The West Loop isn’t showing any signs of cooling off, though it is expanding its cold storage occupancy.
Dutch company NewCold signed a lease for more than 35,000 square feet in the 40-story office tower at 500 West Madison Street ahead of plans to hire about 125 new employees, Crain’s reported. The company will relocate from the 6,000-square-foot space it currently occupies on the 31st floor of the same building.
Colliers International’s Dougal Jeppe negotiated the lease expansion for NewCold, while Matt Lerne and Wendy Katz with Stream Realty handle leasing for the building.
The cold storage company develops, owns and operates automated warehouses that serve large food product companies like Conagra and McCain Foods.
NewCold moved into the West Loop office building in 2021 and hired 75 additional staffers. The new office space will allow it to expand further with plans to have more than 200 employees over the next two years.
The new lease is a good sign, not just for the owner of the building at 500 West Madison, but for all downtown office landlords. The expansion is a break from the recent trend of companies shedding office space and downsizing due to the increase in remote work.
The owners of the building NewCold is staying in are KBS Realty Advisors, which signed Accenture as an anchor tenant with a 225,000-square-foot lease. The tower is 96 percent leased, which is a little higher than the average for Class A office buildings downtown at the end of last year, which was 83.3 percent.
Investors have been turning to the cold storage sector, which showed surprising resilience since the start of the pandemic. Across the country, investors in large cities are developing millions of square feet to accommodate demand.
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