Chicago's Office Occupancy Costs Spiked 10% In 2016
The City of Broad Shoulders placed fourth in the U.S. last year for the fastest-growing prime office occupancy costs, according to CBRE's Global Prime Office Occupancy report.
For the 12-month period ending in Q1 2017, prime occupancy costs — which reflect prime net rents, plus local taxes and service charges — rose 10.2% in Chicago, trailing suburban Denver, suburban Houston and Manhattan Midtown South for the largest increase in the country. That spike in occupancy costs is the 11th-largest globally and was enough for Chicago to crack the top 50 most expensive global office markets at 48th.
Demand for downtown office space is the main driver. Rents in downtown Chicago's prime office properties rose 20% from 2015 to 2016. The central business district has benefited greatly from suburban to downtown corporate migration, as Ivanhoé Cambridge Senior Vice President Jonathan Pearce said during Bisnow's Midwest office event last week. And it is a trend that CBRE Senior Vice President Sara Spicklemire said shows no signs of reversing.
The two most expensive global office markets are Hong Kong and London's West End.
