In another blow to Chicago’s struggling office market, the aerospace giant Boeing is set to leave its West Loop headquarters after 21 years of anchoring the building.
The company will relocate its headquarters to Arlington, Virginia, the Wall Street Journal reported, citing people familiar with the matter.
Boeing’s departure comes after last year’s expiration of a package of tax breaks and other incentives worth more than $60 million that Chicago, Cook County and Illinois awarded the company when it relocated to 100 North Riverside Plaza, just west of the Chicago River from the Loop.
In 2005, four years after Boeing moved into the building on a 15-year lease, it bought the 36-story, 770,300-square-foot tower from the Florida State Pension fund for $200 million, the Chicago Tribune reported at the time. The company occupied more than a third of the building at that time.
If the company reduces its footprint in the building, the departure would further harm Chicago’s central business district, which is already facing a record-high vacancy rate of 21.2 percent, according to CBRE. The recent vacancy rate hike was driven by new supply hitting the market rather than tenants pulling out of offices, but the pandemic has diminished demand for downtown workplaces outside of the newest developments.
Boeing last year insisted significant operations still take place in its Chicago headquarters even as remote working arrangements leave the building mostly empty amid the pandemic. The company last year also made moves to shed real estate across its portfolio, but the company rebuffed a suggestion it would leave its Midwest base, Reuters reported in October. “Chicago is strategically important to Boeing’s U.S. and global operations,” a spokesperson told the outlet. “As with other companies, we have adapted to hybrid ways of working in the midst of the global pandemic to engage with our people, and our customers and other stakeholders.”
More Boeing senior executives have been working out of its Washington, D.C.-area offices in recent years, the Journal reported. In 2017, the company said it would move its defense unit’s headquarters to Arlington from St. Louis to be closer to lawmakers and Pentagon officials, with government affairs and other staff also working from the office complex opened in 2014.
A formal announcement of the company’s move is expected next week, the Journal reported.
[WSJ] – Sam Lounsberry