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2021 Q3 Chicago Downtown Office Report

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Growing Confidence in Class A Assets Despite High Vacancy

The current market downturn has not followed the typical recovery trends of previous downturns where recovery happened within four quarters of their onset. Six quarters into the pandemic, vacancy increases and additional negative absorption will continue to the end of 2021. The office market is beginning to show signs of life with new deals and expansion signings, but those deals will not reverse the downward trend until mid-2022. Most positive activity is focused primarily on Class A assets.

Key Takeaways

  • Chicago CBD vacancy increased to 17.7% total CBD vacancy – a new record high in Chicago office history, but increased activity, especially in Class A assets, points to a rebound in 2022.
  • This remains a tenant favored market as landlords continue to offer creative lease deal incentives to quality tenants in the market.
  • Outlook is optimistic looking forward to 2022 as an uptick in return to physical offices seems likely.

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2021 Q3 Chicago Downtown Office Report

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Sandy McDonald

Senior Director of Research

Chicago - Downtown

I am the senior director of research at Colliers | Chicago and lead the Office Advisory Group’s market research initiative. I am responsible for building and maintaining competitive market intelligence which includes the office properties database of property sales and leases, tenant information and comparable transactions.

I also manage daily operations including the collection and analysis of market and economic-related statistics, providing clients with customized reports and in-depth interpretation of underlying trends in the market. In addition, I compile proprietary quarterly office market statistics and reports for business development and client support purposes. I am considered an expert in the field and am frequently featured in industry newspapers and publications. 

I have 13 years’ experience in commercial real estate research. Prior to joining Colliers, I served as director of market research at Transwestern. Prior to Transwestern, I spent three years at DTZ (now Cushman & Wakefield) as the senior research analyst for Chicago. Prior to joining DTZ, I spent four years with Grubb & Ellis (now Newmark Knight Frank) in Chicago as an office research analyst and support for the industrial services team.

In addition to commercial real estate experience, I've had extensive experience in the mortgage industry as a mortgage sales executive with Option One Mortgage. I not only researched, marketed, brokered and sold mortgage products to clients but also managed a team of account managers, handling account issues and client resolutions. I also developed training, introduced new products to clients and streamlined procedures in company offices.

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