Chicago’s CBD office market showed mixed signals in the third quarter of the year, according to the latest research from Avison Young.
According to Avison Young’s third quarter 2025 Chicago CBD office market report, office leasing activity in the city’s urban centers reached 6.2 million square feet year-to-date, on pace for the strongest year since the pandemic.
At the same time, negative net absorption continued to ease, slowing by 16% annually. Avison Young says that these signs point to a potential rebound in office demand in Chicago’s CBD.
Leasing activity in the Chicago CBD reached 6 million square feet through the third quarter for the first time since 2022 and is up 9% on a year-over-year basis. On a less positive note, though, year-over-year activity remained mostly stagnant, with leasing activity in the CBD up just 0.2% from the third quarter of 2024.
Notable leases in the third quarter include Bain & Co. signing 173,000 square feet at the former Citadel Center and Motorola resigning for 97,000 square feet at 500 W. Monroe.
Negative absorption, unfortunately, remains a trend in Chicago’s CBD office sector. According to Avison Young, Chicago’s CBD has seen cumulative negative absorption each year since 2020. The CBD has seen negative 1.6 million square feet of office space absorption throughout the third quarter of 2025. The CBD office market saw negative 59,000 square feet of absorption in the third quarter this year.
On a more positive note, while negative absorption in Chicago’s CBD office market persists, the severity of it has diminished over time by an average of 16% a year. Avison Young says that this suggests an approaching trough and recovery period.
Office leases are getting smaller, too. Avison Young said that through the third quarter of this year the average office transaction size in Chicago’s CBD has fallen by 7% from 2024 to just 30,000 square feet. Trophy and Class-A lease sizes saw a 14% reduction during the same time, while Class-B and -C product saw dip in size of 21%.
This is a continuation of post-pandemic trends, with the total average office lease size down 16% from 2020 in the Chicago CBD.
