It’s no secret that the flight-to-quality in the office sector is a real trend. A growing number of companies seeking new office space are looking for high-quality buildings that feature modern amenities. The problem? In many markets, this type of office space is becoming difficult to find.
Just look at the Chicago central business district. Avison Young reported earlier in May that across the 451 office properties that make up the Chicago CBD, availability remains near record highs at 30%.
But when you look for quality properties with large blocks of space? Availability drops.
According to Avison Young, trophy office buildings make up just 9% of the office properties with large blocks of available space in the Chicago CBD.
Avison Young also reports that there is an inverse relationship between office space requirements and the number of properties that can accommodate them. According to the firm’s research, 22% of Chicago CBD office buildings can support a 50,000-square-foot lease. But only 16% of buildings meet that threshold when you limit the search to just trophy or Class-A office space.
Tenants seeking 200,000 square feet of contiguous office space have an even more difficult task, with just 3% of office buildings in the Chicago CBD able to accommodate such users. That figure drops to just 2.4% when you factor in both size and quality constraints.
Notable trophy office properties without 100,000 square feet of contiguous available space include 110 N. Wacker Drive, 150 N. Riverside Drive, 353 N. Clark St. and 444 W. Lake St.
There have been some large block office leases closed in trophy properties in the Chicago CBD office market, though. Avison Young pointed to Mesirow Financial renewing for 110,000 square feet at 353 N. Clark St. in the first quarter of 2024 and Ayden signing a lease for 97,000 square feet at 333 N. Green in the fourth quarter of last year. White & Case also signed a new office lease for 60,000 square feet at 300 N. LaSalle in the first quarter of 2024.
