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RENT DROPS AS LEASING IN TROPHY BUILDINGS FALLS
Takeaway
Businesses in Chicago showed continued willingness to pay record rent for quality space. Much of the new trophy product was pre-leased in 2016. Fewer leases were completed in trophy buildings during 2017. In turn, negotiated rent inched up by only 0.3%, compared to a spike of 6.0% in 2016. Tenant effective rent fell by 2.6% as landlords extended generous improvement allowances. Little change is expected in 2018 – negotiated rent will increase only moderately.