Aviation Giant AAR Takes Big Chicago Merchandise Mart Lease

Aviation services heavyweight AAR Corp is making a rare big bet on downtown Chicago, signing a major lease at the Merchandise Mart that contrasts with the city’s shrinking office trend.

The Wood Dale-based firm inked a deal for 90,000 square feet at the Vornado Realty Trust-owned 3.7 million-square-foot riverfront property, located at 222 West Merchandise Mart Plaza, Crain’s reported.

The company will relocate from a smaller office at 321 North Clark Street, nearly tripling its downtown space. Stream Realty Partners’ Andrea Saewitz, Wendy Katz and Ben Cleveland oversee leasing at the Mart.

The deal extends a winning streak for the property, which has outperformed much of the market thanks to a $40 million amenities overhaul completed last year.

The upgrades have helped lure tenants including Medline Industries, Berlin Packaging, GrubHub, Kin Insurance and Chartis. The Mart is now 84 percent leased, compared with a downtown average of 72 percent, according to CBRE.

It’s a welcome development for landlords after years of remote work and corporate downsizing pushed the central business district’s vacancy rate to record highs.

AAR’s move comes amid a post-pandemic rebound for aviation services. The publicly traded company, which supplies aircraft parts and maintenance for airlines, has been ramping up hiring after a labor crunch that intensified as air travel demand surged back in 2022. AAR reported $2.8 billion in sales over the 12 months ending May 31, up 20 percent year-over-year.

What’s unclear is how the new office fits into AAR’s long-term plans. The company’s headquarters remains at its owned facility in Wood Dale, near O’Hare International Airport, and the suburb confirmed AAR renewed its business license through 2026.

Many suburban companies have spent the past decade migrating to downtown in pursuit of younger, urban talent, though few have expanded as aggressively as AAR in the current market.

— Eric Weilbacher