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Report: Office Vacancy in Downtown Chicago Hits 15-Year Low

The latest numbers bode well for current and upcoming office projects

Dipping to 11.7 percent this quarter, downtown Chicago’s office vacancy is now at its lowest level since the figure hit 11.6 percent in Q2 of 2001. The news, reported by Crain’s Chicago Real Estate Daily, bodes well not only for current commercial landlords, but also the city’s pipeline of upcoming skyscrapers towers. As things stand today, downtown Chicago has no less than four Class A towers currently under construction.

At the confluence of the Chicago River’s three branches, the high-profile River Point and 150 N. Riverside buildings from respective developers Hines Interests and Riverside Investment & Development are topped-out and are essentially fully leased. Nearby, John Buck’s 151 N. Franklin is well underway and will be the Chicago HQ of the CNA Financial Corporation. While a lack of committed tenants has the proposed 44-story office tower slated for 590 W. Madison currently on hold, the short supply of new office space might see the project revived. Forgoing the tenant search, developers White Oak Realty and CA Ventures are betting on a strong market and are constructing their smaller, 20-story project at 625 W. Adams entirely on spec.

Meanwhile, recent site preparation at the future location of Tishman Speyer’s 130 N. Franklin points to at least one more tower potentially moving forward, though no tenants for the 700-foot crystalline skyscraper have been announced so far. Though overall vacancy is just a single indicator of the market’s strength and new vacancies created by existing downtown companies relocating to new buildings is a concern, Chicago’s office sector is looking strong in 2016.