Valor Equity Partners, an early backer of Elon Musk ventures, is moving its Chicago offices to a Tishman Speyer-owned building in the Fulton Market district from the Magnificent Mile.
The private equity firm is leasing more than 24,000 square feet on the top floor of 320 North Sangamon Street, a 13-story building that opened last year, Crain’s reported, citing people familiar with the deal.
The move marks an expansion from the firm’s 12,000 square feet at the tower formerly called the John Hancock Center at 875 North Michigan Avenue on Chicago’s most famous retail strip, the Magnificent Mile. Valor’s two leases there expire by the end of next year.
It’s the latest win for Tishman, which developed the 270,000-square-foot Sangamon Street property with Chicago’s Mark Goodman on speculation, without signing tenants before the pandemic drained downtown demand.
The partnership defied the public health crisis. The building has been among Chicago’s best-performing of the pandemic, landing tenants such as biotech startup Hazel Technologies across 50,000 square feet as well as real estate tech company VTS, which leased 36,000. It’s now 87 percent leased. Hazel’s buildout of its lab and office space was just completed by Skender Construction, and its needs for lab space helped motivate the developers to alter their plans to include features required by life sciences and research and development teams.
Tishman and Goodman just scored a $26.1 million loan on the property from Wells Fargo, a sign of its strong performance and ability to carry more debt after obtaining an $81.4 million construction loan in 2019.
Valor’s exit from the Mag Mile is the latest tenant loss for Chicago’s Hearn, the firm that owns 875 North Michigan. One of its largest tenants, software firm SMS Assist, exited 85,000 square feet in the skyscraper six months ago when it moved to the Prudential Plaza complex at 130 East Randolph Street. The former Hancock Center’s landlord is in the midst of adjusting much of its office space for medical office tenants, rebranding it as the Mag Mile Medical Pavilion to market to doctors and hospitals that might want clinics in the building.
Four new medical office leases totaling 35,000 square feet are being completed on the Mag Mile landmark, and the landlord may dedicate even more space within the tower to medical users than the 125,000 square feet planned now, Hearn President and CEO Steve Hearn told Crain’s. “We’ve had a very strong response,” Hearn said.
Robert Sevim of Savills negotiated the Valor Equity lease on behalf of the firm, while Tishman’s Adam Mitchell and Ellen May oversee leasing at the Fulton Market building.
[Crain’s] — Sam Lounsberry
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