CHICAGO—The road to economic recovery has been a long one, and more than five years after the recession was officially declared over the office vacancy rate in downtown Chicago has finally sunk to a pre-crisis level. In the third quarter, the overall availability rate fell by 100 bps to 15.0%, the lowest since the end of 2008, according to a new report by Savills Studley. The drop in vacancy was also notable in the class A sector. Availability dipped 90 bps to 14.3%, also the lowest it has been since 2008.

Rental rates in class A spaces rose by 0.7% to $38.36 with the West Loop leading the way. Rates there increased to $39.55, a 2.8% jump. Landlords in River North, however, once considered the CBD's hottest neighborhood, saw their rates sink to $30.29. But rates in the CBD's trophy buildings, which have been healthy for some time, increased again to $46.43. “Leasing activity has attained its five-year average, (2.1-million-square-feet) for three consecutive quarters,” Savills Studley found. “Class A deal volume fell by 15.8% to 824,998-square-feet, but strong class B and C activity (1.4-million-square-feet) made up for some of the shortfall.”

The decline in the CBDs vacancy rate seems like it was driven by two factors. First, office-using employment in the Chicago region has expanded significantly in the last twelve months, increasing by 1.7% from a year ago, Savills Studley found, and now sits just 1.0% below its pre-recession peak. Second, companies have continued to migrate from the suburbs and into the CBD to take advantage of the transportation resources, the entertainment options, and the cachet that comes from a downtown address, among other reasons. In fact, “creative sector businesses are setting up operations almost exclusively in the CBD.”