The conventional wisdom after COVID was that the office was over. That turned out to be wrong. What actually happened is more interesting: the office market stratified sharply, and the businesses that understand this stratification are securing better deals than they've seen in years.
The flight to quality
One of the clearest trends in the post-pandemic office market is what brokers call the "flight to quality." When companies realized employees needed a genuine reason to come in — collaboration, culture, specific equipment — they started investing in better space rather than more space.
Class A and Class A+ office properties — buildings with modern HVAC, high-quality common areas, good natural light, and amenities like fitness centers and conference facilities — have held up well in most markets, including the Chicago suburbs. Class B and Class C properties, particularly in second-tier locations, have seen elevated vacancy and significant landlord concessions.
Right-sizing for hybrid work
Many companies that previously had 100% of employees in the office every day now have 60–80% of employees working a hybrid schedule. This has driven a real reduction in the square footage per employee most businesses need.
But the calculation is not as simple as "40% fewer employees means 40% less space." Hybrid work often requires more collaboration and conference space relative to individual desks — the time people do come in tends to be for meetings and joint work, not solo focused work. The best hybrid office designs have fewer assigned workstations and more meeting and social space.
Suburban office has real advantages
For businesses in the western and northern suburbs, the suburban office market has several genuine advantages over downtown Chicago for many tenant profiles:
- Employees who live in the suburbs are more likely to commute to a suburban office than to downtown
- Parking is generally plentiful and free, which matters for clients and employees alike
- Rents are substantially lower per square foot than comparable downtown space
- Modern suburban Class A product competes favorably on amenities with older downtown product
What tenants are negotiating right now
Office market conditions have given tenants significant leverage. What's on the table in current negotiations:
- Shorter initial lease terms (3–5 years instead of 5–7+)
- Larger tenant improvement allowances as landlords compete for quality tenants
- Free rent periods of 3–6 months at lease commencement
- Termination options after year 3 or 4, with reasonable fees
- Flexible expansion and contraction rights
If your office lease is expiring in the next 12–24 months, now is an excellent time to evaluate your options. The concession packages available today may not be available when the market tightens.
