Blame the not-so-friendly economic skies for United Airlines’ decision to shed 150,000 square feet of space from its headquarters at Willis Tower.
The company said it would exercise its option at the Blackstone Group-owned skyscraper, where it has a total of 850,000 square feet, according to Crain’s.
The move is another dagger in the heart of Chicago’s Downtown office market, which has been hammered by the pandemic, as companies have trimmed space, exited leases and abandoned expansion plans.
United has roughly 30 percent as many employees at the 233 South Wacker Drive skyscraper as it did before the coronavirus hit. Companies throughout the country have settled into working from home, keeping employees away from offices despite landlords’ efforts to bring tenants back.
United’s decision will take effect next January. It will shed about 18 percent of its existing office space — three floors — at the city’s tallest building. It is a turnaround from just a couple of years ago, when United extended its lease for 17 floors through March 2033. United had said it would pour hundreds of millions of dollars into improvements there, according to Crain’s.
But Covid-19 changed that, said a spokesperson, noting that the company had become “a smaller airline.” The office reduction at Willis Tower “can ensure we are utilizing our space as efficiently as possible,” she said.
Blackstone bought the landmark Willis Tower for $1.3 billion in 2015, making it the largest single-building buy in the U.S. outside of New York City. The firm has spent hundreds of millions of dollars on upgrades, raising occupancy from mid-70 percent to more than 94 percent.
[Crain’s] — Alexi Friedman