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Chicago Suburban Office Market: Tenants Downsize and Upgrade to Class A
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Date:
05 Apr 2026
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Chicago’s suburban office market is splitting sharply. High-quality Class A buildings attract tenants willing to pay more for better space. Meanwhile, Class B and C properties are declining rapidly and may disappear within the next decade. This is not a uniform market downturn but a separation based on building quality, according to Gordon Lamphere, Vice President at Van Vlissingen and Co.
“Class A space is still incredibly resilient. The problem is everything else,” Lamphere says. He explains that tenants need a compelling reason to bring employees back to the office. Without amenities and modern features, older buildings cannot compete with remote work.
Downsizing and Upgrading
Tenants in Chicago’s suburbs are reducing their office footprints by about 20% while upgrading to newer, higher-quality buildings. Lamphere notes this is not just a cost-cutting measure but a shift in workplace strategy. Companies are choosing modern layouts, advanced systems, and amenities over sheer square footage, even at higher rents.
“Tenants generally want about 20% less space,” Lamphere explains. “They’re downsizing floor plans while upgrading their space. Many are moving from larger, less efficient Class B and C buildings into smaller Class A spaces.”
A recent 20,000-square-foot lease in the O’Hare submarket illustrates this trend. The tenant moved from older Class B and C space to a Class A building, accepting higher rent for better amenities and a more efficient layout. This allowed the company to reduce space per employee while improving the work environment.
Demand now concentrates in the highest-quality buildings. Class A properties capture most tenant activity, while older buildings can only compete on price. For tenants, this strategy is insufficient when remote work offers a strong alternative.
“The winners of the game are winning even more than they ever were before in terms of Class A buildings,” Lamphere says. “Class B and C space is struggling.”
Obsolescence of Older Buildings
The gap between Class A and lower-tier office space is structural and likely permanent. Large-format Class B and C buildings, particularly former call centers and back-office operations, face the highest risk of obsolescence.
Lamphere predicts, “A large portion of the market is probably not going to be around five to ten years from now. Big Class B and C buildings that used to be call centers are going to go the way of the dinosaurs.”
Tenants now expect buildings to offer reasons to work on-site. Properties lacking modern amenities, efficient layouts, or unique features cannot compete. Simply lowering rents does not offset functional shortcomings.
Smaller office condos under 5,000 square feet still perform adequately because they meet specialized in-person business needs. Mid-sized and large-format Class B and C buildings are losing relevance as tenants focus on quality and purpose-built space.
Implications for Landlords
This split has created clear winners and losers. Owners of Class A buildings see strong demand and command premium rents. Landlords with Class B and C properties face declining occupancy, falling rents, and limited repositioning options.
Van Vlissingen and Co. focuses on Class A opportunities, guiding tenants from outdated to modern spaces. The firm combines expertise with analysis of floor plans and construction costs to help clients make informed decisions.
For investors, the message is clear: quality determines value. Buildings without modern amenities, updated systems, or compelling reasons for employees to return will likely become obsolete. This is not a temporary downturn but a long-term market shift.
Van Vlissingen and Co., active in Chicago for nearly 150 years, completed over 100 transactions in 2025 and is on pace for about 150 in 2026. Their growth reflects efficiency and the ability to navigate a divided office market. As the gap widens between Class A and lower-tier properties, firms that identify quality assets and structure deals around tenant needs are poised to capture more activity.
Looking ahead, the Chicago suburban office market will reward owners and investors who prioritize quality and adaptability. As demand consolidates in Class A space and older buildings become less viable, the divide between winners and losers will intensify. Landlords and investors who fail to upgrade or reposition assets risk falling behind in a market redefining office space requirements.
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