Lindenmeyer notes that the Chicago office market is not without some headwinds going forward. "There is a lot of uncertainty permeating the market, however, given the upcoming election and the inversion of the yield curve, which has raised concerns about a downturn," he says. "Certain tenant sectors are creating the absorption necessary to maintain positive momentum for new and redeveloped buildings as we head into 2020."

According to Avison Young research, there are currently 16 properties under construction within Chicago's CBD. The new construction is being absorbed in Chicago's office market as tenants focus on the efficiency of the buildings and the value seen in their respective locations.

"What tenants are doing is right-sizing, adjusting their approach to work flow, and going into more efficient spaces," notes Lindenmeyer. "With a smaller footprint, they can afford the higher rents in the new buildings."

Office vacancy in the top five largest markets were flat or improved in the second quarter. New York posted a 9.8% vacancy rate, Philadelphia had a 8% vacancy rate, Washington, DC registered a 13.9% rate, Chicago came in at 13.1% and Dallas had a 16.5% rate. The lowest overall office vacancy rates were in: San Francisco (2.1%); Gainesville, FL (4%), Savannah, GA (4.6%), Austin (5.1%) and San Mateo, CA (6.3%).

Downtown office markets outperformed suburban locations, as overall downtown vacancy fell 70 basis points to 10.4% in the second quarter, while suburban market vacancy improved 40 basis points to 12%.