Chicago’s Rising Amount of Sublease Space Due to COVID
As with other major markets, Chicago has seen a marked uptick in available sublease space during the pandemic, although perhaps not quite at the level of places like New York and Washington.
The amount of available sublease space rose 958,842 square feet, or 35 percent, from the beginning of 2020 to June 30 in Chicago’s central business district, according to CBRE.
Breaking this down further, Cushman & Wakefield put available sublease space in the CBD at 3.5 million square feet by the end of the second quarter, a 30.4 percent quarterly increase and a 78 percent increase year over year. That also means sublease space accounted for 15.2 percent of the total amount of available office space in Chicago’s central business district by the end of the second quarter. Meanwhile, the suburban office market saw total sublease space reach 1.7 million square feet, up 5.2 percent quarter over quarter. This followed seven straight quarters of declining numbers.
This rise in available sublease space isn’t due just to COVID, but the pandemic has certainly accelerated the trend in a relatively short period of time.
“Our sublease activity has been increasing downtown for the last several quarters, since mid-2019, due to a lot of the new developments happening and people upgrading their space to those newer buildings,” said Linsey Smith, director of Chicago research for C&W. “But we’ve definitely seen a major uptick. We’ve added almost 1 million square feet of sublease space across the suburban and downtown markets since the first quarter, and we expect that to continue to accelerate.”