It doesn’t get much more 2022 than this: One of the biggest office leases in Chicago’s northwest suburbs in recent years comes from a tenant that’s downsizing.
The Federal Aviation Administration, shrinking its office by almost 40 percent, is taking 116,000 square feet at the Atrium, a three-story building at 3800 Golf Road in Rolling Meadows. The FAA will pay almost $36 million over the course of a 20-year lease, according to General Services Administration spokesperson Tanya Schusler, moving from offices it occupied since 2000 at 2300 East Devon Avenue in suburban Des Plaines.
“The tenant found that the building’s ability to accommodate the FAA’s large office space requirement on a single floor was advantageous,” said Avison Young’s Fred Ishler, who represented the Atrium’s owner, San Francisco-based Spear Street Capital, in negotiations with the FAA.
The lease marks a big commitment to physical workplaces in an office market turned topsy-turvy since many employees fled for home two years ago. Yet it doesn’t provide much relief for a submarket where leasing has been soft for years. Vacances soared to more than 34 percent in the last quarter of 2021, according to a Newmark report.
Spear Street Capital lost its largest Atrium tenant in 2020, when Capital One put its 165,000 square feet up for sublease. The building’s amenities include the area’s largest fitness center, and its proximity to the Woodfield Mall’s retail and dining scene also attracted the FAA, Ishler said.
Tenants have increasingly shed space in Chicago’s office markets when their leases come up for renewal. The northwest suburban market had the largest negative net absorption in the suburbs in the fourth quarter, losing 227,955 square feet, about two-thirds of the entire suburban market’s loss. Suburban vacancies did tick up more slowly in the period than since the pandemic erupted.
It isn’t clear how or whether Washington-based Easterly Government Properties, the owner of the Des Plaines office, intends to fill the space. The company focuses on buying, developing and managing offices leased by the federal government, and didn’t return a request for comment.
The Atrium, which totals 483,000 square feet, has two spaces of more than 67,000 square feet each marketed as available through subleases, according to Property Shark. Tenants include event tickets marketplace TicketsNow and networking solutions provider Cambium Networks.
Hugh Murphy, Delario Bolton, Kasey Hughes, and Clarissa Mahoney-Pascascio of JLL represented the FAA in negotiations. Allie Cooney and Ed Gregorowicz of Avison Young also represented Spear Street.