Energy billionaire Michael Polsky is upsizing his firm’s Wacker Drive headquarters, again diverging from prevailing office trends and handing a win to landlord 601W Cos.
Invenergy has added 35,000 square feet, adding a floor to its lease at One South Wacker Drive, Crain’s reported. The lease is a win for 601W, the New York-based developer that bought the building in 2018.
Just nine months ago, Invenergy added three floors, taking its total footprint to 226,000 square feet in the 40-story building, with the recent expansion coming on top of that.
The deals stand out in a low-demand office market. Downtown Chicago has lost nearly 1.9 million square feet of occupancy in the past year as companies continue to shrink their office space in favor of remote work. Invenergy’s growth stands out against that trend, which has driven office vacancy rates to record highs, according to CBRE.
Invenergy’s lease expansion last fall played a crucial role in allowing 601W to secure a three-year extension on $310 million in debt against the property; the loan was previously due at the end of last year. Many other landlords are struggling to refinance amid rising interest rates and weakened office demand, resulting in a wave of foreclosures and distress in the market.
The recent expansion included smaller spaces on the previously leased floors, the outlet reported. Invenergy’s growth reflects its rapid development and plans for the future, the firm’s president, Jim Murphy, told the outlet.
Founded in 2001 by Polsky, Invenergy develops, owns, and operates renewable and clean energy facilities globally. The company, which has added over 1,300 employees in five years and operates more than 200 clean energy projects across four continents, now has more than 950 employees based in Chicago.
Last year, Invenergy, alongside Blackstone Group and Canadian pension fund CDPQ, acquired a $1.5 billion renewable power portfolio from American Electric Power, marking its largest deal to date.
For 601W, Invenergy’s series of expansions is critical. Since the departure of consulting firm RSM in 2021, the landlord has been working to fill a significant vacancy. The extension agreement with lender Blackstone Group increased the loan amount to $356 million, opening up funds for leasing.
With Invenergy’s expansion, the Wacker Drive tower is about 80 percent leased.
CBRE’s Brad Serot and Bill Sheehy represented Invenergy in the expansion negotiations, while Nikki Kern and JD Parcheta of Telos Group represented 601W.
—Rachel Stone
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