Synchrony Financial has joined the ranks of companies testing the secondary office market in downtown Chicago.
The Connecticut-based financial services firm recently listed nearly 51,000 square feet for sublease across two floors in the 34-story office tower at 222 West Adams Street, Crain’s reported. The Loop office space, comprising floors 25 and 26 in The Franklin, is available through July 2030.
Tishman Speyer owns the building. Jeff Samaras and Melissa Rubenstein of Cushman & Wakefield are marketing the sublease.
It’s unclear why Synchrony is offloading the space, but its entry into the sublease market aligns with a trend of large companies reevaluating their office needs in response to shifts in workplace dynamics following the pandemic.
Vacancy rates continue to challenge landlords, but subleases have become increasingly popular for tenants who can skip the expense of customized buildouts and often grab rents that are below the primary market rate.
Tenants like Chicago Title Insurance, Blue Owl Capital, Kin Insurance and Willkie Farr & Gallagher have capitalized on subleasing opportunities recently.
As of September, the downtown office sublease inventory had dropped from a peak of over 8 million square feet earlier this year to 6.8 million, according to CBRE. This decline indicates some relief for landlords, although availability remains more than double the pre-pandemic level of 3.3 million square feet.
Market research firm Nielsen, insurance company Northwestern Mutual, and German financial services giant Allianz have all listed Chicago office space for sublease, with Allianz most recently marketing 73,200 square feet at 225 West Washington Street.
The Synchrony listing is one of at least 17 large downtown sublease spaces with lease expirations in 2030 or later, according to Transwestern.
Synchrony, a publicly traded company led by president and CEO Brian Doubles, reported third-quarter net earnings of $789 million, marking a 26 percent increase compared to the same period last year.
— Andrew Terrell
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