Another company is slashing its office footprint in a move to an upgraded building, adding to the overstock of vacant space in Chicago while tallying a win for a Wacker Drive landlord.
PNC Financial Services is nearing a deal to lease 80,000 square feet in developer John Buck’s building at 155 North Wacker Drive, Crain’s reported. That’s about 30 percent less space than the 116,000 square feet PNC occupies in its namesake tower at 1 North Franklin Street, where it’s operated since 2011.
The leasing deal has not yet been finalized and it could still fall through. If completed, though, the Pittsburgh-based bank would join a long list of companies that have downsized their real estate consumption since the pandemic hit, igniting the remote-work era and contributing to record-high office vacancies in Chicago.
The PNC move would be a big win for Buck, as the prominent local developer looks to overcome departures from two of the building’s largest tenants. Law firm Skadden, Arps, Slate, Meagher & Flom is ditching its nearly 170,000-square-foot space for a smaller footprint in the BMO Tower, and health care consulting firm Vizient signed a lease in 2021 to relocate to the redeveloped Old Post Office.
Buck completed the 1.2 million-square-foot building in 2009. While the developer is busy trying to fill voids in the building, 155 North Wacker is still performing relatively well, with an occupancy rate of 92 percent. That’s far better than the city average of 77 percent.
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The landlord at 1 North Franklin, meanwhile, could have a problem on its hands if PNC hits the exit. A venture of the New York State Common Retirement Fund — the majority owner of the 617,000-square-foot PNC Centre — would see the building’s occupancy rate drop from 81 to 65 percent if PNC takes the Wacker Drive lease. The retirement fund venture acquired the tower in 2015 with the help of a $94 million loan from Wells Fargo.
Office downsizings don’t appear to be slowing down in the Windy City. Tech company Alight Solutions recently slashed its footprint by 90 percent in a move from the suburbs to the BMO Tower. And earlier this week, Chicago-based JLL began marketing a sublease to help the brokerage trim its space by up to 30 percent in the 83-story Aon Center tower at 200 East Randolph Street.
— Quinn Donoghue