Downtown Chicago leasing demand remains largely dormant, market fundamentals weaken

As the state economy gradually reopened in phase four of Illinois’ “Restore Illinois” plan, and as further widespread outbreaks of COVID-19 were avoided, a trickle of Downtown Chicago employees returned to the office during the third quarter. Nevertheless, most occupiers continued to postpone decisions concerning their long-term real estate requirements. As a result, short-term extensions accounted for many of the top deals this quarter. While the downtown market observed a modest 3.2% increase in leasing over last quarter, deal activity remained below one million square feet (msf). Leasing volumes sagged 73.3% compared to a year ago.

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