Development in Chicago has reached a fever pitch, and leasing for the new product is doing the same
It was a busy week for the Chicago skyline as two rumored new office towers were confirmed.
December 04, 2018
- It was a busy week for the Chicago skyline as two rumored new office towers were confirmed. BMO Harris Bank Tower and Salesforce Tower Chicago both anchored their respective new developments with plans to relocate upon completion in 2022 and 2023, respectively. These two projects are only the most recent in what’s become a long list for the next decade of development, which now totals six projects. From 2020 to 2023, downtown will deliver over 5.2 MSF of new office supply – or 7% of future Class A inventory.
- While the anticipated office supply climbs, what may be more circumstantial is the volume in which that space is leasing at several years from completion, in most cases. Of the 9.4 MSF of supply delivering in this current decade (2010 to 2019), over 7.1 MSF has been leased & pre-leased for those projects currently under construction.
- Why does it matter? Demand for new office product, particularly in Fulton Market and the northwest area of the West Loop, have performed at record preleasing levels. As a result, developers will continue to build spec in Fulton Market since tenant demand and rent growth has not tapered off and tenant demand.
Source: JLL Research