GoHealth nearing 89K sf sublease in Merchandise Mart

An online marketplace for health insurance is finalizing a deal to sublease a large chunk of space in the Merchandise Mart, a rarity in today’s market with many companies ditching real estate in favor of pandemic-driven remote and hybrid work arrangements.

Chicago-based GoHealth aims to sublease 89,000 square on the 17th floor of the riverside building from software provider VelocityEHS, Crain’s reported. The company, led by Vijay Kotte, is poised to take over the remainder of VelocityEHS’ lease, which runs through June 2028. Terms of the deal were not disclosed.

It’s a sublease within a sublease — as VelocityEHS is already occupying the space from Motorola Mobility — and a big win for landlord Vornado Realty Trust. Vornado will have a chance to re-sign GoHealth to a direct deal rather than try to backfill space VelocityEHS wasn’t using when its deal expires in five years.

The New York-based landlord is currently performing a $40 million renovation at the Merchandise Mart, a popular but risky move to try and lure employees back to the office. The GoHealth deal is a small win for other office landlords, as well, given that there’s still a record 8 million square feet of downtown office space available.

GoHealth will be consolidating its workers who are now operating across three River North buildings at 214 and 220 West Huron streets and 225 West Superior Street. The move is also surprising for a tenant whose stock price dropped to 33 cents per share last year and announced that it would cut 800 jobs. But the company couldn’t resist the move-in ready space in the Merchandise Mart.

“We are dedicated to fostering a workplace culture of innovation and collaboration and look forward to moving to an office space that serves the evolving needs of our workforce,” GoHealth said in the statement.

The Merchandise Mart was 80 percent leased by the end of March. That’s down from 89 percent from the same time last year. 

— Quinn Donoghue 

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