Chicago CBD office market report

Q4 2024

Chicago’s office market in 2024 continued to face leasing challenges, with total activity down 36.1% from pre-COVID levels and declining 2.1% from 2023. However, signs of resilience emerged, particularly in Q4, with major lease signings from Sargent & Lundy, PwC, and BP. Tenants are looking to high-quality space in 1990s/2000s buildings, as availability in newer properties remains tight. Additionally, average lease sizes increased for the first time since the pandemic, signaling potential stabilization, though they remain 17.4% smaller than 2019 levels. While leasing volume remains subdued, shifting tenant preferences and larger deal activity hint at a market in transition.
7.9 msf

Total leasing activity in 2024

U.S. office leasing activity in 2024 totaled 7.6 msf, reflecting a 36.1% drop compared to the pre-COVID annual average of 12.4 msf (2014–2019) and a 2.1% decline from 2023's 8.1 msf. Despite the overall slowdown, Q4 saw notable leasing activity as major tenants finalized significant deals. Sargent & Lundy signed a new lease for 384k sf at 77 W Wacker, while PwC and BP each renewed leases for 282k sf and 225k sf, respectively.

38.8%

YoY increase in 90s/00s construction leasing activity

In 2024, over 2.4 msf was leased across buildings constructed in the 1990s and 2000s. Since the pandemic, many tenants have continued to prioritize high-quality space in new or renovated buildings. But with availability in new-age construction (post-2010) remaining tight (below 8%) and minimal new developments in the pipeline, leasing activity in 90s/00s-era buildings has continued to rise. A notable example is the largest lease of Q4: Sargent & Lundy relocated and expanded from 55 E Monroe (built in 1973) to 77 W Wacker (built in 1992), securing 384k sf.

13.4%

Increase in average lease size vs. 2023

From 2019 to 2023, average lease sizes across the CBD steadily declined. However, 2024 marked a turning point as average lease sizes increased for the first time since the pandemic. This growth was driven by both new leases and renewals, which rose year-over-year by 12.1% and 16.0%, respectively. Despite this improvement, average lease sizes in 2024 remained 17.4% smaller than pre-pandemic levels in 2019. The bulk of this decline stemmed from new leases, which were down 20.9%, while renewals experienced a more modest drop of 5.6%.

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