Chicago, IL Retail Market Report Q3 2026
Tenants Give Back 45K SF in Q3 While New Supply Falls 26%
Demand
Chicago posted net absorption of -45K SF in Q3 2026, against -318K SF in the same quarter last year. Vacancy is 5.0%, 8 bps looser than Q3 2025. Northwest Chicago is the tightest submarket at 3.7% vacancy; DuPage/Western Suburbs leads rent growth at +3.4%. Trailing-12-month absorption of -518K SF compares with -2.52M SF a year earlier. Asking rent of $22.79/SF is up 2.6% year over year and a record. Vacancy sits 127 bps below the Q2 2021 peak of 6.3%.
Supply
Chicago delivered 121K SF in Q3 and 955K SF over the trailing twelve months (-26% versus the prior TTM period). Space under construction equals 0.3% of inventory, concentrated in West Loop/Fulton Market at 2.5% of its stock. Annual deliveries peaked at 13.09M SF in 2007. Q3 deliveries were less than half of last year’s 334K SF.
Investment Market
Chicago recorded $3.7B in sales over the trailing twelve months, +21% against the prior TTM period; Q3 accounted for $952M. The high-water mark in this series is $4.6B in 2022.
Chicago cap rates average 7.82%, up for 21 straight quarters. Pricing sits at $229/SF, higher for 2 consecutive years. The cap rate is 89 bps above the Q4 2015 low of 6.93%. Price per SF is at a record.
Volume
- $3.7B TTM volume (+21% YoY)
- Q3 2026: $952M
- Series peak $4.6B (2022)
Pricing
- Cap rate 7.82%
- Price per SF $229
- Caps expanding 21 quarters running
