Tyson Foods lists West Loop office for sublease
233k SF space is office market’s second-largest listing
With its Chicago exit, Tyson Foods is putting a meaty chunk of office space on the sublease market even as most downtown tenants have little hunger for commercial real estate.
The food processing company has listed a 233,000-square-foot, four-story office building located at 400 South Jefferson Street in the West Loop for sublease, Crain’s reported. Tyson has hired Newmark to market the property.
Tyson announced in October that the company would move 500 employees to Springdale, Ark., from Chicago and suburban Downers Grove, joining several other companies in leaving Chicago as their headquarters last year, such as Citadel and Boeing.
The company’s office is now the second-largest downtown Chicago sublease offering, behind Groupon’s almost 291,000-square-foot sublease listing at 600 West Chicago Avenue, and hits the market at a time when there’s already a record-high amount of workspace available. The large amount of supply coupled with remote work trends have created a challenging environment for downtown office landlords in which they’re competing not only with each other but also other tenants that have put their space on the secondary market.
The offering adds to the more than 6.7 million square feet of offices available for sublease to start the year, which is more than twice the amount that was available when the pandemic began, according to CBRE. That pushed the downtown office vacancy rate up to 21.4 percent, the highest CBRE has ever tracked.
Though Tyson would prefer to find a single tenant for the space, the floors are divisible and the company would consider leasing it through multiple smaller deals, Newmark’s Bob Chodos told the outlet.
Tyson’s presence in the building dates back to 2014, when the company acquired meat company Hillshire Brands. The Sara Lee spinoff had moved into the building from Downers Grove in 2012.
The building’s owner is Newton, Mass.-based Office Properties Income Trust. Chicago’s Sterling Bay developed the building and sold it for almost $98 million in 2013 to a company that later merged with other REITs to form Office Properties.
– Rachel Herzog