Downtown Chicago’s office market is showing signs of stabilization, according to a recent report by Bradford Allen. While direct vacancies hit a record 23.4%, the increase was marginal, and absorption losses improved dramatically to just 173,000 square feet compared to over 1 million in late 2024.
Office investment sales more than doubled year-over-year to $156.7 million, driven by price corrections and conversions removing obsolete inventory. Leasing totaled 1.7 million square feet, with the West Loop leading activity. Fulton Market remained tight with 15% vacancy. Spec suites gained traction, comprising 39% of leases.
Major expansions included Goldman Ismail, Stripe, and Blue Owl, while BP renewed its 240,000-square-foot lease at 30 S. Wacker Drive. Two new office-to-residential conversion proposals could deliver 300 units and remove over 130,000 square feet of office space.
“The latest data suggests growing confidence, and a potential turning point, for Chicago’s downtown office market,” said Neil Bouhan, senior managing director of research at Bradford Allen. “This surge in investment activity, price adjustments and conversions are fundamentally rebalancing supply and demand.”
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