Suburban Chicago Office Vacancy Hits New High in 2025

The suburban Chicago office market closed 2025 in a deeper hole than ever, as vacancy climbed to a fresh record and reinforced fears that the post-pandemic hangover for landlords — and local tax bases — is far from over.

Office vacancy across the suburbs ended the year at 32.9 percent, up from 32.4 percent in the third quarter and 32 percent at the end of 2024, according to new data from JLL first reported by Crain’s. Vacancies set an all-time high every quarter for five straight years, a stunning reversal from early 2020, when vacancy stood at 22.1 percent.

The numbers highlight a widening mismatch between supply and demand in a market built around sprawling corporate campuses that no longer align with how companies use space. Remote and hybrid work have permanently shrunk tenant demand, while much of the suburban inventory consists of aging buildings that companies see as functionally obsolete.

Landlords and lenders are taking hits as values fall, while municipalities that once relied on office parks as dependable revenue engines are facing growing uncertainty, according to the outlet.

“There is a lot of suburban office space that doesn’t need to be office space in the future, and it’s not going to get absorbed,” JLL Vice Chairman Dan McCarthy said. For vacancy to meaningfully retreat, he said, demand must improve and supply must shrink — neither of which moved much at the end of last year.

Tenants gave back roughly 371,000 more square feet than they occupied during the fourth quarter, pushing total negative net absorption for 2025 past 720,000 square feet, according to JLL. Verizon trimmed its space in Rolling Meadows by about 20 percent as part of a lease extension, while Aldi exercised an option to terminate a 113,000-square-foot office lease in Naperville.

Since the start of 2020, suburban tenants have shed about 5.3 million square feet. By comparison, the suburbs lost roughly 3.2 million square feet during the Great Financial Crisis from 2008 to 2013, according to the report.

Leasing volume also appears to have reset lower. Companies signed about 4 million square feet of suburban leases in 2025, down 14 percent from the prior year and well below the roughly 7 million square feet inked at the market’s 2018 peak.

Stabilization now hinges on how quickly obsolete offices are removed. Nearly 6 million square feet have been taken offline over the past five years, pushing total suburban inventory below 95 million square feet for the first time since 2007. Another 2.2 million square feet is slated for demolition or redevelopment, including office-to-industrial and sports-related conversions.

Even so, distress is mounting. In October, the owner of the 1.1 million-square-foot Westbrook Corporate Center in Westchester was hit with a foreclosure lawsuit tied to a $99 million mortgage.

— Eric Weilbacher