Bradford Allen, a national full-service real estate firm, today released its Year-End 2025 Office Market Report: Suburban Chicago and Q4/25 Office Market Report: Downtown Chicago research reports. Among the firm’s findings, Chicago’s CBD office market posted positive direct net absorption for the first time following nine consecutive quarters of decline. Meanwhile, 2025 suburban net absorption improved notably from 2024’s losses, though investment sales volume was approximately half of the previous year’s total.

Chicago’s CBD office market posted positive direct net absorption of approximately 163,433 square feet in fourth-quarter 2025. The direct vacancy rate ended the year at 24.3%, with gross asking rents averaging $41 per square foot. Direct availability held near 26%, while sublet availability hovered around 3%. Tenants remained active but selective, gravitating toward modern, efficient spaces that support hybrid work and wellness expectations. Demand was strongest for offerings with move‑in-ready space, first‑class amenities, robust digital infrastructure and proximity to transit.

“Although Chicago’s office market is still working through a reset, emerging bright spots point toward recovery, not least of which is a return to positive absorption in every CBD submarket,” said Neil Bouhan, senior managing director, research and communications, at Bradford Allen. “While suburban leasing decelerated in the back half of 2025, stable vacancy over three consecutive quarters signals that conditions are slowly but steadily recovering.”

Office‑to‑residential conversions remain a central response to persistent vacancy. Major redevelopments at 105 W. Adams St., 115 S. LaSalle St. and 135 S. LaSalle St. underscore how the repositioning of aging Class B and C office towers into mixed-use environments presents both a challenge and an opportunity, balancing the complexity of capital-intensive redevelopments with the ability to introduce much-needed residential density.

On the investment front, lower valuations attracted well‑capitalized buyers to downtown assets at favorable bases. These investors are better positioned to reinvest in and lease up properties, reinforcing demand for high‑quality, well‑located buildings even as broader market fundamentals adjust.

Downtown Chicago

Building material manufacturer USG Corporation inked the CBD’s biggest deal of the year with a 165,000-square-foot renewal for less space at 550 W. Adams St., while the largest new lease was for aviation firm AAR Corp.’s 90,000 square feet at The Mart. Other highlights include:

• Investment pricing varied by asset across multiple submarkets, including the $51.5 million sale of Northern Trust Center in the West Loop ($91/SF); the $35 million sale of One Congress Center, also in the West Loop ($67/SF); and the $40 million sale of 400 S. LaSalle St. in the Central Loop ($114/SF), with plans for a data center conversion.
• Fulton Market’s direct vacancy rate remained the lowest in the CBD at 15.5% last quarter, significantly outperforming the CBD average of 24.3%.
• The new $45 million financing secured at 230 W. Monroe St. — equal to the building’s 2023 all-cash purchase price — underscores how leasing execution and a low basis can reset lender confidence in underutilized Loop office assets.

Suburban Chicago

One notable suburban lease was Verizon Communications’ 128,894-square-foot renewal at 1701 Golf Road in Rolling Meadows. With just 1.9 million square feet leased during the past six months, suburban office leasing activity was slower than the first half of 2025, as well as the second half of 2024. Market-wide vacancy hit a record 26% by year’s end, though the rate has held close to 25% for three quarters, indicating signs of stabilization. Other highlights included:

• The East/West Corridor was the only submarket to record positive net absorption, at 64,085 square feet in the second half of 2025, with larger deals including Commscope Technologies’ 71,071-square-foot renewal at 2400 Ogden Ave. in Lisle and Sedgwick Claims Management’s new 35,656-square-foot lease at 3500 Lacey Road in Downers Grove.
• Smaller tenants continue to drive activity even as average lease sizes shrink. The average new lease in the second half measured 16,000 square feet compared with 50,000 square feet for renewals.
• The $188 million in suburban investment sales volume last year was roughly half of 2024’s total, with average pricing down to $49 per square foot, an even deeper discount from $54 per square foot seen in the first half of 2025.
• Investors targeted discounted assets with value‑add or conversion potential. Notable transactions included the five-building Bannockburn Lakes Complex, purchased for $17 million (about 40% lower than its prior sale price in 2015).

A full copy of the reports can be downloaded here:

Year-End 2025 Office Market Report: Suburban Chicago

Q4/25 Office Market Report: Downtown Chicago

About Bradford Allen:

Bradford Allen (BA) is a commercial real estate firm based in the heart of downtown Chicago. Founded in 2003 by Jeff Bernstein and Larry Elbaum as an office brokerage, the firm has grown into a vertically integrated commercial real estate company, offering a full array of services and expertise across multiple U.S. markets to entrepreneurial, corporate and not-for-profit clients, including strategy, marketing and transaction execution for occupiers, investors and owners. For more information, visit bradfordallen.com.