Law firm ditching Wacker Drive for River North office tower
Honigman will relocate from 28K sf space for similar size office at 321 N. Clark
A joint venture of real estate heavyweights that owns a River North office tower reeled in a new lease from a law firm Honigman that’s set to leave a hole on Wacker Drive.
The Detroit-based law firm agreed to occupy 27,000 square feet at 321 North Clark Street, Crain’s reported. The law firm will relocate next year from its current office at 155 North Wacker Drive, where it leases 28,000 square feet.
It’s a move that solidifies Honigman’s status as a stable downtown Chicago office tenant at a time when many others are slashing loads of space, leaving landlords with big holes to fill amid record-high office vacancy of around 24 percent.
The 35-story Clark Street tower is owned by a joint venture of Houston-based developer Hines, Los Angeles-based American Realty Advisors and Chicago-based Diversified Real Estate Capital, which bought the property for $340 million in 2016. The venture performed an $85 million renovation of the site three years later and secured a $296 million refinancing deal in 2021.
While the lease marks a slight downsize for Honigman, it’s an overall win for downtown Chicago landlords amid the pandemic-fueled remote work era that has many companies cutting back on real estate. Molson Coors, for instance, reduced its Chicago footprint by 97,000 square feet in April, with plans to relocate from 250 South Wacker Drive to the 52-story BMO Tower at 320 South Canal Street.
To make matters worse for Chicago’s struggling office sector, the remote-work movement has been compounded by rising interest rates and wary lenders that have made it tough for landlords to refinance their assets.
Honigman chose the 897,000-square-foot Clark Street building due to its upgraded lobby, new tenant amenities and accessible location, the outlet reported. The firm aims to build its new office from scratch, emphasizing flexibility and collaboration to align with its hybrid-work policy. Honigman is negotiating a lease for over 10 years, with options to extend.
The property is 80 percent leased, down from 96 percent when the owners acquired it. Its largest tenants include the American Bar Association and law firm Foley & Lardner.
— Quinn Donoghue