Chicago’s Office Pipeline Shrinks, Sales Hold Up

Chicago’s office market is heading deeper into 2026 with a focus on shrinking and reshaping its downtown inventory rather than trying to outbuild its way to a recovery. With demand still uneven, policy and capital are increasingly aimed at reducing lower-tier supply, stabilizing occupancy and repositioning older buildings for new uses.

That shift is showing up in the metrics, as well. The metro had one of the thinnest construction pipelines among major U.S. metros as of April, according to Yardi Matrix information. In addition, sale prices remained deeply discounted relative to other gateway markets and vacancy eased only gradually. However, the Windy City’s investment volume ranked in the top 10 nationally.

Across 2025 and early 2026, Chicago’s most significant office market moves were on the inventory side. The city leaned on tax-increment financing and other incentives to advance several major Loop office-to-residential conversions, led by the LaSalle Street Reimagined initiative involving 105 W. Adams St., the Field Building and 30 North LaSalle. Together, these projects are set to take well over 1 million square feet of underused office space out of the city’s stock.

Sales rank high, pricing stays low

Chicago’s office investment volume year-to-date as of April clocked in at $714 million, ranking in the top 10 nationally. Manhattan ($2.9 billion), San Francisco ($1.6 billion) and Dallas ($1.1 billion) occupied the U.S. podium.

Assets in Chicago traded for $107 per square foot on average. This figure was half the U.S. value of $214 per square foot but also the lowest among gateway markets. Manhattan ($712 per square foot) and San Francisco ($686 per square foot) commanded the highest prices.

In February, David Werner Real Estate Investments and 601W Cos. acquired 175 W. Jackson Blvd. in Chicago for just $41 million, marking an 85 percent discount from its 2018 sale price. The 1.4 million-square-foot building traded after entering foreclosure in 2022. Brookfield previously owned it.

Another notable deal in the metro in the first four months of this year was Farpoint Development and The Landes Group’s purchase of Silver Cross Hospital’s Pavilion A, a 175,000-square-foot medical office building in New Lenox, Ill. PGIM Real Estate sold the asset for $86 million.

Chicago’s office pipeline remains minimal

When excluding owner-occupied properties, Chicago’s office sector had only 202,568 square feet under construction at the end of April, one of the smallest pipelines among the top 30 U.S. metros.

This figure represented only 0.1 percent of the total office stock, well below the 0.4 percent national average. All gateway metros fared better, with San Diego (1.7 percent), Boston (1.5 percent) and Miami (1.2 percent) leading nationally. When also taking into account planned projects, Chicago’s share rose to 0.2 percent.

One of the developments that is set to come online later this year is Uline’s 366,000-square-foot building at 9900 128th Ave. in Pleasant Prairie, Wis. The metro Chicago property broke ground in July 2024 and is scheduled for delivery this summer.

In the first four months of this year, office deliveries in Chicago totaled 386,928 rentable square feet and accounted for just 0.1 percent of the market’s total stock. One of the completed projects was 919 West Fulton, a 11-story building less than 2 miles from the city’s downtown that topped out in 2024. Fulton Street Cos. owns the mid-rise.

Vacancy trends lower, still above U.S. index

Chicago’s office vacancy rate as of April dropped to 18.2 percent, marking a 90-basis-point year-over-year decline. However, the figure was still above the 17.6 percent national average.

Among gateway markets, Miami (12.5 percent) and Manhattan (13.1 percent) had the least available space, while San Francisco (23.3 percent) and Seattle (25.2 percent) were at the opposite pole.

One of the largest office leases in the first four months of the year—The Inland Real Estate Cos.’ commitment to 140,000 square feet at 3050 Highland Parkway in Downers Grove, Ill.—closed in March. The company will use the space as its new national headquarters and plans to sell the building currently housing its corporate offices.

In April, Claire’s Holdings decided to relocate its headquarters from Hoffman Estate, Ill., to 43,200 square feet at Columbia Centre III in Rosemont, Ill. The company is set to move early next year to the 250,000-square-foot building owned by Rialto Capital.

In terms of asking rates, the Chicago office space reached $28.02 per square foot the same month, up 1 percent over the year. This was below the $32.91 national index and the lowest among gateway metros.

Chicago’s coworking sector remains a bright spot

Chicago’s coworking footprint totaled nearly 9.2 million square feet across 342 locations as of April, according to CoworkingCafe. The amount represented 2.8 percent of the market’s office inventory, 50 basis points above the national average.

The share also placed the Windy City high in the ranking of gateway metros. Miami led nationally at 4.2 percent, while Boston (2.2 percent), San Francisco (2.2 percent) and Washington, D.C. (1.9 percent) ranked at the lower end of the spectrum.

Regus remained Chicago’s largest operator, with more than 1.2 million square feet across 56 locations. Braveheart (775,266 square feet) and Expansive (707,321 square feet) rounded out the metro’s top three providers.

In the first quarter of this year, Carr Workplaces opened its second Chicago location at 20 North Clark, in the city’s downtown. One William Street Capital Management owns the 393,107-square-foot office building.