Brookfield Properties’ renovation of the landmark Marshall Field building has started to show potential to pay off, as the landlord inked a deal with a logistics firm planning a local employment expansion.
Indianapolis-based Spot, a third-party logistics provider, leased 31,000 square feet on the 11th floor of the building at 24 East Washington Street, Crain’s reported. The company will move into the new office later this year.
It’s one of several logistics and shipping services firms to have leased space in high-profile office properties in the Chicago area in recent months, after two others made big suburban deals.
Longtime commercial real estate player Yisroel Gluck’s firm American Landmark inked a 40,000-square-foot lease earlier this month with logistics business Network Services Company at the Schaumburg Towers property in the northwest suburbs. And last month, New York City-based landlord Sovereign Partners struck a lease with AIT Worldwide Logistics for 57,000 square feet at the 27-story tower at 2 Pierce Place in western suburban Itasca.
Back in the Loop, Toronto-based Brookfield redeveloped the Marshall Field building’s top six floors above the flagship Macy’s store into about 650,000 square feet of modern office spaces just before the pandemic hit. Built from 1892 to 1914, the Marshall Field building is listed as one of Chicago’s landmark properties.
The building is now about 50 percent leased, with tenants including Numerator, Vivid Seats and candy maker Ferrero. In addition, New York-based Industrious operates co-working space in the building.
Chicago’s office market began a slow revival after a devastating 2021, but its vitals indicate it isn’t anywhere near healthy yet. In the city’s central business district, net absorption — which plunged by nearly 24 percent in 2021 — actually rose by almost 43 percent last year, yet still ended up at a negative number, as tenants shed 2.8 million square feet more than they leased, according to TRD Pro.
The office vacancy rate increased by almost 10 percent in the central business district last year, but dropped by more than 4 percent in the suburbs — though the city still had a lower rate overall at 22.3 percent, versus 24.1 outside city limits.
Cresa’s Allen Rogoway negotiated the lease on Spot’s behalf, while Jack O’Brien and Caroline Colnon of Telos Group represented Brookfield.
— Victoria Pruitt
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