Is Gen Z Misunderstood?
Despite its reputation as the "work from anywhere" generation, Gallup data shows Gen Z is actually the least likely of any generation to want to work remotely full-time. Only 23% of remote-capable Gen Z employees say they'd prefer a fully remote setup, compared to 35% of every older generation.
Loneliness is a major driver of that shift. Gen Z workers are nearly twice as likely as Gen X, and almost three times as likely as Baby Boomers, to say they felt lonely "a lot" the previous day. Career advancement plays a role too. Younger employees, still building their professional relationships and reputations, feel that risk more acutely than colleagues who already have established networks.
At Peak, it's no secret that we prefer being together in the office. Much of our team works a hybrid schedule, balancing in-person collaboration with at-home work. The data suggested that balance is exactly what's resonating with the workforce coming up now. Hybrid is emerging as the clear preferred model going forward.
But Peak Properties is a property management company, what does this have to do with real estate? Everything.
The Space Behind the Shift
The pandemic changed how people work almost overnight. With millions of employees suddenly working from home, companies' commercial leasing needs changed right along with them. They simply didn't need sprawling offices built for thousands of employees who weren't coming in.
The numbers tell that story clearly: Chicago's central business district (CBD) office vacancy rate sat at just 13.8% when the pandemic began in early 2020. From there, it climbed almost without interruption, hitting record high after record high for 15 consecutive quarters, according to CBRE data reported by Crain's Chicago Business, and reaching 28.2% at the end of 2025 before setting yet another record of 28.6% in the first quarter of 2026.
The encouraging news: that streak may finally be breaking. In the second quarter of 2026, Crain's reported that downtown vacancy dipped for the first time since 2022. It's a meaningful reversal after four straight years of climbing. It's early, and one quarter doesn't undo half a decade of trend, but it's a signal that Chicago's office market may finally be turning a corner.
It's Not Just Whether People Come Back — It's Where
The recovery isn't uniform. Class A and A+ "trophy" buildings are seeing demand, and even rent growth in some cases. Meanwhile, older Class B and C stock continues to struggle with above-average vacancy rates.
Companies are consolidating into smaller, more premium footprints with better amenities and more modern environments, rather than renewing into the same square footage they had in 2019.
It's the same story showing up in the Gallup data, just from a different angle. The question: are workers rejecting the office, or are they rejecting the office of yesteryear?
Chicago Is Actively Shrinking the Glut
At the same time demand is bifurcating by quality, the City of Chicago is working to shrink the oversupply at the root, largely through the LaSalle Corridor Revitalization initiative. Six office-to-residential conversion projects along the LaSalle corridor now represent more than $900 million in total investment, 2 million square feet of converted space, and nearly two thousand apartments.
As of January 2026, the City had approved more than $315 million in Tax Increment Financing (TIF) to support those projects. Beyond those six, an additional 14 conversion projects are moving forward in the Loop without any City financial subsidy at all. It's a sign that adaptive reuse is starting to pencil out on its own economics.
Every square foot of obsolete office space that gets converted to housing is a square foot that comes out of the office vacancy calculation for good. As working expectations have changed for both employers and employees, it's a structural improvement to Chicago's CBD.
The Consensus
Across generations, workers largely agree: hybrid, not fully remote, is the preferred model going forward. But they don't want to just go to any office. They want premium space, real amenities, and an environment that reflects how they want to show up to work.
For owners and operators, that leaves two questions worth asking about every asset in the portfolio:
- Is the office comeback happening? The data increasingly says yes — cautiously, unevenly, but yes.
- Is this specific building part of the shrinking pool of space people actually want — or part of what might get converted next?
Class B and C assets that can't compete for tenant demand aren't necessarily dead weight. For adaptive reuse investors and developers, they may be exactly the opportunity LaSalle Corridor Revitalization was built for.
To talk about your real estate needs, discuss the market, or learn what this might mean for your property, contact Peak Properties here.
Peak Properties has been serving Chicago and the Chicagoland area for nearly three decades. With a dynamic team, centuries of combined real estate experience, and a culture of trust, teamwork, and accountability, we are dedicated to ensuring the best experience for our residents and clients.
Visit our website to learn more or get in touch with our management team today.
www.peakproperties.biz | 773-281-5252 | @peak_properties
Sources
- Gallup, "Fully Remote Work Least Popular With Gen Z", August 2025
- Axios, "Why Gen Z wants more office work", February 28, 2026
- CNBC, "Gen Z employees aren't in favor of fully remote work, Gallup report says", August 5, 2025
- Crain's Chicago Business, "Downtown Chicago office vacancy ended 2023 at record high", January 10, 2024
- The Real Deal, "Downtown Chicago Office Vacancy Continues Descent", January 15, 2025
- The Center Square, "Chicago office vacancy rates worsen, card swipe numbers offer hope", April 7, 2026 (citing CBRE data via Crain's Chicago Business)
- Crain's Chicago Business, "Downtown office vacancy dips for first time since 2022", July 8, 2026
- City of Chicago, Department of Planning and Development, "Landmark Designation, Tax Incentive Approved for 30 North LaSalle", May 2026
- City of Chicago, "LaSalle Invitation for Proposals (IFP)"
Note: Office vacancy figures vary somewhat by data provider due to differences in methodology and building sets tracked. This piece uses CBRE data as reported by Crain's Chicago Business throughout for consistency.
