Chicago:
New Office Demand Up 73% MoM
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APRIL 2023
In May, the Chicago office market rebounded from April with new activity resembling January activity that kicked off the year. 92 new unique tenants entered the market totaling 1.1M sf, a 73% increase MoM. The size of these new requirements also increased 36% compared to last month, with an average tenant size of 12.3K sf, also the highest since January.
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Chicago: New Office Demand Up 73% MoM
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METHODOLOGY
Explore the key drivers below
January Déjà Vu
Over the last three months, Association/Nonprofit demand increased by 38% vs. the prior three months by count. The sector was up 192% YoY and 466% vs. the prior three months when measured by sf. The average tenant size is larger than any other industry group at 22.9K sf, 8.7K sf larger than the average Creative tenant, the 2nd largest industry group.
New Large Tenant Demand Coming from Atypical Industries
There was a 42% increase in lease proposals being exchanged over the last three months vs. the previous three-month period, and the 242 total proposals were the most recorded over the past four years. Current active proposals are commanding 9% higher NERs, 3% higher starting rents, and decreased concessions compared to the 22 deals executed so far in 2023.
Paper Trading at an All-Time High
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A look at the latest trends impacting office demand
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REPORT | APRIL 2023
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METHODOLOGY
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METHODOLOGY
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VTS is the leading provider of leasing, marketing, asset management, and tenant experience software for commercial real estate landlords, with market share averaging over 80% in core U.S. office markets. The VTS platform captures, aggregates, and anonymizes supply and demand data across all office asset classes and age segments. Due to VTS’ market share and the multiple spaces considered by tenants in a given search, VTS sees 99% of all newly created tenant requirements within the markets it serves. With this unprecedented view, VTS has developed an index, the VTS Office Demand Index, published monthly, to provide landlords, brokers, tenants, and the business community with visibility into a previously opaque segment of the market: real-time tenant demand in the US office leasing market.
The VTS Office Demand Index (VODI) is the earliest look into the health of the office market. The VODI, as an index capturing actual market actions of potential tenants - promises to be a source of greater certainty and the first to actually capture the demand for office space as it evolves during this critical period.
The VODI reflects the total square footage of unique tenant requirements surfaced by touring activity in a given month relative to the total square footage observed in VTS’ expansive network of leasing, marketing, and asset management software. Accounting for the total square footage observed helps distinguish changes in the demand for office space from the growth of VTS’ reach, as well as from changes in the supply of office space, e.g. due to fluctuation in vacancy rates or new construction.
To enhance its interpretation and its comparability across regions, VODI is reported as an indexed value using the 2018-2019 average level as a baseline valued at 100. The index is not seasonally adjusted, but it is smoothed using a 3-month trailing average.
To ensure the viability of VTS data for market insight, VTS suppresses monthly VODI data points informed by less than four customers, as well as all data aggregated prior to January 2018.
The markets referred to in this report correspond to the named cities, not metropolitan areas.
The VODI report includes analysis and commentary from MetroSight.
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VTS Office Demand Index (VODI)
LAUREN RIEFFLIN
Kingston Marketing Group
lauren@kingstonmarketing.group
ERIC JOHNSON
VTS
eric.johnson@vts.com
Media Contacts
APRIL 2023
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Changes to the VODI Report
VTS will be shifting the cadence of the VODI report from monthly to quarterly and retiring its standalone Greenshoots Report. This means the March 2023 VODI report, scheduled to publish on Wednesday, April 26, will be the final monthly report. The new quarterly VODI report will be published in July, capturing data and findings from VTS over a three-month (quarterly) period moving forward. The new VODI report will include select data points from the former VTS Greenshoots report, providing all your need-to-know trends and takeaways for the office market in one comprehensive report.
For questions, data inquiries or to connect with a VTS spokesperson, contact eric.johnson@vts.com.
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aAPRIL 2023
VTS Office Demand Index (VODI)
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LAUREN RIEFFLIN
Kingston Marketing Group
lauren@kingstonmarketing.group
ERIC JOHNSON
VTS
eric.johnson@vts.com
Media Contacts
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