Chicago Office Prices Lowest Among Gateway Markets

Due to several challenges in the office sector, including reduced demand and high interest rates, office sales nationwide have been driven by institutions selling high-quality assets. This strategy helped them balance their portfolios, reduce their office exposure and mitigate risk on their balance sheets.

Despite the market’s tame metrics, year-to-date through April, Chicago logged $223 million in office sales at an average price of $81 per square foot, according to CommercialEdge data.

A halt in new construction starts

In April, Chicago had 1.0 million square feet of office space underway, which represented 0.3 percent of existing stock. Meanwhile, the national figure stood at 1.5 percent. Among peer markets, Chicago was on par with Washington, D.C. (0.9 percent), while other metros such as Seattle (3.6 percent) recorded above-average figures...