John Buck Co., one of Chicago’s top developers, decided that two is better than one when it comes to downtown towers.
The plans to build a two-tower office building in the West Loop, rather than a single skyscraper, Crain’s reported. It’s a bet on the value of new office properties in a post-pandemic world where fewer large tenants are available to take up leases.
The project, at 655 West Madison Street along the Kennedy Expressway, was originally meant to be a single, 1.5 million-square foot tower. Buck struck a deal with the property’s longtime owner to buy the site if the city approves a plan for redevelopment, and has had its eye on it since 2019, according to Crain’s. The site is one of the few remaining full-block surface parking lots in the West Loop.
Buck made its name developing full-block skyscrapers in the city’s central business district and downtown. As companies cut back on workspace to cope with the popularity of remote work, the Buck will split the project in two and build one at a time. Downtown office vacancies are at record highs and many companies are trying to offload space amid rising interest rates that could make it more difficult to get financing for the project.
CEO John Buck II estimated that he’ll need to pre-lease between 150,000 and 200,000 square feet to launch the first tower, down from the 500,000 square feet he would normally want to lease.
“Our feeling is that the office is here to stay, but it is clear that virtually all users are going to reduce their footprints, and maybe in the neighborhood of 30 percent to 50 percent with remote working becoming en vogue,” Buck told the outlet. “But there will be a flight to quality.”
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[Crain’s] – Rachel Herzog