Two companies are upping their office footprint in downtown Chicago, putting a dent in the city’s record high vacancy rate while flashing signs of life for an office sector that’s been pummeled by the pandemic.
German renewable energy firm RWE is expanding its occupancy from 28,557 square feet to nearly 57,000 square feet in the 47-story tower at 353 North Clark Street, CoStar reported. In addition, insurance brokerage Lockton will now lease 66,726 square feet in the 44-story building at 500 West Monroe Street, adding over 14,000 square feet to its previous lease.
CBRE brokers Jon Milonas and Brad Serot represented RWE in its deal, while CBRE’s Seth Tuscher and Michael Kazmierczak represented the landlord, Chicago-based Heitman.
In the other deal, Savills brokers Robert Sevim and Adam Southard represented Lockton; JLL’s Brad Despot and Annie Nicolau, along with Avison Young’s Danny Nikitas, negotiated the lease on behalf of San Francisco-based owner Spear Street Capital.
While Chicago’s office market is still struggling amid lingering remote-work trends, high interest rates and a tight lending climate, the recent lease expansions signal that a possible recovery is on the horizon.
Other companies are making similar moves. In July, Shore Capital Partners added 16,000 square feet to its footprint at 1 East Wacker Drive. Renewable energy and natural gas developer Invenergy is in talks to nearly double its 106,000-square-foot lease 1 South Wacker.
RWE’s expansion is part of a broader strategy, as it has plans for similar in Boston and Valhalla, New York. The Clark Street tower is 87 percent leased, well above the city average of roughly 77 percent.
Lockton’s decision to increase its occupancy is tied to Spear Street’s plan to upgrade amenities at the River North site, such as the conference and fitness centers, the outlet said. That building is also 87 percent leased.
—Quinn Donoghue
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