CBD Office Market Approaches Tipping Point

This speculative building at 625 W. Adams will open next year, and how well it leases will say a lot about the strength of the CBD market.

CHICAGO—After several years of tightening, the vacancy rates in some of Chicago’s downtown submarkets have started to increase, largely due to the recent opening of several class A towers. The movement of so many tenants into these new trophy properties has opened up holes in other buildings, and many observers feel that the tipping point in Chicago office fundamentals that has been favoring landlords is approaching. In other words, events are unfolding as predicted.

“This is what happens in markets when new space is delivered,” Jeff Dowdell, senior vice president, Transwestern, tells GlobeSt.com.