Mid-Year 2026 Suburban Market Report

The first half of the year in the suburban office market: 

• With more than half a million square feet of net positive absorption year-to-date, direct vacancy improved slightly to 25.5% from 26.1% at year-end. This net positive absorption in H1/26 is the highest first-half absorption since 2018, a further sign of improvement in the Chicago suburbs. Total vacancy improved slightly to 26.1% from 26.3% at the end of 2024, suggesting the market may be nearing an inflection point. 

• Move-in-ready suites accounted for more than half of all leasing activity in H1/26, with more than 1 million square feet leased. This segment has grown dramatically over the past decade, increasing from just 8% of leasing activity in 2016 to a majority in 2026. 

• Total investment volume remained relatively steady, with $112 million traded during the first half of the year, roughly half of last year’s full-year total. However, property values remain well below historical levels. Medical office sales led investment activity year-to-date as healthcare providers continued seeking greater control over their real estate. 

• There are additional signs the suburban market is stabilizing, including positive absorption, declining vacancy, larger average new lease sizes, and rental rates that have remained stable between $24 and $26 per square foot since peaking at the end of 2024. 

• Tenants continue to value the operational advantages and cost efficiencies of well-located suburban assets, driving leasing activity in high-quality buildings and move-in-ready suites. 

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