Zurich’s Schaumburg HQ to be 100% occupied with ADP sublease

Zurich North America is nearing a deal to sublease a significant portion of its Schaumburg headquarters, which would bring its headquarters building to fully leased. 

Payroll and human resources services provider ADP is in advanced talks to lease 150,000 square feet at 1299 Zurich Way, a move that would relocate ADP’s suburban workforce from its Elk Grove Village office, Crain’s reported. 

Zurich listed nearly half the 360,000-square-foot building’s office space on the market last summer. The 11-story Schaumburg office, completed in 2016, is one of the newest office properties in the Chicago suburbs, offering a slew of amenities. 

After securing a lease with fleet-management company Wheels for more than 200,000 square feet in the 783,000-square-foot building, Zurich was looking to strike a deal for the remaining space. The deal with ADP would fill the remaining space, completing Zurich’s sublease efforts.

The potential deal highlights a broader trend in the corporate real estate market, where companies are increasingly prioritizing newer, high-quality office spaces to entice employees back into the office. Zurich’s ability to attract major tenants to its Schaumburg headquarters underscores the appeal of modern office environments, even as the suburban office vacancy rate continues to climb.

ADP’s relocation comes a year after it sold its Elk Grove Village office, at 100 Northwest Point Boulevard, to Aligned Data Centers, which plans to redevelop the site. ADP also has a presence in downtown Chicago, in Willis Tower at 233 South Wacker Drive, and a smaller office in Deerfield, though it remains unclear how the Schaumburg move might impact those locations.

While Zurich’s subleasing success is a positive development for the company, it faces challenges on another front. The insurance giant is in a legal battle with the Village of Schaumburg over a tax incentive agreement tied to its headquarters.

Zurich, the U.S. arm of Swiss insurance giant Zurich Insurance Group, claims the village owes millions in property tax reimbursements, which hasn’t been paid because the village has disputed whether the headquarters has 1,700 employees, as required by their agreement. The company argued that the agreement only required employees to be assigned to the office, not necessarily present in person every day. 

— Andrew Terrell

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