Vornado scores IPG lease at Merchandise Mart

Some Interpublic Group businesses are slashing Chicago office space with a move to Vornado Realty Trust’s landmark Merchandise Mart in a departure from an iconic Michigan Avenue skyscraper.

The advertising, marketing and public relations firm — considered one of the “big four” such companies — is nearing a deal to occupy between 70,000 and 80,000 square feet in the 25-story Merchandise Mart along the Chicago River, CoStar reported. If the deal closes as expected, IPG will relocate some employees from the 100-story former John Hancock Center on North Michigan Avenue.

JLL brokers Kyle Harding and Deanna Becker are representing IPG in lease negotiations, while Andrea Saewitz, Wendy Katz and Ben Cleveland of Stream Realty Partners represent the landlord, New York-based Vornado Realty Trust.

It’s the latest example of companies favoring newly built or recently renovated office space to overcome the remote-work era and attract workers back to the office. Thus, a slew of office landlords throughout Chicago have invested gobs of money to meet the growing demand for amenity-filled and updated buildings.

Securing a sizable lease would be a big win for Vornado, as it’s fresh off a major renovation of the 4.2-million-square-foot art deco building. About six years after putting $40 million into the property, the landlord spent another $60 million to add a 27,000-square-foot amenity and conferencing space, a so-called speakeasy lounge and a 23,500-square-foot fitness center, among other improvements.

The specific lease being negotiated by IPG pertains to its agencies, Golin and Weber Shandwick, relocating from approximately 140,000 square feet in the Michigan Avenue skyscraper. Notably, a larger office space in the former Hancock Center leased by IPG’s FCB Global is not part of this move, although that agency might consider a move in the coming years as its lease approaches expiration.

Despite uncertainties in the Chicago office leasing market, Vornado remains confident in the value of the Mart, which houses tenants including Conagra Brands and Motorola Mobility. At the end of the second quarter, the Mart was 80 percent occupied, outperforming the citywide average of about 76 percent.

— Quinn Donoghue

Read more

Chicago

GoHealth nearing 89K sf sublease in Merchandise Mart

Chicago

Chicago’s Merchandise Mart getting another renovation

Chicago

Downs and ups: Alight slashes footprint 90% in move to BMO Tower penthouse