Demand grows for Chicago Class A office space and better amenities, study shows
The divide in Chicago’s downtown office market continues to widen between the top assets and everything else.
Average asking rents for Class A properties in the third quarter increased by 0.4% compared to Q2, up to $49.27 per square foot, an all-time high, according to a report from commercial real estate firm Savills.
Class A availability tightened slightly to 19.3% in the quarter, while Class B availability rose to an all-time high of 29%.
Chicago’s Central Loop had the most available office space at 29.1% despite having one of the lowest rental rates among Chicago’s downtown submarkets as Mayor Lori Lightfoot has made diversifying downtown LaSalle Street, which cuts right through the Central Loop, a priority moving. That area has the highest commercial and retail vacancy rates downtown, studies show.
Despite some of the vacancy challenges seen across downtown Chicago, North Michigan Avenue had the least available space at 17.3%, according to the Savills report, with River North next at 22.5% and Fulton Market and the West Loop both at 23.3%.
Savills brokers expect Chicago office availability to tighten through the end of the year as more employees return to work.
Class A demand leads to amenity race
In a market that is increasingly moving towards the best assets, more companies are trying to stand out in an amenity race as they try to attract their employees back to the office.
One Two Pru, for example, a two-tower office and retail complex in Chicago’s East Loop, the downtown Chicago submarket with the least expensive rental rate, recently added new amenities that are a little outside the box but are designed to bring home life to the office.
For instance, the complex has added The Nest, a lounge featuring three lactating rooms, and Wooftop Terrace, a 300-square-foot play area for tenant dogs on the building’s 11th-floor rooftop terrace overlooking Millennium Park.
Office tower in downtown Chicago looks to add a diverse array of amenities to standout in an increasingly competitive market. WILL EDWARDS AND JASON SPETH
Greer Worthington, VP of Culture & Hospitality at One Two Pru, told the Chicago Business Journal that while most buildings these days have a lounge and fitness center, “no one has these amenities.”
She said One Two Pru is always looking to differentiate itself and provide Class A amenities that mirror what it’s like to be at home while staying ahead of the trends.
Read the online article here.
