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Tenant options increase at start of 2020; COVID-19 likely to significantly alter market fundamentals
By mid-March, the rapidly evolving COVID-19 spread brought business in Chicago to a halt, closing storefronts and emptying office buildings as stay-at-home orders were implemented to slow coronavirus spread. No one knows what the market impact will be on the other side of this event, and severity will depend on how long businesses are shut before activity can resume. Prior to recent events, overall availability in Downtown Chicago increased to 16.0% in the first quarter – rising 50 basis points over the quarter, and 20 basis points annually. Overall rents were flat at $41.28 when compared quarterly. In the face of economic uncertainty, availability in the near term is likely to increase. There is strong potential for rental rate repricing throughout the market as occupiers dramatically economize and the market evaluates the aftermath of current events.