Renewal deals dwarf discretionary leasing as occupiers stay put in muted Suburban market

The trajectory of the Suburban Chicago office market tracked steadily at the start of 2024 as demand remained weakened while availability inched slightly higher. Many landlords remained out of position to execute deals due to inadequate capital. Several additional properties were surrendered to their lenders this period, including Oak Brook 22 in Oak Brook and Park Plaza in Naperville. From a leasing perspective the market exhibited positive signaling by the 1.6 million square feet (msf) transacted this quarter, its best quarterly performance in nearly two years. However, seven of the 10 largest deals this period were renewals as discretionary deals lagged and leasing remained chiefly expiration-driven. Overall availability across Suburban Chicago stood at 31.4%, increasing 50 basis points (bps) over the last year.

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