Chicago’s Office Sales Show Resilience

Chicago’s office market ended 2025 with slow development and steady sales activity, according to Yardi Matrix data.

The metro’s pipeline remained thin, behind most gateway markets. As for completions, they accounted for only 0.2 percent of Chicagoland’s total inventory.

On the sales side, the metro outpaced several similar markets for investment volume in December. This was especially relevant since assets traded for the lowest price in the U.S., an amount just over one-third of the national average.

Another bright spot for the market involved the coworking subsector. Its inventory continues to rank among the largest in the country, signaling sustained demand for flexible workspace.

Chicago’s thin office pipeline

Chicago’s office development pipeline at the end of 2025 comprised 571,576 square feet, according to Yardi Matrix data. This accounted for 0.2 percent of the metro’s total stock, half the national threshold.

Seattle (252,963 square feet) is the only gateway market that lagged behind, while Boston (4.4 million square feet) and Manhattan (2.3 million square feet) were in the lead nationally. When also taking into consideration Chicago office space that’s in planning stages, the figure rose to 0.7 percent, still well below the U.S. average.

Halfway through last year, Inspired by Somerset Development started work on the second phase of Bell Works, one of the top projects underway in Chicago. Also known as West Side, the phase calls for the transformation of 430,000 square feet of traditional office, 35,000 square feet of office suites for short- and long-term leases and 70,000 square feet of retail. Upon full build-out, the development will comprise 1.6 million square feet.

As for office completions, five office projects came online in Chicago in 2025. They total 622,320 square feet and account for 0.2 percent of the metro’s total inventory.

In the third quarter of this year, a joint venture between Trammell Crow Co. and Beacon Capital Partners completed Hyde Park Labs within Chicago’s South Side neighborhood. The developers took out a $136 million note to deliver the 302,388-square-foot life science building.

Sales stay strong, prices remain low

Chicago’s office investment volume for 2025 clocked in at more than $1.1 billion. The metro fared better than gateway markets such as Miami ($771 million) and Seattle ($779 million), but lagged behind the rest. Manhattan ($7.8 billion) ranked first nationally.

Chicago assets traded at an average of $65 per square foot, the lowest price among gateway markets. The figure also was only slightly more than one-third of the national index. Manhattan ($528 per square foot) and San Diego ($332 per square foot) assets commanded the highest prices in the U.S.

At the beginning of last year, Glenstar Properties paid $68 million for 200 S. Wacker Drive, a 754,891-square-foot office building within the city’s central business district. The previous owner, Manulife, had acquired the LEED Silver-certified property for $214.5 million in 2013.

Chicago’s stable office vacancy rate

Chicago’s office vacancy rate dropped 20 basis points year-over-year at the end of 2025, clocking in at 18.6 percent. This figure was slightly above the 18.4 percent national average. Among other gateway markets, the metro ranked somewhere in the middle, between Manhattan (13.6 percent) and Seattle (27.2 percent).

In May, Vantive leased 670,000 square feet at the Corporate 500 office campus in Deerfield, Ill. The company—a spinoff of Baxter International—will use the space as its new headquarters. Opal Holdings owns the four-building property.

Other notable leasing deals in the metro included BP’s lease extension for 240,000 square feet at CME Center. The oil and gas firm has been a tenant at the property since 2009 and will keep its office there at least through 2032. Tishman Speyer owns the campus located in the West Loop submarket.

The metro’s average asking rate in December was $28.31, below the $32.86 national benchmark. Still, local rates increased 3.7 percent year-over-year, while the U.S. average declined by 80 basis points, narrowing the gap between the two.

A steady coworking footprint

Chicago’s coworking footprint totaled nearly 9 million square feet at the end of last year, trailing only Manhattan’s 12.4 million square feet, according to CoworkingCafe data. Flex space represented 2.7 percent of Chicago’s office inventory, about 50 basis points above the 2.2 percent national average.

Regus remained the metro’s largest provider, with roughly 1.2 million square feet across 54 locations, followed by Braveheart (775,266 square feet) and Expansive (745,344 square feet).

Workbox has a smaller local presence, at nearly 310,000 square feet, but last year it opened its largest U.S. location in Chicago’s downtown. The 68,000-square-foot, two-story space is at Civic Opera Building, a century-old landmark.