Chicago’s downtown office market strengthened in 2025, with higher leasing activity, increased transactions, and renewed investor interest signaling stabilization after years of post-pandemic volatility, according to BisNow.
Office sales activity rebounded late in the year. Colliers reported 37 buildings over 20,000 square feet sold in 2025, up from 27 in 2024. In the fourth quarter alone, 13 properties changed hands, reflecting distressed pricing, refinancing, and value-add strategies.
Notable trades included:
- 190 S. LaSalle Street sold for $55 million, down from $230 million in 2019.
- 100 N. Riverside Plaza leasehold interest purchased by Hines and Stahl Organization for $22 million, with Boeing leasing back 70,000 square feet.
Leasing Volume Hits Post-Pandemic High
Leasing activity rebounded to 10.3 million square feet, the strongest total since 2019, according to Savills. Net absorption improved in Q4, registering 27,000 square feet of negative absorption, compared with 654,000 square feet of negative absorption in Q3, Colliers reported.
Colliers Executive Vice President Dougal Jeppe said, “Office is not dead, and good office and good markets can be a good play.”
Vacancy Remains Elevated
Overall downtown vacancy ticked up to 24.6%, a record high. The divide between higher- and lower-quality buildings persists: Class-A vacancy is 20.0%, while Class-B buildings sit at 30.5%. Brokers expect vacancy in quality Class-A buildings to decline in 2026.
Major Tenants Drive Growth
Large law firms accounted for the biggest expansions in Q4:
- Benesch Friedlander Coplan & Aronoff expanded 130,000 square feet at 71 S. Wacker Drive.
- Ropes & Gray renewed and expanded 105,000 square feet at 191 N. Wacker Drive.
Other significant deals included USG Corp.’s 160,000-square-foot extension and contraction at 550 W. Adams Street and a 123,000-square-foot renewal by Brookfield Retail Properties at 360 N. Orleans Street.
Costs Stabilizing in Top Buildings
Some trophy buildings began to see operating expenses and property taxes stabilize or decline, improving underwriting assumptions and supporting renewed investor interest in premium assets.
While older Class-B properties remain under pressure, downtown Chicago’s office market shows momentum in leasing and sales activity. High-quality assets and tenants with long-term office strategies are driving cautious optimism for 2026.
