Co-working provider Firmspace closed its downton office just a few days before Thanksgiving, leaving tenants scrambling for alternatives.
Austin-based Firmspace tried to renegotiate its 34,000-square-foot lease with its Chicago landlord Moceri + Roszak, the owner and developer of the property at 145 South Wells Street, but the two sides failed to reach an agreement, leading to the closure, Bisnow reported.
Firmspace purportedly made multiple attempts to restructure the lease that was more aligned with the current state of Chicago’s ailing office market, which has been plagued by remote-work trends and rising interest rates. However, Moceri + Roszak principal Michael Moceri was surprised by the abrupt closure, according to an email to tenants in the building.
Akin to fellow co-working space provider WeWork — which sought bankruptcy protection this month as it aims to restructure leases with landlords across the nation — Firmspace was harmed by the pandemic, which brought demand for office space down to an all-time low in the Windy City.
“We faced an uphill battle upon our opening in a city that was besieged by the virus and related lockdowns,” a Firmspace email obtained by the outlet said. “As time passed, it was clear that our experience in Chicago would diverge from that in our other cities.”
Moceri assured tenants that the landlord’s lawyers are engaging with Firmspace to minimize disruptions caused by the sudden closure.
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Last week, Firmspace removed Chicago from its list of locations, while Google marked the business as “permanently closed.” Moceri emphasized the firm’s commitment to resolving the situation and pledged transparency to tenants.
Firmspace, meanwhile, promised to return deposits promptly, giving tenants a few days to retrieve any remaining property from the now-shuttered office. The company opened its Chicago office in May 2021, occupying three floors of 145 South Wells.
The closure is a blow to Moceri + Roszak, as the Wells Street property marked its first office development.
— Quinn Donoghue