CHICAGO—The direct vacancy rate among the Chicago CBD's top office properties increased by 160 bps in the second quarter to 10.6%, according to a mid-year report from MB Real Estate. Meanwhile, the overall direct vacancy for the CBD increased to 11.6% at the end of the second quarter, a 50 bp increase from the previous quarter.

MBRE publishes a study each quarter on last 30 class A office buildings greater than 300,000 square feet built in the CBD. The company calls this set of buildings, which contains some of the city's most desirable space, “a leading indicator of office market conditions.”

Its researchers attribute the rise in vacancy for these trophy properties to two recent relocations that also show the trend toward downsizing is not yet over. Societe Generale moved from about 130,000 square feet at 550 W. Jackson into about 52,000 square feet at 440 S. LaSalle, and Seyfarth Shaw moved from about 300,000 square feet at 131 S. Dearborn into 200,000 square feet at 233 S. Wacker.

The largest lease signed at a top property in the last three months was Honigman Miller Schwartz & Cohn's sublease of 28,077 square feet at 155 N. Wacker, MBRE finds. Furthermore, the average asking rent within the top 30 buildings is $28.39 net per square foot, and there are currently six blocks of directly available space larger than 100,000 square feet. 161 N. Clark is the only one of the buildings currently for sale. MBRE says the nearly 1.1 million square foot office building is worth about $400 million.

MBRE has added three new buildings to the list in the last three years: Sterling Bay's 1KFulton, the regional home of Google, was added in 2015; Hines' 444 W. Lake opened in late 2016; and John O'Donnell's 150 N. Riverside opened for business this April. MBRE says the vacancy rates for the trio are 0.9%, 16.5% and 18.3%, respectively, a good sign that trophy spaces are quite attractive to users.

Outside of MBRE's set of 30 trophy buildings, the largest recent new deal was Northern Trust's lease of 462,000 square feet at 333 S. Wabash. The building is currently CNA Financial's headquarters. CNA has decided to move into 151 N. Franklin, a building that John Buck will open in 2018.

Instant Insights /

Vacancy Rate Rises in Top Office Properties

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