Shadow Space Still Lingers Over CBD

The Franklin at 222 W. Adams and 227 W. Monroe had the most shadow space to fill. It lost two major tenants, but successfully released about two-thirds of that space.

CHICAGO—The opening of several new trophy towers in the West Loop have been the most notable signs of the CBD’s resurgence. The towers have also leased very well, and at record rental rates. But all this success left a number of big holes in the market, as top-tier users vacated older Central Loop properties and moved west. Some have begun to wonder if the downtown market will run out of gas before other tenants fill this so-called “shadow space.”

That worry led MB Real Estate to do a special report and break down the numbers on this one issue. Company researchers found that leasing activity at all of the new developments created 3.4 million square feet of space in the CBD that relocating tenants have or will vacate. Of that space, only 1.15 million square feet has been re-leased or re-used. A little more than one million square feet still needs new tenants, and 1.16 million square feet remains as shadow space that will become available over the next three years.