Chicago Office Vacancies Climb to 28.2%

Office vacancy rates in Chicago have climbed to 28.2 percent, exceeding pre-pandemic levels and marking the 14th straight quarter of rising vacancies, according to The Center Square. Over the past year, businesses have vacated approximately 370,000 square feet of office space.

Mark Glennon, executive editor at Wirepoints, sharply criticized city and state leadership over what he described as an unfriendly climate for employers. “You never see any effort to make life easier for employers here. The state of Illinois is like one big oppressive intermeddling HR department with countless rules and regulations that strangle people,” Glennon told Center Square.

He also warned that weakening demand for office space could have ripple effects on the city’s finances and homeowners. “The valuations of those big buildings go down because they’re not getting as much rent, and those lower valuations mean lower property taxes that they pay that have to get passed off somewhere, and that goes largely to homeowners,” he noted.

Glennon cautioned that the current trajectory could accelerate broader economic decline if policies remain unchanged. “All those things, of course, snowball,” Glennon explained. “They drive more people away, other things will continue to deteriorate, and businesses will get more fed up, and more people will leave. It’s more of the same and a spiral downward.”

Separate reporting from J.D. Busch of Chicago Contrarian highlighted a series of major corporations that have relocated their headquarters out of Chicago or Illinois in recent years. Among the companies cited were Beam Suntory, Boeing, Caterpillar, Citadel, Guggenheim Partners, PEAK6 Investments, Schumacher Electric Corp., SC Johnson, TTX Company, Tyson Foods, United Airlines, and Walgreens Boots Alliance.

Data from the Illinois Policy Institute indicates that between 2015 and 2024, Chicago lost roughly 17 percent of its businesses, with the total declining from approximately 54,135 in 2015 to about 44,840 in 2024. The city’s Magnificent Mile corridor saw a notable contraction as well, falling from around 1,600 registered businesses to 784 in 2024.

Chicago’s broader business climate continues to face scrutiny over costs. Illinois has the second-highest state corporate income tax rate in the nation, while commercial property taxes rank as the highest in the country.

Concerns about the policy environment have also been voiced by Democratic Illinois Comptroller Susana Mendoza, who has questioned whether current approaches may be contributing to companies leaving the city.

Meanwhile, Mayor Brandon Johnson has advanced revenue proposals that include a head tax of $21 per employee, along with taxes targeting Chicago-based social media users and cloud computing services. Although these measures have not yet been approved by the City Council, they remain under discussion as part of the city’s broader revenue strategy.

Critics argue that additional taxes could further discourage investment and business expansion at a time when Chicago is still navigating its economic recovery.