Federal Agency Nears 100K sf Lease in Chicago’s Loop

The U.S. General Services Administration is nearing a lease agreement for more than 100,000 square feet in Chicago’s Loop.

The move is a relocation for the U.S. Railroad Retirement Board, which oversees benefits for the nation’s railroad workers. The GSA manages federal properties and is negotiating the lease on behalf of the retirement board for space at the 23-story building at 231 South LaSalle Street. Crain’s reported that the agency is preparing to vacate its longtime headquarters at 844 North Rush Street. CoStar first reported the deal.

The Railroad Retirement Board currently occupies about 281,892 square feet at its Rush Street location — signaling a substantial reduction in the agency’s office space needs.

Boston-based Beacon Capital Partners owns the 1 million-square-foot property at 231 South LaSalle Street, which it acquired for $162 million in 2017. The landlord invested significantly in the 103-year-old building, adding a rooftop deck, a new lobby restaurant and renovated tenant lounges, according to Crain’s.

These capital improvements successfully attracted several high-profile tenants to the building in recent years. Software firm Relativity signed a long-term lease extension in 2023, while the city of Chicago Office of Inspector General secured a new lease in 2024.

Despite these recent developments, the LaSalle Street property remains 52 percent leased, according to CoStar Group data. The addition of the federal agency would fill a significant block of vacancy and provide a stable, long-term anchor for the historic building.

The relocation is part of a broader effort by the GSA to unload the William O. Lipinski Federal Building on Rush Street. The federal government has positioned the 15-story historic property as a leading candidate for conversion into residential units, according to the outlet.

The GSA issued a request for information in January to solicit bids from prospective buyers for the Rush Street building, following an unsuccessful attempt to sell the building in 2023.

Current plans suggest the Railroad Retirement Board will remain at the 844 North Rush Street office until June 2028. Other commercial tenants currently occupying the building are slated to remain in place until at least October 2027.

The ground-floor retail component of the Rush Street property includes luxury automotive showrooms for brands such as Bentley and Lamborghini.

— Eric Weilbacher