The flight-to-quality movement is in full effect in downtown Chicago, as the concentration of older office assets has led to heightened pre-leasing on speculative builds, Marcus & Millichap reported. The company’s second-quarter Chicago office report said, “Firms that are expanding their physical footprints have shifted preferences in favor of newer, amenitized spaces in an effort to entice workers back to in-person operations.”
Spurred by this change, several office properties have undergone renovations to become more appealing, with the $500-million upgrade to Willis Tower a highlight of this trend. “Additionally, the final touches are being made to Salesforce Tower — a sustainable development with several certifications that is over 96% pre-leased, exemplifying the flight-to-quality atmosphere currently playing out in the core,” according to the report.
Outside the Loop, submarkets where household counts are high or rising are also recording the strongest net absorption figures in nearby office properties, the report said.