CHICAGO—The office market in downtown Chicago is in the midst of one of its best years since the onset of the economic recovery. In the third quarter, the CBD recorded a positive absorption of 300,854-square-feet, according to MBRE's just-published market overview.

This pace roughly matches what happened in the first two quarters, and year-to-date the CBD has about one-million-square-feet of positive absorption. “Through three quarters, the positive absorption in the CBD has already outpaced the most recent peak absorption figure in 2011 and, if current pace holds, will exceed the 2012 and 2013 figures combined.”

And Andrew Davidson, executive vice president and managing director of corporate services at MBRE, tells GlobeSt.com that part of the credit for this expansion goes to the diversity of the CBD's economy.

“Tech companies get the headlines these days because unlike a lot of tenants they are expanding,” he says. However, tech firms are currently soaking up a relatively small portion of downtown office space. The more commonplace businesses, such as financial and professional services, still account for most absorption.

The tech firms Enova, Valence Health and Uber did sign significant new deals for CBD space during the quarter for a combined total of 343,779-square-feet. But Davidson points out that the largest new deal was completed by Wintrust Financial, which took 179,332-square-feet at 231 S. LaSalle St. And the quarter's largest renewal was by the University of Chicago's National Opinion Research Center which extended its existing 88,000-square-foot lease at 55 E. Monroe and took another 30,000-square-feet.

“Of 146 tenants identified by MBRE as presently on the market for new space, just 17 of these are technology-specific,” according to another recent report produced by the firm. “The needs of these technology sector tenants are 12.5% of the 7,392,000-square-feet of total requirements of all active tenants.”

The direct vacancy rate sank to 13.75% by the end of the third quarter, a decrease of 20 bps. Tenants taking up space in class B buildings drove the market as the rate for these properties fell roughly 50 bps to 15.2%. The N. Michigan Ave. submarket did see negative absorption of 169,193-square-feet, but MBRE attributes this to the AMA's departure and DraftFCB's contraction.

MBRE expects the vacancy rate to continue declining. Furthermore, as long as the market does not receive any major shocks, the healthy trend should continue at least until 2017, when developers will deliver Chicago's newest trophy towers at 444 W. Lake St. and 150 N. Riverside in the West Loop.

And over the long-term, Davidson remains quite confident that a growing array of users will absorb space as it opens. “If you look at the nation's demographic trends, you will see that we have huge numbers of baby-boomers, about 11,000 per day, which will retire in a few years. They are going to have to be replaced with younger workers, and for the most part, those workers are not in the suburbs.”