Data as of October 2026 | Last updated October 8, 2026
Palatine office vacancy is 22.9%, up from 21.6% a year ago, across the 13 multi-tenant buildings Tenant Advisors tracks, the lowest vacancy of the eight Northwest Suburbs cities we cover. Asking rents average about $19.50/SF gross. Almost half the available space sits in one building.
Net absorption was negative 7,800 SF over the past year, and nothing new is under construction. Tenant Advisors, Inc. represents only tenants in Palatine and the Northwest Suburbs office market, at no cost to tenants. Call (847) 778-0296.
Key Takeaways
- Vacancy is 22.9%, the lowest in the Northwest Suburbs.
- Asking rents average about $19.50/SF gross.
- 800 E. Northwest Highway holds about 72,000 SF, almost half of what is available in town.
- No sublease space is listed in the tracked buildings.
Palatine Office Market Facts and Figures
Tenant Advisors tracks multi-tenant office buildings of 5,000 SF and larger in Palatine, the competitive set where most tenants of 3,000 to 50,000 SF lease space. Owner-occupied buildings are excluded.
| Metric | Palatine |
|---|---|
| Tracked buildings | 13 |
| Total inventory | 589,000 SF |
| Vacancy rate | 22.9% (21.6% one year ago) |
| Availability rate | 25.6% |
| Net absorption, trailing 12 months | -7,800 SF |
| Space leased, trailing 12 months | 51,400 SF |
| Average asking rent | ~$19.50/SF gross |
| Free rent | 1–1.5 months per lease year |
| Tenant improvement allowance | $6–$8/SF per lease year (Class A) |
| Average months on market | 19.3 |
| Lease renewal rate, past 24 months | 37% |
| Sublease space available | None in tracked buildings |
| New construction | None |
| Most available space in one building | ~72,000 SF (800 E. Northwest Hwy.) |
Figures reflect Tenant Advisors’ market tracking of multi-tenant office buildings 5,000 SF and larger in Palatine. Rents and concessions are Tenant Advisors’ tracked-transaction ranges, quoted full-service gross. Data is updated quarterly.
Is Palatine Office Space Filling Up or Emptying Out?
Holding, with a slight drift up in vacancy. Palatine lost 7,800 SF of occupied space over the past year, and vacancy rose 1.3 points. Tenants still leased 51,400 SF. Available space sits on the market about 19 months on average.
What Are the Notable Office Buildings in Palatine?
| Building | Address | Size (SF) | Built | Class | % Leased | Available (SF) |
|---|---|---|---|---|---|---|
| 800 E. Northwest Highway | 800 E. Northwest Hwy. | 142,000 | 1970 | B | 49% | 71,807 |
| Countryside Office Park | 1204–1332 W. Northwest Hwy. | 112,000 | 1970 | C | 94% | 7,052 |
| Gateway Center | 220 N. Smith St. | 101,827 | 2002 | B | 95% | 17,474 |
| The Pointe of Palatine | 1540 E. Dundee Rd. | 39,485 | 1985 | C | 54% | 18,147 |
| Hummel Building | 110 N. Brockway St. | 37,890 | 2000 | A | 100% | 100 |
| Office Park of Palatine area (5 buildings) | North Ct. and First Bank Dr. | 100,469 | 1975–1990 | B/C | 70% | 30,831 |
Available SF includes direct and sublease space, including space coming available. Tenant Advisors market tracking, October 2026.
800 E. Northwest Highway
142,000 SF across 10 stories, the tallest office building in Palatine. It is about 49% leased, with roughly 72,000 SF available, almost half of all available office space in town. This is the best place in Palatine to push for concessions.
Gateway Center, 220 N. Smith Street
101,800 SF, built 2002 and 95% leased, a short walk from the Palatine Metra station. It is the best-performing larger building in town, and openings move quickly.
Countryside Office Park, 1204–1332 W. Northwest Highway
112,000 SF of single-story office, about 94% leased. It suits professional and healthcare-adjacent users who want ground-floor access.
Hummel Building, 110 N. Brockway Street
37,900 SF, built 2000, the only Class A office building in Palatine. It sits in downtown Palatine and is essentially full, at about $26/SF gross the highest asking rent in town.
The Pointe of Palatine and Office Park of Palatine
The Pointe on Dundee Road is about 54% leased. The five buildings around North Court and First Bank Drive total about 100,000 SF and are about 70% leased, with suites from about 300 to 4,500 SF. This is Palatine’s deepest pool of small-office space.
Is There Sublease Office Space in Palatine?
Not in the 13 buildings Tenant Advisors tracks. Tenants who want sublease options nearby usually look at Schaumburg, which has about 134,000 SF, or Arlington Heights.
How Does Palatine Compare With Other Northwest Suburbs Cities?
| City | Vacancy | Year ago | 12-mo net absorption (SF) | Inventory | Sublease SF | Asking rent, gross |
|---|---|---|---|---|---|---|
| Schaumburg | 33.1% | 34.4% | +109,900 | 8.6M SF | 134,400 | A $34–$38; B $20–$24 |
| Hoffman Estates | 42.8% | 43.9% | +36,100 | 3.2M SF | 99,900 | A $34–$38; B $19–$24 |
| Arlington Heights | 40.9% | 37.8% | -53,100 | 1.8M SF | 4,600 | A ~$26; B ~$19 |
| Rolling Meadows | 41.2% | 36.9% | -92,000 | 2.1M SF | 0 | A ~$30; B ~$19 |
| Palatine | 22.9% | 21.6% | -7,800 | 589,000 SF | 0 | ~$19.50 average |
| Barrington | 66.0% | 65.0% | -6,300 | 665,000 SF | 0 | A ~$30; B ~$18 |
| Elgin | 38.6% | 38.1% | -12,700 | 2.1M SF | 3,600 | A ~$26; B ~$20 |
| Itasca | 25.4% | 21.3% | -103,000 | 2.5M SF | 43,300 | A $24–$28; B $19–$24 |
Tenant Advisors market tracking, multi-tenant office buildings 5,000 SF and larger, October 2026. Rents are Tenant Advisors’ tracked-transaction figures per SF per year.
Where Is the Leverage in Palatine Right Now?
Palatine’s vacancy is concentrated. Gateway Center and Countryside are more than 90% leased, while 800 E. Northwest Highway and The Pointe carry 45% to 50% vacancy. Owners with large vacancies compete on rent, free rent and build-out dollars. A tenant that puts a well-leased building and a high-vacancy building in competition usually gets the best of both. Renewals are leverage too: only about 37% of Palatine tenants with expiring leases renewed over the past two years. See our office lease renewal negotiation page.
What Should Tenants Negotiate on a Palatine Office Lease in 2026?
- Rent: target the effective rent after concessions, not the asking rate.
- Free rent: 1 to 1.5 months per year of lease term, or 5 to 7.5 months on a 5-year lease.
- Tenant improvement allowance: $6 to $8/SF per year of lease term in Class A ($30 to $40/SF on a 5-year lease) and about $3 to $6/SF per year in Class B. Get build-out pricing before you negotiate this number.
- Operating expense caps: 4% to 6% annually on controllable expenses.
- Flexibility: expansion, contraction and sublease rights, negotiated upfront.
- Parking: included in rent for the full term with no separate escalation.
Why Do Companies Lease Office Space in Palatine?
Palatine has a walkable downtown built around its UP-Northwest Metra station, Harper College’s workforce pipeline and a large base of professionals who would rather work close to home. Route 53, Rand Road and Northwest Highway connect it to I-90 and the rest of the Northwest Suburbs office market. Law, accounting, wealth management, healthcare and professional services firms make up most of the tenant base.
Frequently Asked Questions
What is the office vacancy rate in Palatine, IL in 2026?
Palatine’s multi-tenant office vacancy is 22.9% as of October 2026, up from 21.6% a year earlier, across the 13 buildings Tenant Advisors tracks. That is the lowest of the eight Northwest Suburbs cities Tenant Advisors covers. Counting space that is coming available, the availability rate is 25.6%.
How much does office space cost in Palatine, IL?
Asking rents in Palatine average about $19.50/SF gross. The Hummel Building, the only Class A building in town, asks about $26/SF. Tenants running a competitive process typically pay less than asking once free rent and build-out dollars are counted.
What is the largest office building in Palatine?
800 E. Northwest Highway, at 142,000 SF and 10 stories, is the largest multi-tenant office building in Palatine. It also has the largest block of available space in town, about 72,000 SF.
Is there sublease office space in Palatine?
Not in the 13 multi-tenant buildings Tenant Advisors tracks. Schaumburg has about 134,000 SF of sublease space.
How much free rent can I get on a Palatine office lease?
Tenants are getting 1 to 1.5 months of free rent per year of lease term, or 5 to 7.5 months on a 5-year lease, plus tenant improvement allowances of $6 to $8/SF per lease year in Class A.
Who represents tenants in Palatine office leases?
Tenant Advisors, Inc., founded in 2004 by Tom Koelzer and Dave Ven Horst, represents only office tenants in Palatine and the Northwest Suburbs. The firm never represents landlords, and tenants pay nothing for the service. Contact Tom Koelzer at (847) 778-0296 or tkoelzer@tenantadvisors.com.
About the authors: Tom Koelzer (Co-Founder & Managing Partner, LinkedIn) and Dave Ven Horst (Co-Founder & Managing Broker, LinkedIn) founded Tenant Advisors, Inc. in 2004. Both have worked in Chicago office leasing since 1986, and the firm has negotiated more than 2,000 office leases, representing tenants only. Benchmark your Palatine lease against the market: (847) 778-0296 | tkoelzer@tenantadvisors.com.
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