Blue Owl Capital Expands Chicago Office Footprint

Blue Owl Capital is set to increase its footprint in Chicago’s downtown office market.

The New York-based investment firm, led by Doug Ostrover, has secured a sublease for over 27,000 square feet on the 37th floor of 150 North Riverside Plaza, Crain’s reported. The firm will move from its location at 30 North LaSalle Street, where it occupies about 12,000 square feet.

The firm will assume the remaining eight years of a lease originally held by investment bank William Blair. The move is contrary to the trend of companies downsizing their office spaces due to the rise in remote work.

But it is on track with the “flight-to-quality” trend, as Blue Owl is opting for a more modern workspace.

Chicago’s office market is facing record high vacancy rates, as 25.8 percent of the market’s office space sits empty, according to CBRE. Vacancy is most acute among older Class B buildings, while newer Class A properties are seeing slight decreases in vacancy.

Blue Owl’s growth in Chicago follows a series of high-profile real estate investments, including its $950 million acquisition of Oak Street Real Estate Capital and its $200 million purchase of the Chicago Tribune Freedom Center.

Those investments significantly expanded Blue Owl’s real estate holdings. Its portfolio grew from $12 billion to over $28 billion in value.

The building that Blue Owl is vacating, 30 North LaSalle, is undergoing a major transformation. Developer Golub and lender Corebridge Financial are spearheading a $135 million redevelopment to convert the building’s lower floors into 349 residential units. That project is supported by $57 million in tax-increment financing from the city.

— Andrew Terrell