Chicago’s iconic Merchandise Mart may be on the cusp of landing its biggest new lease in years.
Leasing agents for the riverside property are in talks with online lender Avant to lease 80,000 square feet in the building, which is set to undergo $60 million of renovations, Crain’s reported, citing people familiar with the lease negotiations.
The deal isn’t complete and could still fall apart, and it isn’t clear when Avant would move in, according to the outlet. The new office lease would double the company’s 40,000 square foot headquarters across the river at 222 North LaSalle Street, where the lender has been since 2015, Crain’s reported.
The building’s owner, New York-based Vornado Realty Trust, is planning to start a major renovation this year on the Mart’s first two floors to compete with Fulton Market, one of few bright spots in a Chicago office market facing near-record vacancies through the pandemic.
The newer Fulton Market area over the last year defied the rest of the market by luring tenants amid the pandemic, including insurance claim software provider CCC Intelligent Solutions, which used to rent 125,000 square feet in the Merchandise Mart, Crain’s reported.
Market reports suggest companies are seeking new Class A office space in Chicago, even as companies reconsider their needs for downtown offices after relying on remote work setups during the health crisis.
The Mart, the largest building in the world when it opened in 1930, remains one of Chicago’s most recognizable structures. It was about 89 percent leased at the end of the third quarter, better than the 80 percent average for downtown office buildings, Crain’s reported. Still, that rate puts the building’s vacancy at its highest since at least 2007, Crain’s reported, citing Vornado annual reports.
Avant’s current home in the 1-million-square-foot LaSalle Street building owned by New York-based Tishman Speyer is almost 86 percent leased, according to CoStar Group.
[Crain’s] – Sam Lounsberry
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