Staffing company adds to Chicago sublease glut in retreat from Old Post Office

TrueBlue adds to the record-high

TrueBlue's Steven C. Cooper with 433 West Van Buren Street
TrueBlue's Steven C. Cooper with 433 West Van Buren Street (Getty, True Blue)

A staffing company is giving up some of its Old Post Office space, opening a sublease in a building that filled up quickly after renovation to a record secondary market supply.

TrueBlue has listed just under 83,000 square feet in the renovated building at 433 West Van Buren Street, CoStar reported. The company moved into the office building in 2019 after vacating a pair of offices on Goose Island.

Chicago’s glut of secondary supply being offered by tenants is far from an isolated problem for landlords. On the West Coast, landlords in San Francisco, too, are increasingly competing with larger sublease spaces for deals, with Airbnb recently offering 150,000 square feet just days after it listed 300,000 in another Bay Area complex.

What was once the largest post office in the world was transformed into a Chicago office building when New York-based 601W Companies spent $800 million on renovations in 2019.

TrueBlue’s listing might give a tenant who wanted in but was passed over during leasing a chance to slide in through the side door on the secondary market. In March, the building came close to being fully occupied when health care provider VillageMD agreed to lease more than 50,000 square feet. At the time the property’s other tenants included Uber, Ferrara Candy Co., HomeChef and the headquarters for the country’s biggest options exchange Cboe.

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Back in August, the Mark Karasick-managed 601W Companies landed $215 million in financing to advance a plan to transform a vacant southwest Loop property into a modern 700,000-square-foot office building. The parcel at 801 South Canal Street, is located a block south of the Old Post Office.

Even with some such ambitions, signs are pointing to Chicago’s office recovery being a long one, with market lulls including the third quarter. The city’s total leasing dropped to its lowest level in more than a year in the the quarter, with transactions totaling 1.8 million square feet, according to a report from Savills.

And even more real estate was put onto the sublease market in the last three months, reversing course from earlier this year, when tenants had started to make a dent in the key metric of supply, to set the new high of 6.6 million square feet.

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Victoria Pruitt