While JLL is busy helping other office landlords fill up their buildings, the firm aims to offload a chunk of its own space, adding to Chicago’s historically high amount of office vacancies.
The Chicago-based brokerage giant is putting more than 61,000 square feet up for sublease across the 47th and 48th floors in its Aon Center headquarters at 200 East Randolph Street, Crain’s reported. That’s about 30 percent of JLL’s footprint in the 83-story East Loop tower.
The firm, headed by CEO Christian Ulbrich, signed a 20-year lease extension in 2014. The Aon Center is owned by New York-based 601W, which recently neared a maturity default on its $678 million debt package tied to the building before receiving a four-year extension on the loan, which was previously scheduled to come due this summer. JLL is the third largest tenant at the site, behind Aon and tax-service company KPMG.
“Following a detailed analysis and feedback from JLL employees of how our Chicago headquarters at the Aon Center is being used, we identified opportunities to optimize our workspace and bring our teams closer together, which has resulted in a decision to sublease a portion of our office space,” a JLL spokesperson told the outlet.
The sublease listing is another blow to a beleaguered office sector that’s still reeling from the pandemic-driven remote-work era, among other market challenges like hiked interest rates and a tight lending climate. Chicago’s office vacancy rate rose to a record high of 22.6 percent last quarter, and the amount of available sublease space crept up to a record high of 8 million square feet.
A rough start to 2023 perhaps contributed to JLL’s decision to sublease. The firm reported a net loss of $9.2 million in the first quarter, down significantly from the same period last year when it netted $145.6 million in profit. The company’s leasing revenue also dropped 15 percent year-over-year in quarter one.
JLL brokers Mike Curran and Annie Nicolau are marketing the firm’s space, playing up the 546 workstations across the two floors to allow for seamless collaboration among employees.
Plus, the Aon Center isn’t on the brink of foreclosure like it was last month. 601W struck a deal with its lender to extend the loan maturity by four years before its July 1 deadline, and anchor tenant Aon extended the terms of its lease in the building.
— Quinn Donoghue
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