Brookfield Signs Argo Group to Marshall Field Building

An insurance company is relocating to a renovated office building in downtown Chicago, although it won’t put a dent in the city’s record-high office vacancy rate.

Argo Group has signed a long-term lease to occupy about 20,500 square feet on the ninth floor of the Marshall Field building at 24 East Washington Street, which is owned by Brookfield Properties, Crain’s reported.

JLL brokers Jeff Miller and Corey Siegrist represented Argo in lease negotiations, while Telos Group’s Jack O’Brien and JD Parcheta represented Brookfield.

New York-based Argo will relocate early next year from 225 West Washington Street, where it occupies a little under 19,000 square feet. The decision aligns with the recent acquisition of Argo Group by Brookfield Reinsurance, a sister company of the Marshall Field building’s owner.

The lease sheds light on the surging demand for top-tier office space, or Class A buildings, as they give companies a fighting chance to overcome the remote-work movement and lure employees back to the office. While office vacancies are a widespread problem across the Windy City, Class A properties are performing considerably better than the rest of the pack, with move-ins outpacing move-outs over the past eight quarters, the outlet reported, citing CBRE data.

Brookfield completely renovated the 650,000-square-foot site in 2020. Despite having a relatively poor occupancy rate of 61 percent — well below the city average of 76 percent — the landmark Marshall Field building has seen an uptick in leasing activity.

Singapore-based Olam International recently signed an 80,000-square-foot lease at the site. Other tenants include Vivid Seats, Numerator, Spot and Ferrero North America.

Brookfield has handled some distress this year in the office and retail real estate markets. It defaulted on more than $1.1 billion in debt tied to its Los Angeles portfolio this past spring, opting to hand back the keys to lenders for the Gas Company Tower and EY Plaza. And it is facing distress on $1 billion tied to seven shopping malls.

But the Toronto-based company has been undeterred. Brookfield Asset Management launched a $15 billion fund in June.

—Quinn Donoghue