CHICAGO—The downtown office market has been the picture of health lately, partly due to the in-migration of suburban firms and the expansion of the tech sector. But the market is approaching its biggest test in years.
Developers are finishing up a set of gleaming towers in the West Loop that will add about 3.6 million square feet of new class A office space over the next two years. Tenants are likewise readying their plans to move out of their current buildings, and if this shadow space remains vacant for any stretch of time, it will push the CBD's vacancy rate upward for the first time since 2009, according to a new market report from MB Real Estate.
Hines and John O'Donnell plan to open their new buildings, at 444 W. Lake St. and 150 N. Riverside, respectively, by January. The pair of structures will have a total of about 2.3 million square feet, and tenants have already pre-leased about 1.8 million square feet, creating at least 1.5 million square feet of shadow space elsewhere in the downtown, or about 1.2% of the projected total 2017 inventory in the CBD.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
