Chicago-based Telos Group has added another office repositioning play to the brokerage’s repertoire of leasing assignments.
Telos, which bills itself as the city’s only office brokerage dedicated exclusively to landlords, has Jeff Dowdell leading leasing efforts at 101 North Wacker Drive, a 24-story property in the West Loop.
The building is owned by JLL’s investment arm, LaSalle Investment Management, which initially handed off leasing in-house to a JLL team when it bought the building from Hines Interests L.P. for $210 million in 2014. Now, the property has a new tenant lobby and spec suite in the works.
Telos has been tapped to manage leasing for several other Loop office towers that have undergone repositioning amid pandemic-related challenges for the commercial real estate market, including the Blackstone-owned Willis Tower and the Brookfield Properties-owned former Marshall Field building at 24 East Washington Street.
LaSalle’s North Wacker building is 70 percent leased, putting it below the downtown average occupancy rate of 77 percent. Plus, some of its occupancy exists on paper only, as the building’s largest tenants have put up space for sublease since Covid hit. Digital media company Conversant put its 107,000-square-foot space in the building up for sublease in October 2020, and rail car provider TTX listed 103,000 square feet two months later. JLL declined to comment.
But property owners’ renovations have paid off before — logistics firm Spot inked a deal for 31,000 square feet at the Marshall Field building in February, bumping the property up to about 50 percent leased. Brookfield redeveloped the building’s top six floors, which sit above the flagship Macy’s store, into modern office spaces just before the pandemic hit.
It’s a tough market for central business district landlords, and with a record 22.4 percent vacancy rate in Q1 of 2023, tenants have the leverage to seek out the highest quality spaces. The market for spec suites – offices designed, built and furnished by landlords to be move-in ready for tenants – has exploded during the pandemic, marking a shift in the expectations office tenants have for landlords.
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