While geese are flying south for the winter, tech and design professionals are flocking to Chicago’s Goose Island for offices, a reflection of the market’s concentration of tenants seeking untraditional commercial real estate for their workspace.
R2 Companies has inked leases for 54,000 square feet of office space at three of its properties on the long-industrial island in the Chicago River and the nearby area in the River West neighborhood in the last month.
Tech company Azumo took 22,000 square feet at 1200 North Branch Street. Interior designer Kara Mann and private equity firm Left Bank Holdings took 4,000 and 2,000 square feet, respectively, at the same building.
A tenant the company declined to identify, who R2’s Zack Cupkovic said is a well-known Chicago artist and designer, also signed a lease for a 16,000-square-foot space at 1315 North Branch Street, which Hines bought for $47 million earlier this year, though R2 still handles its leasing. Additionally, recruiter Eight Eleven Group expanded its 4,000-square-foot office footprint to 10,000 square feet at R2’s 770 North Halsted Street.
“There aren’t a ton of tenants in the market right now, to be candid, for office, but the ones that are in the market, they don’t want to be in the Loop,” Cupkovic said, adding that those tenants want something more boutique than an office in a high-rise.
Cupkovic said the flurry of leasing is a counterpoint to Chicago’s office market as a whole. The city’s total leasing dropped to its lowest level in more than a year in the third quarter, with transactions totaling 1.8 million square feet, according to a report from Savills.
R2 started buying property on Goose Island in 2014. In 2017, the city approved zoning changes for the area to allow residential and office development outside of a district that remains solely zoned for industrial buildings. Cupkovic said about 140,000 square feet of its 200,000 square feet of available office space is leased. The company also owns and has repositioned the Morton Salt Shed as a performance venue with some office spaces, which Cupkovic said has 100,000 square feet of its 120,000 square feet leased.
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