And even though these buildings increased direct vacancy in the index by 86 bps to 9.1%, that is still lower than it has been through much of the past ten years, according to MBRE.

Meanwhile, direct vacancy for all CBD properties reached 11.3% at the end of the fourth quarter of 2016, an increase of 23 bps from the previous quarter. Although there was a slight increase since last quarter, the direct vacancy rate is still at its lowest level since 2000, when vacancy rates were at 9.8%.

The fact that vacancy rates have remained low in the city's CBD is not much of a surprise to Davidson. “There is a tremendous amount of in-bound demand, both from the suburbs and tertiary cities, and Chicago is still relatively cheap when compared to other cities.”

According to MBRE, the largest new direct lease signed at an index building in the past three months was Outcome Health's lease of 385,050 square feet at 515 N. State. Outcome Health, which recently changed its name from ContextMedia, will greatly expand its footprint when it relocates from the roughly 66,000 square feet that it currently occupies at 330 N. Wabash. The move will bring the building's occupancy up to 95.2% after being less than 50% for the past two years.

The largest lease renewal signed at an index building in the past three months was Sidley Austin's renewal of 575,000 square feet at 1 S. Dearborn. It's a significant win for the building, as the law firm occupies 70% of the property. However, it will certainly disappoint developers hoping to get a commitment from Sidley Austin to relocate to their own proposed projects and possibly get them launched.

Still, other towers are already underway. And Davidson believes these developers will find an adequate number of tenants. “There are a couple of very large users out there, banks in particular, that will be looking to consolidate operations to the CBD,” he says. These companies could take between 500,000 and one million square feet, enough to anchor the largest class properties. “I don't see this demand stopping anytime soon.”

One of the chief reasons it will continue is the increasing importance of the workplace to talent recruitment. “Thirty years ago, all people talked about was rental rates and how to lower costs,” says Davidson. “Now, it's all about creating a space that provides a good environment for young people, and really for everybody.” And that means a constant demand for class A offices that also provide top amenities. “It's all about attracting and keeping talent.”

CHICAGO—Both of the CBD's new trophy office towers have solid leasing momentum, and the overall vacancy rate for the city's top office properties has only increased slightly even with all the new choices in the market. That was the conclusion of researchers from MB Real Estate, who just released their latest index report, which examines the CBD's 30 newest class A buildings.

The opening of 444 W. Lake in the fourth quarter of 2016, and the January delivery of 150 N. Riverside, added two new structures to the company's index. The properties replaced 227 W. Monroe and 35 W. Wacker, both of which were built in 1989. This also decreased the index's total square footage to 26,900,164 out of the CBD's 133,230,229.

444 W. Lake is already 83.3% leased and its largest tenants are McDermott, Will & Emery and DLA Piper. And 150 N. Riverside is 81.7% leased. Its largest tenants will be William Blair & Co. and Hyatt Hotels Corp.

“There is still a flight to quality; tenants continue to show a willingness to pay higher rents,” Andrew J. Davidson, MBRE executive vice president and managing director of corporate services, tells GlobeSt.com. Furthermore, the economy has not shown any sign of slowing down, and the times seem especially good for those in investment banking, finance and law, the very types of firms that have taken most of the new space.

And even though these buildings increased direct vacancy in the index by 86 bps to 9.1%, that is still lower than it has been through much of the past ten years, according to MBRE.

Meanwhile, direct vacancy for all CBD properties reached 11.3% at the end of the fourth quarter of 2016, an increase of 23 bps from the previous quarter. Although there was a slight increase since last quarter, the direct vacancy rate is still at its lowest level since 2000, when vacancy rates were at 9.8%.

The fact that vacancy rates have remained low in the city's CBD is not much of a surprise to Davidson. “There is a tremendous amount of in-bound demand, both from the suburbs and tertiary cities, and Chicago is still relatively cheap when compared to other cities.”

According to MBRE, the largest new direct lease signed at an index building in the past three months was Outcome Health's lease of 385,050 square feet at 515 N. State. Outcome Health, which recently changed its name from ContextMedia, will greatly expand its footprint when it relocates from the roughly 66,000 square feet that it currently occupies at 330 N. Wabash. The move will bring the building's occupancy up to 95.2% after being less than 50% for the past two years.

The largest lease renewal signed at an index building in the past three months was Sidley Austin's renewal of 575,000 square feet at 1 S. Dearborn. It's a significant win for the building, as the law firm occupies 70% of the property. However, it will certainly disappoint developers hoping to get a commitment from Sidley Austin to relocate to their own proposed projects and possibly get them launched.

Still, other towers are already underway. And Davidson believes these developers will find an adequate number of tenants. “There are a couple of very large users out there, banks in particular, that will be looking to consolidate operations to the CBD,” he says. These companies could take between 500,000 and one million square feet, enough to anchor the largest class properties. “I don't see this demand stopping anytime soon.”

One of the chief reasons it will continue is the increasing importance of the workplace to talent recruitment. “Thirty years ago, all people talked about was rental rates and how to lower costs,” says Davidson. “Now, it's all about creating a space that provides a good environment for young people, and really for everybody.” And that means a constant demand for class A offices that also provide top amenities. “It's all about attracting and keeping talent.”