Chicago Vacancy Sets Record With New Development

The Real Deal reports that demand for Chicago offices is building in the post-pandemic situation, but notes that new supply is growing faster and buildings are staying empty. Sources said in April that the conundrum is a result of a new record-high vacancy rate of 21.2% in the city’s CBD — the second-largest in the nation — at the end of March, according to sources. That amount is up from 19.7% on January 1, and the previous historic high of 20% set in the third quarter of last year. Recent reports suggest the vacancy-rate increase was driven by new supply hitting the market, rather than tenants pulling out of offices. For example, the new, 1.5-million ft² BMO Tower by Union Station has been completed but still has almost half the building available. At least three other new developments are also mostly empty, adding a total of 8% more space than was available at the end of 2021. Before the pandemic, the CBD’s vacancy rate was 13.8%, and new records were set in four of the past five quarters, officials have reported.