Apr 24, 2024 - News

Chicago's Fulton Market becoming office destination

street scene

The Fulton Market District sign at Fulton and Halsted in 2023. Photo: Taylor Glascock/Bloomberg via Getty Images

Chicago's most expensive commercial street is in Fulton Market, per a new report, as more companies abandon downtown.

Why it matters: It's yet another sign of the Loop's ailing office market — an issue that is causing office tenants to downsize and forcing the city to get creative.

State of play: The stretch of Green Street in Fulton Market is the most expensive in Chicago, followed by two nearby streets, Carpenter and Fulton Avenue, according to commercial real estate analysts JLL's study.

The intrigue: Just 10 years ago, the most expensive office spots were on downtown streets like Wacker, Dearborn and Clark in River North. Even five years ago, it was just south of Fulton Market in the West Loop.

The big picture: Fulton Market's takeover of the top spot follows a national trend of offices migrating from central business districts post-COVID and into "off-core peripheral urban neighborhoods," per the report.

  • 54% of the country's most expensive streets were in such peripheral areas last year, as opposed to only 39% in 2005.

By the numbers: Fulton Market's average asking rent in 2023 was $65.37 per square foot, with its highest at $82 per square foot.

  • Green Street (between Randolph and Kinzie) had a 6.1% vacancy rate at the end of 2023, while Fulton Market's rate was closer to 16.2%.
  • The Loop's overall office vacancy rate was close to 30%.

Context: Green Street and Fulton Market have exploded over the last decade, replacing old warehouse and meatpacking spaces with high-rise buildings, restaurants, bars and entertainment venues.

The latest: Legal firm Norton Rose Fulbright just added thousands of square feet to its existing space at 1045 W. Fulton, while Greenberg Traurig LLP Chicago recently announced plans to move to 360 N. Green St.

building against purple sky
Rendering of the 919 W. Fulton Ave. building. Rendering courtesy of Fitzgerald Associates

What they're saying: "More than half of pre-pandemic office leases in the U.S. have yet to expire," Neil Bouhan, of real estate firm Bradford Allen, said in a recent press release.

  • "So as companies face the decision to renew, right-size or relocate, productivity concerns may mean employers place a greater emphasis on returning to the office in 2024 and beyond."

The bottom line: As Chicago businesses and office-building tenants continue to recover from the pandemic, they are shifting away from the Loop and creating office corridors in other areas of the city.

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