More Chicago office users are downsizing, adding to a record amount of space available downtown.
Echo Global Logistics and VSA Partners said in a statement they renewed leases at Sterling Bay’s 600 West Chicago Avenue building. The new leases represent about a quarter less combined space than they previously occupied.
Echo Global signed on for 185,000 square feet, down from 225,000 it leased in 2016, a move that doubled its footprint at the time. VSA Partners renewed a lease in the 1.6 million-square-foot building, bought by Sterling Bay for $510 million in 2018, for 25,000 square feet, down by half from the 51,000 it agreed to lease in 2016.
Tenants cutting back on real estate have fueled a surge to record vacancies in downtown Chicago offices. The renewals, although smaller, do show that renewing tenants haven’t completely abandoned the office, even as remote working remains the preference for many employees.
Reductions by about 25 percent of existing leases have been common among new deals struck for companies either moving or renewing in Chicago. The parent company of insurer Blue Cross Blue Shield trimmed a quarter of its space with its move within suburban Downers Grove this year. The law firm Levenfeld Pearlstein and health company Vitality Group downsized by similar margins with their moves out of Loop buildings into a riverfront West Loop complex.
Companies are increasingly finding remote work arrangements acceptable for employees at least part of the week. Those that are hanging onto downtown offices are concentrating leasing in the newest and recently renovated buildings with amenities that make commutes worthwhile.
Andrea VanGelder, Kellen Monti, Matt Carolan, and Paul Giannopulos of JLL represented Echo Global Logistics and Steven Livaditis and Jon Milonas of CBRE represented VSA Partners’ in leasing negotiations. Sterling Bay’s Russ Cora and Austin Lusson represented the landlord.
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