Now even the subtenants are searching for subtenants.
California-based AI company Invoca is seeking a new taker for its space at 120 South Riverside Plaza, after it entered into a sublease agreement on its 11th-floor office space with energy billionaire Michael Polsky’s firm, Invenergy.
The deal put Invenergy on the hook to pay out a few years of Invoca’s lease term — which ends in 2030 — at a discounted rate, according to a source familiar with the deal. However, Invenergy — a renewable energy and natural gas developer — only needed the West Loop office space temporarily as it closed on a deal last year to more than double its footprint at its headquarters in 601W’s One South Wacker, for a total of 226,000 square feet.
Competition is increasing for companies seeking to sublease downtown office space with tenants offering heavily discounted rates to lessen their real estate costs as they wait out lease terms. Subtenants like Invenergy often pay sublandords like Invoca “50 cents, 40 cents on the dollar” in taking over their leases, meaning Invoca will continue taking a loss on the space until its term runs out, according to the source.
Invenergy is on the hook at 120 South Riverside until June 2025 and is aiding in the search for a new tenant to sublease the space.
Commercial tenants sought to shed a collective 8 million square feet in downtown Chicago last year, a record high for the city that set it apart from other markets.
Earlier this month, Invenergy added another floor — 35,000 additional square feet — to its lease at the 40-story Wacker Drive building.
The new headquarters will be ready for employees to move in after the first quarter of next year, so Invenergy and its sublandlord Invoca have begun looking for tenants to fill the 11th floor at 120 South Riverside, according to a source familiar with the deal.
Both 120 South Riverside Plaza and 10 South Riverside Plaza — its sister building across Monroe Street — are owned by Canadian real estate investor and property manager Ivanhoé Cambridge.
As 120 South Riverside struggles with its occupancy, Ivanhoé has invested $75 million into renovating the building to reposition it within a difficult downtown office market. Renovations are set to be completed later this year, according to marketing materials.
Colliers International’s Kyle Hundelt has the listing for the 11th floor office sublease, which spans just over 37,000 square feet, according marketing materials shared by the broker. A spokesperson for Colliers declined to comment on the listing.
Editor’s note: This story has been updated to clarify details about the length of Invoca’s and Invenergy’s lease terms.
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