JLL just released the Q1 Downtown Chicago Office Outlook. The report has some great insight into recent market activity and provides a forecast for the year ahead.

1. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2017
Downtown Chicago
Office Insight
Chicago has seen a growth rate of 15.3 percent for educated millennials in its
downtown core in the past five years. This influx of millennials has altered the
demographics of the city, as 79.0 percent of Chicagoans now have a
Bachelor’s degree or higher.
The urban migration phenomenon is showing no signs of slowing, and our
demand forecast remains strong throughout 2017. While many tenants also
remain committed to the suburbs, there is almost no company that does not
at least ask the question of whether they should consider a downtown
presence or a full-scale move to the CBD.
Following the urban migration trend, Hickory Farms relocated its
headquarters to Downtown Chicago from Ohio, Caterpillar is relocating its HQ
from the more rural Peoria, and EXP is relocating from the Toronto area. The
three headquarters relocation plans were all announced in 2017, leaving
many to wonder what other companies will follow suit this year. Fulton Market
is experiencing strong demand from local tenants seeking to relocate, which
has provided support for aggressive pricing comparable to other hot
submarkets like River North.
Outlook
There are a number of development projects pending approval of DX-5 zoning
in Fulton Market and several others waiting for the City of Chicago’s review on
the case to revise the PMD-3 zoning. Once hubs for heavy manufacturing,
Goose Island and the Clybourn Corridor are the newest emerging submarkets
for prospective mixed-use developments. Both submarkets fall within the
PMD-3 area which is being considered for land use modernization. This is the
most important topic to watch in Chicago commercial real estate today, as
several large developments hinge on the decision.
Fundamentals Forecast
YTD net absorption 374,230 s.f. ▲
Under construction 4,815,290 s.f. ▼
Total vacancy 11.5% ▲
Average asking rent (gross) $39.38 p.s.f. ▲
Concessions Falling ▼
0
2,000,000
4,000,000
2013 2014 2015 2016 YTD
2017
Supply and demand (s.f.) Net absorption
Deliveries
While the metro area population declines, the Chicago
CBD is getting younger, smarter and more diverse
15.3%
12.8% 12.4%
10.3% 11.5%
2013 2014 2015 2016 2017
Total vacancy
$0.00
$20.00
$40.00
$60.00
2013 2014 2015 2016 2017
Average asking rents ($/s.f.) Class A
Class B
For more information, contact: Hailey Harrington| hailey.harrington@am.jll.com
• The CBD population is growing in terms of educated young
professionals, attracting companies from beyond the region.
• From impressive first quarter deals, Fulton West is now 100 percent
preleased as it nears completion.
• Tech drove leasing activity by organic growth of existing firms like
Outcome Health, and established firms expanding into downtown
Chicago, like Climate Corporation.

2. Chicago
Q1 2017
Office Statistics
Class Inventory (s.f.)
Total net
absorption
(s.f.)
YTD total net
absorption
(s.f.)
YTD total net
absorption
(% of stock)
Direct
vacancy (%)
Total
vacancy (%)
Average
direct asking
rent ($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
West Loop Totals 48,606,523 512,399 512,399 1.1% 12.8% 13.8% $43.11 3,127,164 1,257,500
Central Loop Totals 37,160,358 -294,516 -294,516 -0.8% 10.1% 11.0% $37.27 0 0
East Loop Totals 24,346,395 28,129 28,129 0.1% 11.4% 11.8% $35.61 0 0
South Loop Totals 1,163,943 7,502 7,502 0.6% 2.8% 2.8% $25.92 0 2,450,000
North Michigan Avenue Totals 11,145,481 72,257 72,257 0.6% 10.1% 10.9% $38.08 0 0
River North Totals 16,330,258 5,488 5,488 0.0% 5.2% 6.1% $40.14 0 50,000
Kennedy West Totals 5,304,298 42,971 42,971 0.8% 10.9% 11.0% $32.93 0 1,057,790
Far West Loop Totals 1,709,818 -15,534 -15,534 -0.9% 13.5% 13.7% $31.47 0 0
Fulton Market Totals 2,947,999 63,879 63,879 2.2% 9.4% 9.6% $33.89 0 1,057,790
River West Totals 646,481 -5,374 -5,374 -0.8% 10.4% 10.4% $32.54 0 0
CBD Totals 144,057,256 374,230 374,230 0.3% 10.6% 11.5% $39.38 3,127,164 4,815,290
Eastern East-West Totals 22,831,285 -24,315 -24,315 -0.1% 15.2% 17.3% $25.49 228,000 0
Western East-West Totals 14,611,686 -101,272 -101,272 -0.7% 18.1% 20.3% $24.15 0 0
North (Cook County) Totals 10,217,404 -35,652 -35,652 -0.3% 15.6% 16.0% $28.22 0 0
North (Lake County) Totals 15,931,526 -430,423 -430,423 -2.7% 25.8% 26.8% $25.71 0 0
O'Hare Totals 12,393,927 -1,578 -1,578 0.0% 16.2% 16.8% $24.98 0 0
Northwest Totals 27,167,960 -124,379 -124,379 -0.5% 21.2% 22.5% $23.45 0 368,000
Suburbs Totals 103,153,788 -717,619 -717,619 -0.7% 19.0% 20.4% $24.91 228,000 368,000
Chicago Totals 247,211,044 -343,389 -343,389 -0.1% 14.1% 15.2% $31.26 3,355,164 5,183,290
West Loop A 31,957,041 471,211 471,211 1.5% 13.1% 14.1% $46.87 3,127,164 1,257,500
Central Loop A 10,191,682 -219,395 -219,395 -2.2% 10.0% 12.2% $42.55 0 0
East Loop A 5,511,381 11,050 11,050 0.2% 5.4% 5.4% $43.42 0 0
North Michigan Avenue A 2,871,938 -15,783 -15,783 -0.5% 7.9% 8.2% $38.03 0 0
River North A 8,606,690 6,134 6,134 0.1% 4.0% 4.5% $44.84 0 50,000
Kennedy West A 1,072,473 -16,381 -16,381 -1.5% 5.7% 5.7% $34.48 0 0
Far West Loop A 35,462 -21,959 -21,959 -61.9% 61.9% 61.9% $32.00 0 0
Fulton Market A 852,011 3,359 3,359 0.4% 3.0% 3.0% $38.46 0 1,057,790
River West A 185,000 2,219 2,219 1.2% 7.4% 7.4% $33.00 0 0
CBD A 60,211,205 236,836 236,836 0.4% 10.2% 11.2% $45.14 3,127,164 2,365,290
Eastern East-West A 9,728,397 25,055 25,055 0.3% 12.2% 14.7% $28.63 228,000 0
Western East-West A 5,534,716 40,877 40,877 0.7% 16.9% 19.9% $27.16 0 0
North (Cook County) A 5,446,551 -3,810 -3,810 -0.1% 19.7% 20.1% $29.69 0 0
North (Lake County) A 11,300,485 -320,224 -320,224 -2.8% 26.9% 27.9% $25.50 0 0
O'Hare A 6,732,939 12,784 12,784 0.2% 13.3% 14.2% $29.57 0 0
Northwest A 16,499,980 86,854 86,854 0.5% 14.9% 15.6% $25.62 0 368,000
Suburbs A 55,243,068 -158,464 -158,464 -0.3% 17.4% 18.7% $26.86 228,000 368,000
Chicago A 115,454,273 78,372 78,372 0.1% 13.6% 14.8% $34.00 3,355,164 2,733,290
West Loop B 14,142,482 55,811 55,811 0.4% 13.3% 14.4% $35.91 0 0
Central Loop B 22,670,390 -42,426 -42,426 -0.2% 10.1% 10.5% $35.39 0 0
East Loop B 12,342,590 80,777 80,777 0.7% 13.0% 13.8% $34.87 0 0
North Michigan Avenue B 5,699,740 4,379 4,379 0.1% 12.7% 13.8% $40.08 0 0
River North B 5,896,409 -1,201 -1,201 0.0% 7.3% 8.2% $36.44 0 0
Kennedy West B 3,195,001 59,352 59,352 1.9% 12.1% 12.2% $32.29 0 0
Far West Loop B 1,230,612 6,425 6,425 0.5% 9.9% 9.9% $31.33 0 0
Fulton Market B 1,593,724 60,520 60,520 3.8% 15.6% 15.9% $32.88 0 0
River West B 370,665 -7,593 -7,593 -2.0% 4.6% 4.6% $20.00 0 0
CBD B 63,946,612 156,692 156,692 0.2% 11.5% 12.2% $35.66 0 0
Eastern East-West B 10,609,756 -56,539 -56,539 -0.5% 17.3% 19.3% $21.78 0 0
Western East-West B 8,024,928 -135,599 -135,599 -1.7% 19.4% 21.2% $21.71 0 0
North (Cook County) B 3,956,814 -30,393 -30,393 -0.8% 11.7% 11.8% $24.74 0 0
North (Lake County) B 4,351,794 -108,645 -108,645 -2.5% 24.5% 25.3% $26.38 0 0
O'Hare B 4,218,447 -8,186 -8,186 -0.2% 21.4% 21.8% $21.67 0 0
Northwest B 8,953,234 -156,790 -156,790 -1.8% 31.8% 33.8% $21.84 0 0
Suburbs B 40,114,973 -496,152 -496,152 -1.2% 21.6% 23.1% $22.69 0 0
Chicago B 104,061,585 -339,460 -339,460 -0.3% 15.4% 16.4% $28.63 0 0

3. Chicago | Office Statistics | Q1 2017
Class Inventory (s.f.)
Total net
absorption
(s.f.)
YTD total net
absorption
(s.f.)
YTD total net
absorption
(% of stock)
Direct
vacancy (%)
Total
vacancy (%)
Average
direct asking
rent ($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
West Loop C 2,507,000 -14,623 -14,623 -0.6% 6.2% 7.4% $32.18 0 0
Central Loop C 4,298,286 -32,695 -32,695 -0.8% 10.1% 11.0% $32.21 0 0
East Loop C 6,492,424 -63,698 -63,698 -1.0% 13.4% 13.5% $30.27 0 0
South Loop C 1,163,943 7,502 7,502 0.6% 2.8% 2.8% $25.92 0 2,450,000
North Michigan Avenue C 2,573,803 83,661 83,661 3.3% 6.8% 7.2% $32.76 0 0
River North C 1,827,159 555 555 0.0% 4.0% 6.8% $31.05 0 0
Kennedy West C 1,036,824 0 0 0.0% 12.5% 12.7% $33.53 0 0
Far West Loop C 443,744 0 0 0.0% 19.9% 20.3% $31.59 0 0
Fulton Market C 502,264 0 0 0.0% 1.0% 1.0% $35.80 0 0
River West C 90,816 0 0 0.0% 39.9% 39.9% $32.33 0 0
CBD C 19,899,439 -26,800 -26,800 -0.1% 9.4% 10.1% $31.20 0 2,450,000
Eastern East-West C 2,493,132 7,169 7,169 0.3% 18.1% 18.7% $15.96 0 0
Western East-West C 1,052,042 -6,550 -6,550 -0.6% 15.0% 15.0% $15.43 0 0
North (Cook County) C 814,039 -1,449 -1,449 -0.2% 7.2% 9.4% $18.50 0 0
North (Lake County) C 279,247 -1,554 -1,554 -0.6% 2.7% 2.7% N/A 0 0
O'Hare C 1,442,541 -6,176 -6,176 -0.4% 14.4% 14.4% $15.28 0 0
Northwest C 1,714,746 -54,443 -54,443 -3.2% 26.2% 29.6% $17.83 0 0
Suburbs C 7,795,747 -63,003 -63,003 -0.8% 17.1% 18.3% $16.81 0 0
Chicago C 27,695,186 -89,803 -89,803 -0.3% 11.6% 12.4% $25.20 0 2,450,000
Hailey Harrington | Research Manager
200 E Randolph Street Chicago, IL 60601 | tel +1 312 228 3189 | hailey.harrington@am.jll.com
2017 Jones Lang LaSalle IP, Inc. All rights reserved.