Chicago office subleases grow as Boeing building empties

Neighboring West Loop building loses another firm’s commitment as companies shed offices

Chicago /
May.May 11, 2022 08:42 AM
From left: Edzard Overbeek, CEO, HERE Technologies and the Boeing Building at 425 West Randolph Street; Richard Edelman, CEO, Edelman and 111 North Canal Street (Edelman, HERE Technologies, LoopNet)

From left: Edzard Overbeek, CEO, HERE Technologies and the Boeing Building at 425 West Randolph Street; Richard Edelman, CEO, Edelman and 111 North Canal Street (Edelman, HERE Technologies, LoopNet)

Boeing isn’t the only company cutting back on space in its headquarters in Chicago’s West Loop.

Since the company’s plans to move its corporate base out of the city to Arlington, Virginia became public last week, the second-largest tenant in the Boeing-owned building at 110 North Riverside Plaza decided it’s ready to shed more space, Crain’s reported.

Location data company Here Technologies offered another 95,000 square feet across the Boeing Building’s 10th and 11th floors on the sublease market.

The move illustrates softening demand for offices in the nation’s second-largest central business district, where sublease availability in the first quarter already hit a record of 6 million square feet. Sublease offerings almost doubled in downtown Chicago since the pandemic began, reflecting diminished desire for physical workplaces after working from home became commonplace.

Companies signing new leases are frequently downsizing, and some of those that have moved into new offices, such as Fubo Gaming, have tried to quickly leave.

Edelman, a public relations firm that leases next door to the Boeing building, at 111 North Canal Street, is also among them. In November, it moved into new offices across 92,000 square feet in the West Loop building on a 15-year lease, cutting back from 170,000 square feet it previously rented in the Aon Center in the East Loop. Now, it’s already listing 28,000 square feet, about a third of its Canal Street space, as available for up to five years, meaning Edelman could take some of the space back.

Following the lead of many other employers, Here wants to be flexible with how often its employees are required to come into work. As more workers expect to work from home part time, it and other companies are reducing their real estate spending while still keeping physical offices for workers to use one to four days a week.

The company has implemented a hybrid work policy, a spokesman told Crain’s. Many of its 550 Chicago-area employees in roles like engineering, sales and marketing have “dedicated time to meet in-person for that essential connection, collaboration and creativity,” the spokesperson told the outlet. They are still allowed to get the majority of their work done remotely.

[Crain’s] – Sam Lounsberry





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