Leasing activity in the Chicago suburban office market remains sluggish. Despite this, there are still positive signs in this sector, according to the latest research from Colliers.
In its first-quarter Chicago suburban office market report, Colliers said that despite slower leasing activity, growing tenant tour activity and a rise in active requirements are providing a confidence boost among both tenants and landlords in the Chicago suburbs.
Colliers said that these positives could mean stronger leasing momentum in the Chicago suburban office market throughout the rest of 2026.
Colliers says that leasing activity should increase especially in Class-A office assets. And the ongoing repurposing of outdated office properties into alternative uses, including medical, residential and industrial, should also provide some relief from higher suburban office vacancies.
Then there are the users of headquarters space. Colliers said that these users are increasingly making long-term occupancy decisions while still right-sizing their footprints. This, too, could lease to an increase in suburban office leasing.
The overall office numbers, though, for the first quarter of the year remain down. Colliers reported that the Chicago suburban office vacancy rate stood at 26.8% as of the end of the first quarter, while the market recorded negative 151,000 square feet of absorption.
Overall asking lease rates for the Chicago suburban office market remained stable at $25.54 a square foot. The overall asking rate per-square-foot for Class-A office properties in this sector was a more robust $32.54.
Not every suburban submarket performed equally well. The Oak Brook submarket outperformed others for the second consecutive quarter, ending the first three months of the year with a vacancy rate of 23.2%.
The Northwest submarket has shown improvement during the past two years but remains the most challenged within suburban Chicago. This office submarket closed the first quarter with a vacancy rate of 32.5%.
As Colliers says, the gap between these two submarkets highlights the uneven pace of recovery for across the suburban office market and reflects the preference among tenants for higher-quality buildings in established locations.
A total of 12 office leases larger than 15,000 square feet were completed in the Chicago suburbs in the first quarter, collectively accounting for more than 450,000 square feet of activity.
Notable transactions included Inland Real Estate’s 140,000-square-foot lease at 3050 Highland Parkway in Downers Grove, Power Construction’s 55,000-square-foot lease at O’Hare Plaza in Chicago and Claire’s 43,000-square-foot lease at 925 W. Bryn Mawr Ave. in Rosemont.
During the first quarter, four suburban office properties totaling more than 500,000 square feet traded hands. These included STG Group’s acquisition of One and Two Conway Park, a 225,534-square-foot asset in Lake Forest, and Sterling Properties’ purchase of Northfield Plaza, a 117,698-square-foot office property.
KJM Capital Fund, LLC acquired Three Hawthorn Parkway, an 85,687-square-foot building in Vernon Hills, while the 71,089-square-foot Deerpath Office in Vernon Hills was sold to an undisclosed buyer.
