Office downsizing hits Tishman Speyer, Aegis assets as market adjusts

Chicago’s office market is feeling the pinch as more major firms downsize their spaces, contributing to record-high vacancy and challenging the stability of the central business district.

FTI Consulting is relocating from 70,000 square feet at 227 West Monroe Street to 55,000 square feet at 155 North Wacker Drive, Crain’s reported. 

Newmark’s Bill Rolander represented the John Buck Company, owner of the Wacker Drive tower, and Colliers’ David Burden represented FTI in lease negotiations. 

FTI’s exit is a challenge for landlord Tishman Speyer. Finding tenants for the 60-story, 1.5 million-square-foot West Monroe Street tower has been difficult in a market with abundant availability. However, Tishman is in a relatively strong position with no debt on the property and 92 percent occupancy, significantly higher than the downtown average occupancy of 75 percent. 

Meanwhile, CannonDesign, an architecture and engineering firm based in Buffalo, New York, has extended its lease at 225 North Michigan Avenue for 11 years but has reduced its space from 60,000 to 40,000 square feet. 

Transwestern’s Mark Buth represented Aegis Capital Management, owner of Michigan Plaza. CBRE’s Mark Cassata, Bill Sheehy, and Liz McLeary negotiated the extension on behalf of CannonDesign.

These lease adjustments are part of a broader trend affecting the Chicago office market, where similar downsizing moves have caused vacancies amid remote-work trends.

Downtown Chicago experienced record-high office vacancy for 13 of the past 15 quarters, with companies collectively cutting nearly 1.9 million square feet of office space in the past year, according to CBRE.

While some firms, like Invenergy and White & Case, have expanded their leases, others such as AECOM and Lessen have reduced their office footprints, negatively impacting the financial health of building owners and the vibrancy of the central business district.

— Andrew Terrell

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