Vacancies climb across Chicago while delivery and construction volumes slowed further

Vacancy continued to trend upward in the third quarter, rising 10 basis points (bps) from the second quarter of 2025 and reaching its highest level in more than five years. While the increase was modest, it reflected a market still marked by caution, elongated deal cycles and a growing pool of second-generation space. Net absorption trailed last year’s pace, and both new deliveries and construction starts declined notably. Developers, facing tighter capital and slower lease-up velocity, remained selective with groundbreakings. Overall, the market showed signs of shifting toward a more normalized demand-driven cycle after several years of accelerated expansion.

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