CHICAGO—Landlords of the 30 newest class A office buildings in downtown Chicago saw the direct vacancy rates for their properties jump over the last quarter from 9.9% to 11.2%, and the overall direct vacancy rate for the CBD rose by 70 bps, to 15.7%, according to the new MBRE Index. The increases struck a bit of a discordant note in what had been a long-term slide in downtown vacancy rates. “This increase in the MBRE Index was primarily due to approximately 300,000-square-feet of space at 515 N. State coming back on the market that was formerly occupied by the American Medical Association,” the MBRE researchers note. “Since the overall CBD direct vacancy rate has steadily declined since June 2012, this past quarter is not indicative of the overall improvements.”

The quarterly index presents data on the newest 30 buildings, which were all built between 1989 and 2009 and range from 372,000-square-feet to 1,845,460-square-feet. Tenants signed two large leases within the index buildings since December. Archer Daniels Midland took 46,000-square-feet at 77 W. Wacker and the American Board of Medical Specialties signed for 27,500-square-feet at 353 N. Clark. But even though these may show that demand for class A space is strong, it was not enough to cover the amount that returned to the market.

The class A office market still has to struggle against a relatively stubborn unemployment rate. The state last month recorded an unemployment rate of 8.9%, significantly above the national average of 6.7%, and the third highest in the country behind Rhode Island and Nevada, MBRE notes. Chicago's unemployment rate remains lower than state's, but still higher than the national average. And that slow recovery keeps Chicago companies focused on shrinking their footprint. “Chicago was one of only two North American cities that showed a decrease in total tenant cost per workstation over the past year,” MBRE notes. “The rest of the nation is experiencing rising occupancy costs.”