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Quality remains king in Chicago office market
Avison Young releases Q2 2023 Chicago CBD Market Report
Chicago, IL – Avison Young today released its Second Quarter 2023 Office Market Report for Chicago’s Central Business District (CBD). The report indicates that vacancy in trophy buildings remains significantly lower, 14%, versus class A and B buildings, which sit above 20%, the average spread between base rent and net effective rent in trophy and class a properties provided by landlords to maintain office demand has only fallen by .4% over last quarter, and that decreasing demand and rising rates continue to build pressure on buildings with CMBS loans.“Quality remains the driving force in leasing activity for Chicago’s CBD,” said Damla Gerhart, Principal and Managing Director of the firm’s Chicago office. “Trophy assets are seeing significantly lower vacancies, however, the unoccupied space in new deliveries, like Salesforce Tower, is driving this figure up.”
The report also indicates that despite stable market rents, the growing trend among landlords to offer substantial concession packages has continued to decrease net effective rates across the market.
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