Chicago emerging as ground zero for collapse in downtown office values

Office towers that once sold for hundreds of millions of dollars are now changing hands at discounts of 70%, 80%, even 90% across major U.S. cities, as higher interest rates and remote work reshape demand for downtown space.

 Few places illustrate the shift more starkly than Chicago. There, the markdowns span every era of development according to figures first tweeted out by Nightingale Associates.

 A century-old office building in the city’s historic Printing House Row district, 401 S. State St., recently sold for just $4.2 million, down from $68.1 million in 2016, a 94% drop.

The prominent Loop tower at 311 S. Wacker Drive traded at an 85% discount, selling for $45 million compared with $302 million in 2014.

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People look out toward the skyline from a frozen North Avenue Beach on January 24, 2026, in Chicago, Illinois. (Jacek Boczarski/Anadolu/Getty Images / Getty Images)

Even newer, high-profile properties have not been immune. Boeing’s long-term lease interest in 100 N. Riverside Plaza, not the tower itself, sold for $22 million, down from $165 million in 2005, an 87% decline.

And at 300 W. Adams St., a leasehold interest in the building changed hands for just $4 million, compared with $51 million in 2012 — a 92% discount.

Taken together, the deals illustrate how sharply the economics of downtown office real estate have shifted in just a few years, as higher interest rates and remote work reshape demand.

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Retail space for lease in downtown Chicago, Illinois, US, on Tuesday May 27, 2025. (Christopher Dilts/Bloomberg/Getty Images / Getty Images)

The fallout extends beyond landlords and investors. In many major cities, office towers are a cornerstone of the tax base, helping fund schools, public safety and transit — meaning falling property values can ripple through local budgets.

And Chicago is not alone. 

Across the country, downtown office buildings are trading at steep discounts. Last year, an 18-story Dallas office tower sold for $26.1 million, a 64% discount from its $73 million sale price in 2016. 

In St. Louis, a 44-story tower sold in 2022 for $4.5 million, a fraction of the nearly $205 million it fetched in 2006. More recently, an office building in downtown San Jose, California, sold for $23.7 million, well below its $80.1 million sale price in 2017. In Newton, Massachusetts, a three-building office complex changed hands last year for $117.5 million, roughly half of its $235 million price back in 2020. 

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CHICAGO, ILLINOIS – JANUARY 18: A general interior view of Soldier Field prior to the NFL divisional playoff football game between the Los Angeles Rams and Chicago Bears at Soldier Field on January 18, 2026 in Chicago, Illinois.  (Kara Durrette/Getty Images / Getty Images)

Amid broader uncertainty about the future of downtowns, city leaders are also working to retain major economic anchors, including the Chicago Bears. 

The team is exploring a possible relocation to Indiana, where a new stadium could be constructed near Wolf Lake in Hammond, just across the state border.

As property values fall, city leaders face difficult choices: cut services, raise taxes elsewhere, or absorb widening budget gaps.