Workbox is in, WeWork is out of a Fulton Market building.
Coworking giant WeWork plans to maintain its Chicago locations, save for one in Fulton Market that competing coworking space provider Workbox will take over.
Chicago-based Workbox will occupy the 60,000-square-foot space at 220 North Green Street that WeWork plans to leave behind as it fights to climb out of bankruptcy, Crain’s reported.
WeWork filed for Chapter 11 bankruptcy protection last fall and disclosed plans to reject the Fulton Market lease in a court filing on May 17. The New York-based company has been working to renegotiate nearly all of its leases across the country and is nearing an exit from bankruptcy.
Even as Chicago deals with record-high office vacancies amid the remote-work era, Workbox’s takeover shows that there’s still demand for office space in the buzzing Fulton Market neighborhood. However, the submarket has still seen its fair share of downsizing and distress since the pandemic.
The Workbox lease also provides a crucial reprieve for the building’s owner, a venture of local venture capitalist Randy Rissman, who purchased the building in 2018 for nearly $43 million. Avoiding the challenge of leasing the building at a trying time for office landlords is a significant win for ownership.
This acquisition marks the second WeWork location that Workbox has taken over in Chicago in recent months. In January, Workbox moved into one of four floors WeWork vacated at The National, at 125 South Clark Street, in the Loop. The 220 North Green location, which Workbox CEO John Wallace expects to assume in June, will be the company’s first in Fulton Market, its sixth in Chicago and its 10th nationally.
“I’ve wanted to get exposure into Fulton Market since I started this business,” Wallace told the outlet. “It’s kind of the epicenter of those types of companies, so it’s a great strategic fit for us.”
While Wallace did not disclose the lease terms, he noted that Workbox was “opportunistic” in taking over the space. Unlike WeWork’s model of subleasing to office users after signing leases with landlords, Workbox typically engages in profit-sharing agreements with building owners. This model has become increasingly common, as it allows both coworking providers and landlords to share the risks associated with operating flexible workspaces.
WeWork’s closure of the Green Street location will reduce its Chicago presence to eight locations, following a series of shutdowns of what it termed “underperforming” sites. The company continues to operate a two-floor space at 167 North Green, which is in Fulton market near the closing space at 220 North Green.
—Quinn Donoghue
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