In WFH world, tech firm won’t move into new Sterling Bay building

After signing in December, Flexport wants to sublease its 40K sf at 333 N Green

Chicago /
Jun.June 11, 2020 12:00 PM
Flexport CEO Ryan Petersen and Sterling Bay’s 333 N. Green St. (Credit: Sterling Bay and FreightWaves)

Flexport CEO Ryan Petersen and Sterling Bay’s 333 N. Green St. (Credit: Sterling Bay and FreightWaves)

Six months ago, freight tech firm Flexport signed a lease to occupy 40,000 square feet at Sterling Bay’s latest office building, 333. N. Green St. in Fulton Market.

But in today’s Covid-19 world, the San Francisco-based company has abandoned those plans and will look to sublease the space as it shifts to a part work-from-home model, Crain’s reported. Flexport has offices at 370 N. Carpenter St. as well as a WeWork location not far away, though it previously said it had outgrown both.

The company signed with Sterling Bay in December and expected to move 140 employees into the new 550,000-square-foot building. It never made the move to the 19-story complex, known as Gr33n, Crain’s reported.

“Like many companies, Flexport is reevaluating its real estate strategy as it explores a hybrid working model,” a Flexport spokeswoman told Crain’s in a statement. “We’ll be taking a closer look at the Chicago commercial real estate market over the next few months to determine the right office location and size for our team.”

Flexport’s lease, which runs through March 2027, hired CBRE to market the space for sublease, according to the report.

The decision abandon the move is a blow to Sterling Bay and Chicago’s CRE market, which had been touting the emergence of tech companies like Uber that have been taking big leases. Last year, Chicago saw more than 2 million square feet of new office space absorbed into the Downtown market, about 50 percent higher than the year before. With the new office space and an increasing number of firms moving to the city from the suburbs, residential developers began building pricier projects in Chicago, able to attract young upwardly-mobile workers.

Sterling Bay’s Gr33n building, which it will make its new headquarters, includes 35,000 square feet of retail. The developer inked leases for the under-construction building with advertising agency WPP, co-working firm Convene and global accounting giant Ernst & Young. Early last month, Convene said it would reduce its own office capacity by 50 percent companywide to allow workers to maintain social distancing.

The coronavirus, which upended the local economy, has also cast doubt on the long-term need for that kind of massive office space in an increasingly work-from-home world.

Founded seven years ago, Flexport received a $1 billion investment from Softbank in early 2019. [Crain’s] Alexi Friedman 


Related Articles

arrow_forward_ios
Foxtrot Market CEO Michael LaVitola and 167 N. Green Street 
Convenience store chain eyes new Fulton Market HQ
Convenience store chain eyes new Fulton Market HQ
(Getty, iStock/Illustration by Alexis Manrodt for The Real Deal)
Covid eviction cases would be sealed under state bill
Covid eviction cases would be sealed under state bill
Lincolnwood Town Center in Lincolnwood and Washington Prime Group CEO Louis Conforti (Google Maps, Twitter)
Lincolnwood Town Center’s $47M loan in default again
Lincolnwood Town Center’s $47M loan in default again
Cook County Board President Toni Preckwinkle (Getty, iStock)
Suburban renters, landlords get a shot in the arm. (No, not vaccine)
Suburban renters, landlords get a shot in the arm. (No, not vaccine)
(iStock)
Chicago mortgage refis soared in 2020
Chicago mortgage refis soared in 2020
Hotel Felix and Holiday Inn Express Chicago - Magnificent Mile. (Hotel Felix, Hotel Cass)
Two more Chicago hotels face foreclosure
Two more Chicago hotels face foreclosure
(iStock, Wikipedia Commons/Illustration by Alexis Manrodt for The Real Deal)
Chicago’s agent count jumps as home sales rise
Chicago’s agent count jumps as home sales rise
Sterling Bay’s Andy Gloor (right), JPMorgan’s Jamie Dimon and 370 North Carpenter Avenue in Fulton Market, one of two properties the companies are selling. (Sterling Bay; Getty; Google Maps)
Sterling Bay and JPMorgan test appetite for redevelopment
Sterling Bay and JPMorgan test appetite for redevelopment
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...