Entering 2025, investors are seeing plenty of runway for commercial real estate in Chicago, including the area around O’Hare International Airport.
As a small, centrally located submarket with proximity to the airport and local attractions like Allstate Arena and the Donald E. Stephens Convention Center, the O’Hare area has proven resilient after the pandemic and is attracting new investments across diverse real estate sectors, even ahead of the airport’s planned expansion, whose first phase is expected to open in 2028.
Emily Johnson, president of Taylor Johnson Public Relations
Hospitality
Large events downtown have helped bolster hotels throughout the region, including near O’Hare, where hotels reported a 54.5% year-over-year growth in revenue per available room during last summer’s Democratic National Convention, according to data from CoStar. The O’Hare submarket ranked second only to Chicago’s central business district, which reported a 74.7% increase during the convention, to $162.70.
This suggests more travelers are preferring to stay near O’Hare during short trips to Chicago, taking advantage of public transit to commute to and from downtown. To capitalize on demand from both business and leisure travelers, firms like Bradford Allen are updating existing properties and, in some cases, introducing new brands. In November, Bradford Allen began a $25 million renovation to transform the Hyatt Rosemont Chicago/O’Hare hotel, located across the street from the recently expanded Rivers Casino, into the new Hyatt Centric Rosemont, marking the concept’s first location in suburban Chicago.
Once open this spring, the 206-room Hyatt Centric Rosemont will be one of only a few lifestyle hotels near O’Hare, combining the efficiencies of a big brand like Hyatt with the design and service of a boutique hotel. The extensive improvements entail a full gut rehab of the property, with updated guest rooms, 12,000 square feet of modernized meeting space, a refreshed ballroom capable of accommodating 500 people and improved fitness center. In addition, what once was an American eatery will be transformed into an upscale, beverage-forward destination restaurant with outdoor seating.
Bradford Allen hopes the hotel, with its location near the airport, casino, Fashion Outlets of Chicago and other attractions, will be a convenient option for short-term travelers who don’t have the time or budget to stay downtown but still desire an “urban lifestyle” hotel destination with elevated dining and other amenities you typically don’t find in the suburbs.
Office
The office market near O’Hare is outperforming the suburban average, with total vacancy standing at 21.6% at the end of the fourth quarter compared to 26.3% for the suburbs overall, according to research from NAI Hiffman.
Roughly bordered by Cumberland Road, Touhy Avenue, Higgins Road and Allstate Arena, the O’Hare office submarket is relatively small, both geographically and in terms of square footage, at only 14 million square feet (compared to 40 million square feet, for example, in the East-West Corridor along Interstate 88). The area was never overbuilt with offices because available development space is so limited, according to Joel Berger, senior managing director of Bradford Allen, helping to keep its vacancy rate lower than some other submarkets. Its central location in Chicagoland has become a major selling point as more businesses push return-to-office policies in 2025 and beyond and is helping to drive office demand.
Glenstar, along with a high-net-worth private investor, last October acquired and recapitalized Presidents Plaza, a two-tower, 831,000-square-foot office complex near O’Hare. The partnership paid $62 million for the property and set aside nearly $16 million to build out spec suites, or built-out, move-in ready office spaces, as well as upgraded building amenities including a golf simulator. Other upgrades included a redevelopment of the three-story atrium lobby, three-level health club, tenant lounge, café with full seating and 6,300-square-foot conference center facility.
Sports
Another bullish sign for the O’Hare submarket is the new $34 million ice arena under construction across the street from Allstate Arena by general contractor Nicholas & Associates.
Located on 3 acres, the new 103,000-square-foot, two-rink complex will offer prime ice time for youth hockey groups; nightly ice time after 10 p.m. for adult hockey leagues; and exclusive daytime use of one of the rinks by the Chicago Wolves professional hockey team. The complex will also contain a bar, restaurant and physical therapy clinic when it opens next year.
So far, almost a dozen hockey clubs have signed agreements to use the space, and organizers hope, with its location near O’Hare, that the venue will host regional and national hockey tournaments as well.
Multifamily
Multifamily transaction velocity has been robust in the O’Hare submarket over the past year. There were 10 deals in 2024 for apartment buildings of six units or more, equating to more than $11.5 million in sales volume, according to CoStar data. Interra Realty brokered half of them, most recently the $3.7 million sale of a two-property, 24-unit multifamily portfolio located just east of the airport, a transaction that closed in October 2024.
According to Paul Waterloo, managing partner at Interra, several factors contribute to the strength of the O’Hare multifamily market in addition to its excellent location, including healthy rental performance, low tenant turnover and value-add opportunities.
Many of the apartment buildings in the O’Hare submarket are held by long-term owners. When one of them goes up for sale, they typically do so with below-market rents. This provides an opportunity for the new owner to make renovations that enhance property value and command higher rents. In fact, the O’Hare submarket is known for the long tenures of its renters. The low turnover rate helps owners minimize maintenance costs and fosters more predictable revenue streams, making the market particularly attractive to investors. Apartment buildings near O’Hare do not hit the market very often, but when they do, investors seeking reliable returns and growth potential are quick to put in offers.
The airport itself is a major source of area employment, driving demand for rental housing nearby, while convenient public transit and highway access also allows for an easy commute to downtown and other job centers.
Industrial
O’Hare also boasts a stronger-than-average industrial market, with a total vacancy rate of 4.1%, compared to 5.8% for the broader suburbs as of the fourth quarter of 2024, according to NAI Hiffman. Demand remains particularly strong for smaller facilities, but land availability is extremely limited.
To address this challenge, developers are identifying smaller infill sites — sometimes by combining multiple parcels — where they can renovate or, more commonly, build new Class A warehouses. Last year, CRG announced plans for The Cubes at ORD, a 66,552-square-foot speculative industrial project on 4.27 acres at 3901 Fleetwood Drive in Franklin Park, Ill., immediately southeast of the airport. The multimodal facility has direct access to Interstate 294 and O’Hare and can accommodate small and mid-size users looking for modern space in one of Chicago’s most supply-constrained submarkets.
The examples above show the resolve and appeal that the O’Hare submarket demonstrates across multiple real estate sectors, even in today’s higher interest rate environment.
This momentum will continue due to strong fundamentals, such as tight supply and proximity to one of the world’s busiest airports. As we look ahead to O’Hare’s expansion, the surrounding area is well-positioned to remain a hub of activity and standout performer in Chicagoland’s real estate market.
Emily Johnson is president of Taylor Johnson Public Relations, a Chicago-based PR agency focused exclusively on real estate for more than 45 years.
