The local major brokerage houses have differing opinions on where the CBD office vacancy rate is, between 11.6% and 13.4%, but all agree that while it had been going down, it's now rising back up because tenants are getting nervous and holding off on deals. "I think we won't see vacancy rates continue to drop, but will stabilize and creep back up," says Lisa Konieczka, an EVP with CB Richard Ellis. "However, landlords will still want to meet their pro-forma goals."

Todd Mintz with Equis Corp. says market rental rates are at their highest point in the CBD, a figure right around $37 per sf, and prices will likely hold steady regardless of the economy, especially with the top class A properties. "The really high-floor, class A rate is going to stay high, but the rest of the space will drop," he says. "But we're still looking at one of the worst times for our tenant clients to make deals. We will try to get them a short-term extension, try to get them into the market later this year, which will be a far better time for striking a deal."

Tiffany Winne, corporate managing director with Studley, agrees that the demand for top-of-the-market space still sees people willing to pay premium prices. "I know that at the new 300 N. LaSalle, there's not any unencumbered full floors left to lease," she says. "But the landlord-favored market is starting to evaporate. If we're right, this will turn out to be one of the shortest landlord-favored periods that we've gone through in 20 years. We did a study that showed that tenant-favored periods, since 1987, lasted four-to-six years, while landlord-favored markets lasted two-three years, and this last one would set a record."

The last three-to-six months has ended the short-lived landlord cycle, says Mike Sessa, a managing principal with Staubach. "We're seeing the inventory about to come into the market in 2009-10, and couple that with the uneasiness in the economy and the election, it has everyone nervous, and certainly has landlords nervous, they're starting to lose their momentum. On the tenant side, we're taking deals on a case-by-case basis, some users are being very thoughtful about deals."

There are large deals out there waiting to land, he tells GlobeSt.com. You've got BP looking for several hundred thousand sf, KPMG out for about 300,000 sf, and Ernst & Young also out for about that much, he says. "I know Mercer is close to signing a deal at 155 N. Wacker, and we have the American Medical Association very close to deal for the Union Station redevelopment."

What these large tenants do in the next 12-15 months, whether they renew, relocate into second generation space, anchor a new building or leave the market altogether, will have a major impact on the CBD market, Konieczka says. "Demand is just stalled as corporations look to see what happens with the economy. Landlords need to make the decision if they're going to hold rents high, it's a matter of who will be the first to blink," she tells GlobeSt.com.

However, there's still a halo of good news surrounding Chicago, says Tamara Kos, and EVP with Transwestern. No matter how high the rates are, or even if they're lowered, the city is still one of the best deals, she tells GlobeSt.com. "In comparison to other markets, such as San Francisco, New York City or even London, Paris or Singapore, a major international firm in Chicago pays a fraction of what it would pay in those cities. Plus, there's not that much barrier to entry, we're one of the most development-friendly cities in the whole country."

Though he didn't have much time to talk Thursday after arriving back from a Phoenix office market conference, John Abuja, an associate VP for Marcus & Millichap Downtown Chicago, did agree that his city is seen in a strong positive light by the rest of the world. "Investors are favoring Chicago, we're in the top four or five for where they'd prefer to spend their dollars in 2008," he says.