The long-term changes to how we live and work brought by the pandemic continue to wreak havoc on the commercial real estate market. In Chicago, in April, the city’s central business district hit an all-time high vacancy rate of 22.4 percent in the first quarter.
According to the Guarantor, the vacancy rate was a result of a surplus of office space, continued layoffs of workers, and of course the “lingering” remote work trend.
A metric called net absorption, which measures the delta between space occupied and the space tenants have gotten rid of, fell below zero for the first time since fall 2021. CBRE says the net absorption in the first quarter in Chicago was negative 323,000 square feet.
Chicago’s central business district currently has 7.5 million square feet of space available for rent, more than double from the 3.3 million it had available at the beginning of the pandemic.
There is evidence, however, that new construction and Class A buildings are faring better than traditional or class B buildings. Class A buildings’ vacancy rates dropped from 20.1 percent to 17.9 percent over the last year, while Class B buildings’ vacancy rate rose from 22.1 to 26.6 percent.
Greg Zimmerman is senior contributing editor for FacilitiesNet.com and Building Operating Management magazine.
