Tech company CDW wants to move on from a massive chunk of suburban office space, a move unwelcome by landlords already contending with record high office vacancy in the Chicago area and growing competition from tenants offering up their own spaces on the secondhand market at a discount.
The technology parts provider led by Christine A. Leahy is looking to sublease 200,000 square feet at the Tri-State International Office Center in Lincolnshire, marking the second-largest sublease listing on the market in the suburbs, Crain’s reported.
A venture of BA Investment Advisors, the investment arm of Chicago-based commercial brokerage Bradford Allen, has owned the five-building complex since 2017, when it fetched about $75 million in the landlord’s acquisition.
CDW, which leases more than 209,000 square feet in the buildings near Interstate 94, has hired JLL to find a taker on the market for secondhand office space, in which the occupant rents it from the business that was originally the tenant instead of the landlord, usually at a discounted rate from direct leases. The company’s lease runs through January 2028.
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The listing is the latest sign of an office sector that’s still getting beaten down by the pandemic-fueled remote work movement. Suburban Chicago’s vacancy rate soared to 29 percent last quarter, an all-time high. After years of poor performance, some office properties are on the brink of foreclosure or being redeveloped for industrial use, like the former Allstate campus in Glenview.
The only sublease listing larger than CDW’s is being marketed by Zurich North America. Last month, the insurance company hired JLL to market roughly 360,000 square feet at its 783,800-square-foot office building in Schaumburg.
It’s unclear what prompted CDW to list 95 percent of its footprint, but the company recently underwent a round of layoffs — another trend in tech that’s been a major contributor to the fallout in office demand in the Chicago area and beyond. The company is also dealing with a sales slump and is looking to cut costs where it can, the outlet reported.
— Quinn Donoghue