Billionaire Justin Ishbia’s Shore Capital Partners expanded its corporate hub in downtown Chicago after calling its growing cadre of workers back to the office.
The Chicago-based private equity firm has added a new floor to its office at 1 East Wacker Drive, bringing its headquarters to 55,000 square feet on the cusp between River North and the Loop, Crain’s Chicago Business reported.
The deal makes Shore Capital the largest tenant at the 41-story, 697,000-square-foot tower owned by New York-based AmTrust Realty, which bought the building in 2013 for $102.5 million.
The agreement to lease another 16,000 square feet also extends the tenant’s stay by three years through early 2033, making the deal a point of security for AmTrust as it carries out a commitment to pour $100 million into renovations of its portfolio of mostly outdated Loop office buildings to spruce them up post-pandemic standards with new amenities and improvements.
The expansion runs counter to companies that have shed offices during the pandemic and the era of remote work, gutting business districts from San Francisco to New York.
At Shore Capital, remote work was never a long-term option. The company called workers back to its offices a few months into the pandemic. Since then, its Chicago workforce has quadrupled to 120 workers, prompting demand for more room, Ishbia said.
“It’s really hard to grow a business where people who are new aren’t embedded in the office,” Ishbia told the outlet.
Shore Capital’s need for more offices is a boon for its downtown landlord while other property owners struggle to fill their offices, and thus risk missing their mortgage payments. A growing number face looming deadlines to refinance properties, a tough sell while interest rates are rising and banks are leery of taking on more risk.
Before the Shore Capital expansion, the AmTrust-owned tower was nearly 80 percent leased, according to CoStar Group, a notch better than the average for downtown office buildings AmTrust promised to renovate the building’s lobby and tenant features in tandem with the Shore Capital expansion and lease extension.
Brokers Brad Serot and Ian Murphy of CBRE negotiated the lease expansion on behalf of Shore Capital. Melissa Rubenstein of JLL represented AmTrust.
AmTrust owns six large office properties in Chicago, including a 43-story tower at 30 North LaSalle Street, where the firm was hit late last year with a $186 million foreclosure lawsuit.
It also owns the mostly vacant former Bank of America building at 135 South LaSalle Street, for which AmTrust was in talks with its lender about surrendering the property rather than risk a likely lawsuit over a loan default.
That building was left off the list of AmTrust properties set to receive portions of the $100 million injection for renovations. It has been discussed as a candidate to get a public subsidy from the city to fund a conversion into apartments.
Read more
Residential
Chicago
Billionaire Justin Ishbia begins demolition for epic Winnetka estate
Residential
Chicago
Ishbia determined to complete lakefront assemblage in face of new obstacles
Residential
Chicago
Renovated $4.8M Winnetka mansion makes latest century-old high-end resi deal
Ishbia, recently in headlines for buying the Phoenix Suns with his brother Mat late last year for $4 billion, can whisk away unwanted real estate as easily as he can add offices. He and his wife, Kristen, have also been in the public eye for a controversial North Shore real estate project.
The couple bought four mansions in Winnetka for $40 million, then demolished three to construct a large estate, set to cost another $44 million. They then bought a $5.7 million home in Lincoln Park next to their existing mansion in the neighborhood, then razed it too, according to Crain’s. Worth an estimated $2.9 billion, they likely can afford the high cost of adding to their land holdings in one of Chicago’s wealthiest neighborhoods.
— Dana Bartholomew