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Office Vacancy Sets Two-Year Low

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An aerial view of downtown Chicago
A view of downtown Chicago from Willis Tower

Leasing agents have reason to celebrate as we head into the Christmas break. That's because direct vacancy in the CBD dropped below 10% for the first time in two years.

That's according to the MB Real Estate Index, which monitors vacancies and leasing activity in the CBD's 30 newest Class-A buildings. Overall vacancy continued its slow decline and now stands at 13.2% in Q4.

Leasing activity in the MBRE buildings tightened as available space shrunk. The most notable announcement of the quarter was that Amazon was inĀ advanced negotiations to lease 30k SF at The Franklin, 227 W Monroe. The deal would be a significant win for The Franklin's owners, after losing anchor tenants McDermott Will & Emery and William Blair to the under-construction River Point and 150 N Riverside, respectively. The Franklin has undergone an extensive $30M renovation.

River Point and 150 N Riverside, which will become part of the index in 2017, saw the most leasing activity in October and November. The buildings in the index with over 200k SF of available space are 515 N State (347k SF), 500 W Monroe (270k SF) and 311 S Dearborn (231k SF).