Intercontinental nabs Fulton Market lease as Steelcase exits Mart

Another furniture showroom is leaving the iconic Merchandise Mart for Fulton Market, setting off a shuffle as competition consolidates in the development hotspot west of the Chicago River.

Boston-based landlord Intercontinental Real Estate landed a lease with furniture design firm Steelcase for about 28,000-square-feet at 811 West Fulton Market Street, in a downsize from the approximately 50,000 square feet it rents at the Mart, according to sources familiar with the deal.

That will allow Steelcase to take over another showroom’s lease, for the space currently occupied by design firm MillerKnoll at 811 West Fulton. MillerKnoll is going to take about 23,000 square feet in a 10-year-lease  from Chicago-based developers Fulton Street Cos. and Latsko Interests, at 1144 West Fulton Market.

That will put its employees that had been in the 811 West Fulton building closer to MillerKnoll’s 45,000-square-foot location at 1100 West Fulton, which is owned by Zagame Corp. Zagame bought the building for $42 million in 2021 from Fulton Street Cos.

Steelcase’s exit from the Mart amplifies a major shift within the interior design industry, which had long made the Mart its center of gravity in Chicago. It was set off in part by MillerKnoll in 2019 — it was then called Herman Miller before that company bought the Knoll brand — ditching the Mart for 1100 West Fulton after 80 years on the ultrawide riverfront building.

“Fulton Market is a vibrant and thriving Chicago neighborhood where the industry is clustering, and it’s become an important destination for the design community,” a Steelcase spokesperson said. “We shortlisted several locations in and outside of Fulton Market as a part of our market research. Ultimately, 811 West Fulton was the best overall solution for our business and our partners.”

Neither Intercontinental, Latsko nor Fulton Street Cos. immediately returned requests for comment, nor did leasing representatives for The Mart. MillerKnoll also did not return a request for comment.

Furniture showroom moves into Fulton Market make sense, considering the area is where most new commercial development is occurring in Chicago, and thus where office tenants will be looking to shop to outfit their interiors. Fulton Street Cos. was the only developer to break ground on a major office building in the city last year — widely considered one of the worst years for the office market because of the drop in demand from the pandemic and rising interest rates — with its more than 400,000-square-foot project at 919 West Fulton Street.

Luring Steelcase marks another win for the 70,000-square-foot 811 West Fulton, which notched a record-high sale for a Chicago office building bigger than 40,000 square feet when its developer, Shapack Partners, sold it for more than $50 million to Intercontinental in 2019. The price of $775 per square foot was an all-time-high when it closed, but it has since been surpassed by other deals in Fulton Market.

MillerKnoll could expand into the rest of the 30,000-square-foot 1144 West Fulton to push that building to fully leased. Meanwhile, with Steelcase taking over MillerKnoll’s lease at 811 West Fulton, that building remains fully leased.

The joint venture of Fulton Street Cos. and Latsko Interests picked up 1144 West Fulton as part of a portfolio purchase of other small loft office buildings that total 77,000 square feet, in a 2022 deal for nearly $34 million. Other buildings in the portfolio include 1101 West Fulton, 220 North Aberdeen and 112 North May Street as well as the parking lot at 351 North May Street.

Leasing brokerage Madison Rose represented the landlord at 1144 West Fulton in relocating MillerKnoll.

Editor’s note: This story was updated to clarify the ownership of 1100 West Fulton Market Street.