Chicago Metro's Office Market Humming Along

600 West Chicago, the home of Groupon, was purchased by Sterling Bay from Equity Commonwealth for $510 million, a sign the investment market will have a good year.

CHICAGO—The Chicago region’s office market has gotten off to a good start in 2018. The opening of several new trophy towers since 2016 has not had an adverse impact on the overall vacancy rate, which continues to fall. It now stands at 16.9%, a drop of 50 bps since the end of 2017, according to a new report on the first quarter by Newmark Knight Frank. And metro net absorption hit nearly 620,000 square feet, a significant jump over last year’s first quarter total of 462,000 square feet. Furthermore, average asking rent increased from $27.42 to $29.09.

“The metrics are all pointing to a strong 2018,” Amy Binstein, research manager of NKF, tells GlobeSt.com. “We’re seeing signs already.” The metro area’s investment sales, for example, reached $1.2 billion by the end of February, according to Real Capital Analytics. Last year, the market did not cross the billion-dollar threshold until May.