A report from Colliers International shows that Chicago’s Downtown office vacancy reached a 15-year high during the first quarter of 2021.
The vacancy sat at 16.1% from January through March, which was a percentage point higher than the previous quarter. The report also found that office availability hit 22.3% during the first quarter compared to the 16.8% seen during the same time in 2020.
“A real reset will begin once businesses return to their office spaces and reassess workplace needs,” the report said. “Although there is some optimism in the market with a slight uptick in activity compared to last quarter, a return to market ‘health’ is a long way off.”
Companies who have downsized or walked away from their leases have greatly impacted the market over the past year or so. Potential for new developments have also been put on hold or scrapped, such as Nexstar Media Group and Riverside Investment & Development’s 1.2 million square foot office and residential complex.
The report noted there was still 3.9 million square feet under construction during the first quarter, but that this was a significant dip from the 5.3 million square feet during the first quarter of 2020.
While the report anticipates office activity to pick up during the summer, recovery will be slower than what has been seen during past recessions.