Chicago Commercial Office Space for Rent

Q3 2026

Q3 2026 Chicago Commercial Real Estate Market Report

Focus: Q3 2026 Market Trends

Executive Summary

Chicago's commercial real estate market is sharply divided. Industrial leasing is surging with vacancy at just 4.7%, while downtown and suburban office continue to work through elevated vacancy, even as trophy space tightens. Retail vacancy sits near historic lows at 5.3%. Tenant demand on TenantBase moved sharply toward office in Q3: office space accounted for 43.7% of all Chicago tenant searches, more than five times its 8.3% share in Q2.

Sector Snapshot

  • Office: Bifurcated. Downtown vacancy was 27.2% in Q3, but trophy vacancy fell to 12.1% and Fulton Market posted strong gains.
  • Industrial: Strong. Vacancy held at 4.7% with leasing up 33.8% year to date.
  • Retail: Tight. Vacancy was 5.3% at midyear, near its all-time low.
  • Multifamily: Rents rising. Core downtown rents rose about 5.5% over the past year.

Chicago Tenant Demand Index

The TenantBase Tenant Demand Index tracks what businesses across the Chicago metro are actively searching for on the TenantBase platform each quarter. Because it measures tenant intent before leases are signed, it shows where demand is heading ahead of traditional vacancy and absorption data.

Q3 2026 Search Share by Space Type (July 1 to September 30, 2026)

  • Retail/Storefront: 51.3%
  • Office: 43.7%
  • Warehouse/Industrial: 5.0%

Three-Quarter Trend

  • Retail/Storefront: 61.3% in Q1, 66.4% in Q2, 51.3% in Q3
  • Office: 9.0% in Q1, 8.3% in Q2, 43.7% in Q3
  • Warehouse/Industrial: 29.7% in Q1, 26.0% in Q2, 5.0% in Q3

Key Takeaways

  • Office demand rose more than fivefold, from 8.3% to 43.7% of Chicago searches, after holding under 10% in Q1 and Q2.
  • Office space needs scale with commitment. Tenants seeking 5+ year office terms averaged 4,500 to 9,167 SF, about three times the 1,435 to 2,985 SF sought for terms under one year.
  • Suburban demand leads. The South, Western, Northwest, and North suburbs were the most requested areas, ahead of the Loop and West Loop.
  • Retail tenants need small storefronts. Most retail searches sought 500 to 2,750 SF.

Office Market

Downtown Key Metrics (Q3 2026)

  • Vacancy: 27.2%, with trophy vacancy at 12.1%, down 420 basis points year over year (Cushman & Wakefield)
  • Net absorption: negative 397,000 SF in Q3, with trophy buildings absorbing 610,000 SF year to date (Cushman & Wakefield)
  • Average asking rent: $46.15/SF gross, with trophy space at $73.05/SF (Cushman & Wakefield)
  • Strongest submarket: Fulton Market, with +367,450 SF of year-to-date absorption (Cushman & Wakefield)
  • Largest lease: Morningstar, 275,000 SF at the Thompson Center (Cushman & Wakefield)

Suburban Key Metrics (Q3 2026)

  • Vacancy: 24.1%, up 180 basis points year over year (Cushman & Wakefield)
  • Average asking rent: $26.92/SF gross (Cushman & Wakefield)
  • Average new lease size: 5,616 SF, down 12.8% year over year (Cushman & Wakefield)
  • Inner suburbs: 21.5% vacancy, with Near North lowest at 17.7% (Cushman & Wakefield)

TenantBase Office Activity

Demand share: 43.7% of Chicago tenant searches, up from 8.3% in Q2 and 9.0% in Q1.

Lease term preferences:

  • Less than one year: 46.3%
  • 3 to 5 years: 24.1%
  • 2 to 3 years: 18.5%
  • 5+ years: 7.4%
  • 1 to 2 years: 3.7%

Space requirements by term:

  • Less than one year: 1,435 to 2,985 SF
  • 1 to 2 years: 1,500 to 3,250 SF
  • 2 to 3 years: 1,750 to 3,667 SF
  • 3 to 5 years: 2,222 to 4,556 SF
  • 5+ years: 4,500 to 9,167 SF

Top locations: The South suburbs were the most requested area across all space types in Q3, followed by the Western, Northwest, and North suburbs and the West Loop. Many tenants also searched across the Central Loop, East Loop, Fulton Market, and North Michigan Avenue.

TenantBase data vs. the market: Chicago office demand on TenantBase is suburban and small, with most searches under 5,000 SF. That matches the suburban market, where the average new lease is 5,616 SF and vacancy is 24.1%, giving small tenants strong leverage on rent and concessions. Downtown tenants willing to look beyond trophy buildings will find the most room to negotiate, since trophy rents are up 24.3% year over year while Class B averages $41.56/SF.

Industrial & Warehouse Market

Key Metrics (Q3 2026)

  • Vacancy: 4.7%, flat for the fourth straight quarter (Cushman & Wakefield)
  • Year-to-date net absorption: 7.5 million SF, up 43.0% year over year (Cushman & Wakefield)
  • Average asking rent: $7.53/SF, up 3.9% year over year (Cushman & Wakefield)
  • Year-to-date leasing: 40.0 million SF, up 33.8%, including 16 leases of 500,000 SF or more (Cushman & Wakefield)
  • Under construction: 14.8 million SF (Cushman & Wakefield)

TenantBase Industrial Activity

Demand share: 5.0% of Chicago tenant searches, down from 26.0% in Q2 and 29.7% in Q1. Industrial tenants seeking 1 to 2 year terms averaged 13,000 to 28,750 SF.

TenantBase data vs. the market: With vacancy at 4.7% and large users absorbing space quickly, industrial tenants should start their search early, particularly in submarkets like the I-80 Corridor where rents rose sharply.

Retail Market

Key Metrics (Midyear 2026)

  • Vacancy: 5.3%, about 50 basis points above its all-time low (Marcus & Millichap)
  • Supply: inventory grew only about 1% over the past five years (Marcus & Millichap)
  • Demand outlook: demand for spaces under 10,000 SF may offset some big-box move-outs (Marcus & Millichap)

TenantBase Retail Activity

Demand share: 51.3% of Chicago tenant searches, the largest category for the third straight quarter.

Lease term preferences:

  • Less than one year: 37.3%
  • 2 to 3 years: 27.1%
  • 3 to 5 years: 18.6%
  • 5+ years: 15.3%
  • 1 to 2 years: 1.7%

Space requirements by term:

  • Under three years: 500 to 1,000 SF
  • 3 to 5 years: 1,000 to 2,500 SF
  • 5+ years: 1,250 to 2,750 SF

TenantBase data vs. the market: Chicago retail demand on TenantBase is almost entirely small-format space under 3,000 SF, the same segment Marcus & Millichap expects to help offset big-box vacancies. With vacancy near historic lows, small storefronts in strong neighborhoods lease quickly.

Multifamily Market

Chicago apartment rents in the West Loop, South Loop, River North, and Fulton Market rose about 5.5% over the past year, averaging more than $3,000 per month, according to Northmarq. Lincoln Park has the lowest vacancy at 3.1%, and a shrinking development pipeline could push metro vacancy below 5.0% in 2027.

Q4 2026 Outlook

  • Office: Expect continued divergence, with trophy space tightening and suburban small-suite demand from TenantBase searches supporting leasing.
  • Industrial: Expect tight conditions and strong big-box leasing to continue.
  • Retail: Expect vacancy near historic lows, supported by small-format demand.
  • Multifamily: Expect continued rent growth as the pipeline shrinks.

Frequently Asked Questions

What type of commercial space are Chicago tenants searching for in 2026?

In Q3 2026, retail/storefront space made up 51.3% of Chicago tenant searches on TenantBase, followed by office at 43.7% and warehouse/industrial at 5.0%. Office share rose from 8.3% in Q2.

Which Chicago areas are tenants searching most?

The South suburbs were the most requested area on TenantBase in Q3 2026, followed by the Western, Northwest, and North suburbs and the West Loop.

What lease terms do Chicago office tenants want?

46.3% of Chicago office tenants on TenantBase sought terms under one year in Q3 2026, while 31.5% sought terms of 3 years or longer.

What is the office vacancy rate in Chicago?

Downtown Chicago office vacancy was 27.2% in Q3 2026, with trophy vacancy at 12.1%, and suburban vacancy was 24.1%, according to Cushman & Wakefield.

What is the industrial vacancy rate in Chicago?

Chicago industrial vacancy was 4.7% in Q3 2026, flat for the fourth straight quarter, according to Cushman & Wakefield.

How can I find commercial space in Chicago at no cost?

TenantBase matches business tenants with vetted independent tenant rep brokers across the Chicago metro at no cost to the tenant. Brokers are compensated by the landlord. Get started with TenantBase.

Sources

  1. TenantBase proprietary search data, Chicago, July 1 to September 30, 2026
  2. TenantBase, Chicago Commercial Real Estate Market Report, Q2 2026
  3. TenantBase, Chicago Commercial Real Estate Market Report, Q1 2026
  4. Cushman & Wakefield, Chicago Downtown Office MarketBeat, Q3 2026
  5. Cushman & Wakefield, Chicago Suburban Office MarketBeat, Q3 2026
  6. Cushman & Wakefield, Chicago Industrial MarketBeat, Q3 2026
  7. Marcus & Millichap, Chicago Retail Market Report, 3Q 2026
  8. Northmarq, Chicago Multifamily Rents on the Rise (August 21, 2026)

Disclaimer

Information in this report is aggregated from third-party sources and TenantBase proprietary platform data, and was synthesized with the assistance of AI. TenantBase search data reflects tenant activity on the TenantBase platform and is not a measure of total market leasing. All figures should be independently verified before making real estate decisions.