office Vacancy Sandy McDonald Senior Director of Research | Chicago As of January 6th, 2021, the Chicago Metro occupancy (according to Market Indicators Kastle Systems) was 16.9%, up 4.9% from 11.9% at the end of 2020. CHICAGO CBD OFFICE Q4 2020 Q3 2020 Q4 2019 Rents continue to tick down as availability ticks up with tenants across all classes contracting space and/or adapting new working environments VACANCY RATE 15.0% 13.8% 12.3% for their employees. Overall activity in the market was slow for a third AVAILABILITY RATE 20.8% 19.3% 16.0% consecutive quarter, as vacancies reach 2010 post-recession levels. QUARTERLY NET ABSORPTION (SF) (1,129,559) 236,973 408,517 Vacancy & Absorption YTD NET ABSORPTION (SF) (1,275,593) (146,034) 1,597,365 » In the fourth quarter of 2020, Chicago saw overall and sublease RENTAL RATES (PSF) $41.91 $42.13 $42.95 vacancy rates rise to the highest levels since the 2009 recession. The overall Chicago CBD vacancy rate increased 120 basis points to SUBLEASE VACANCY (SF) 2,770,321 1,935,838 1,429,706 15 percent with sublease vacancy accounting for 1.8 percent of this SUBLEASE AVAILABLE (SF) 5,866,761 4,770,502 2,936,278 total. UNDER CONSTRUCTION (SF) 4,631,081 6,473,843 5,475,409 » As expected, net absorption hit a low point in the final quarter, NEW SUPPLY (SF) 2,384,402 0 2,500,000 totaling 1.13 million square feet of negative net absorption bringing the 2020 total to 1.28 million square feet—both of which are the highest negative net absorption levels since 2009.
[Show full text]