Although this amount of shadow space is a concern, the office market has confronted and overcome stiffer challenges. “No new developments have been built since 2008/2009, when 4,079,543 square feet were added to the market,” an MBRE spokesperson tells GlobeSt.com. “That inventory was delivered just as the recession was hitting and there were three years of negative absorption, which caused the vacancy rate to increase from 11.52% in 2008 to 16.04% in 2010. It is difficult to quantify what impact shadow space played in the market downturn, but it paled in comparison to the impact of the overall economic downturn.”

“We are in our sixth straight year on positive absorption, so assuming we do not hit another recession, the vacancy rate should not be as drastically affected,” he adds. Still, “so far, very little of the shadow space has been absorbed.”

Akerman plans to expand into the Pritzker Organization's 33,371 square feet at 71 S. Wacker once the latter firm moves to the 150 Riverside building. Furthermore, 60,000 square feet of Polsinelli's space at 161 N. Clark has been subleased.

But the building with the most shadow space is CNA's 333 S. Wabash Ave. In 2018, the firm will drastically reduce the amount of downtown space it occupies by relocating from 755,018 square feet at 333 S. Wabash to 272,569 square feet at John Buck's 151 N. Franklin, which the developer plans to open in June 2018. However, John Buck recently purchased CNA's headquarters and may still redevelop all, or a portion, of the building for residential use.

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.

“Based on a ten-year average absorption rate of 913,527 square feet per year, the CBD overall direct vacancy rate is likely to rise by half a percentage point from the current 11.7% by the end of 2017,” according to MBRE. “The class A direct vacancy rate, which is currently at 10.6%, could increase by a full percentage point or more in 2017.”

Although this amount of shadow space is a concern, the office market has confronted and overcome stiffer challenges. “No new developments have been built since 2008/2009, when 4,079,543 square feet were added to the market,” an MBRE spokesperson tells GlobeSt.com. “That inventory was delivered just as the recession was hitting and there were three years of negative absorption, which caused the vacancy rate to increase from 11.52% in 2008 to 16.04% in 2010. It is difficult to quantify what impact shadow space played in the market downturn, but it paled in comparison to the impact of the overall economic downturn.”

“We are in our sixth straight year on positive absorption, so assuming we do not hit another recession, the vacancy rate should not be as drastically affected,” he adds. Still, “so far, very little of the shadow space has been absorbed.”

Akerman plans to expand into the Pritzker Organization's 33,371 square feet at 71 S. Wacker once the latter firm moves to the 150 Riverside building. Furthermore, 60,000 square feet of Polsinelli's space at 161 N. Clark has been subleased.

But the building with the most shadow space is CNA's 333 S. Wabash Ave. In 2018, the firm will drastically reduce the amount of downtown space it occupies by relocating from 755,018 square feet at 333 S. Wabash to 272,569 square feet at John Buck's 151 N. Franklin, which the developer plans to open in June 2018. However, John Buck recently purchased CNA's headquarters and may still redevelop all, or a portion, of the building for residential use.