Facing a challenging economic environment, the Chicago CBD’s office sector saw its vacancy rate rise, leasing activity drop and net absorption fall into the negative numbers once again in the first three months of the year, according to Cushman & Wakefield‘s first quarter 2026 Marketbeat report.
According to Cushman & Wakefield, Chicago’s CBD recorded 1.4 million square feet of new leasing activity during the first three months of 2026. That’s a drop of 9.4% on a year-over-year basis.
The flight to quality remained a real phenomenon in the local market. Cushman & Wakefield reported that tenants leased 794,000 square feet of space in Class-A office properties in Chicago’s CBD during the first quarter. That figure accounted for 55.5% of all new office leasing activity during the first three months of the year in the Chicago CBD.
The average new office deal size increased 0.6% year-over-year to 9,000 square feet, while Class-A office leases averaged 14,200 square for the first quarter.
New leasing activity was concentrated in Chicago’s West Loop neighborhood, with Cushman & Wakefield reporting that this area captured 43.1% of the total office leasing activity in the CBD during the quarter with 617,000 square feet leased. Despite leading the way, the West Loop’s office leasing activity was still down 14.9% from the same quarter a year earlier.
Despite less activity, the Chicago CBD did see some notable office leases in the first quarter. This included Mars Wrigley’s 170,000-square-foot lease at 400 N. Aberdeen St. in the Fulton Market District, IMC’s new 104,000-square-foot lease at 233 S. Wacker Drive in the West Loop and the Illinois Housing Development Authority’s 62,000-square-foot lease at 100 N. Riverside Drive in the East Loop.
Overall net absorption remained negative for the 10th consecutive quarter in this market, totaling negative 1.1 million square feet, according to Cushman & Wakefield. Not all submarkets performed equally, with the River North market posting 165,000 square feet of positive absorption during the first three months of the year, the highest quarterly level for this submarket since 2023.
This continued negative absorption meant that the overall office vacancy rate in the Chicago CBD increased 80 basis points quarter-over-quarter to 27.4%. Class-A vacancy increased 90 basis points to 23.9%. Trophy assets continued to outperform the rest of the market, with vacancy in these assets falling 490 basis points on a year-over-year basis to 13.6%, Cushman & Wakefield reported.
Don’t expect much new office construction in Chicago’s CBD in the coming months. Since 2025, just two office properties have been delivered in Chicago’s CBD for a total of 434,000 square feet. That’s quite low, considering that between 2016 and 2024, 41 office buildings were completed in this market for a total of 16.1 million square feet.
