Amazingly, another year has flown by. As 2018 comes to a close, it is time to look back on the year that was in downtown Chicago commercial real estate. While activity has generally held steady, there are some subtle signs that the market is slowing. Nevertheless, it was an interesting and active time with many notable storylines that could end up shaping the future of our city. Let’s now review the past 12 months with my top 10 list of events:
10. Motor Row, Start Your Engines! – Led by former Chicago Bears Israel Idonije and Julius Peppers’ planned redevelopment of 2222 South Michigan, along with the opening of several hotels, restaurants and live performance venues, Motor Row is finally starting to realize its vast potential. While there is still quite a bit of work to do, it is now not too hard to see the grand vision for this South Loop neighborhood coming alive at long last.
9. Bear Down, Wacker Drive – Speaking of the newly crowned NFC North Division Champions, the Chicago Bears opened an 11,000 square foot office at 123 North Wacker Drive. This is quite a significant deal for a prominent building undergoing a revitalization after a down period. The staff of 35 employees relocated from Soldier Field in order to free up space for more conferencing and special events at the renowned stadium.
8. The Gamble Pays Off– After rolling the dice and constructing a new high-rise on speculation with no anchor tenant, CA Office and White Oak Realty Partners’ gamble paid off nicely, as CDW inked a lease at 625 W. Adams St. for approximately 300,000 square feet. This brings the property all the way up to 68% leased.
7. Googleville – Let’s face it, if not for Google’s decision back in 2015 to relocate their Midwest headquarters to 1000 West Fulton Market, Fulton Market would not be what it is today. Not only did Google fill up the rest of the available space in this building, they also leased an additional 132,000 square feet at soon-to-be completed 210 North Carpenter, firmly establishing themselves as the anchor of this dynamic neighborhood.
6. Facebook Likes Chicago – Facebook’s expansion into 263,000 square feet at the newly constructed CNA Tower at 151 North Franklin is yet another example of how Chicago is gradually growing into a national tech powerhouse.
5. The Old Post Office Delivers – Walgreens and Ferrara Candy Company became the first tenants to commit to the Old Post Office. While only accounting for approximately 10% of this massive 2.8 million square foot structure, these leases, in conjunction with the many upgrades planned to this showcase structure, promise to serve as a catalyst for future success.
4. Stretch Those Boundaries – Lincoln Yards, The 78 in the South Loop, the Burnham Lakefront at the former Michael Reese Hospital site, and the River District at the Chicago Tribune printing plant location all represent momentous efforts by developers to expand the outer borders of the downtown market. While major questions remain on who exactly will occupy the space and how to get people to and from these places, it does create a new layer of competition for the traditional downtown areas.
3. Co-working More and More – From WeWork’s seemingly endless expansion, to growth by competitors such as Convene, Industrious, Spaces and several new entrants into the Chicago market, co-working is showing no signs at all of slowing down.
2. The Development Never Ends – The planned construction of Salesforce Tower Chicago at Wolf Point and BMO Tower at Union Station pile onto this extended development cycle. While the skyline will gain some beautiful new edifices anchored by top-notch tenants, more vacant space will be added to the market in not just these new properties but also in the buildings where these tenants are relocating from. Might this be the beginning of the end for this expansive market?
1. Amazon Snubs Chicago – Chicago made an admirable run and allegedly finished in the top 5, but ultimately fell just short as Crystal City, Va, Long Island, NY and Nashville, TN, ended up splitting the grand prize. While the pros outweighed the cons, on the bright side, we no longer have to hear about this story every 10 minutes. There you have it. In my next blog, I’ll let you know what I predict to be in store for 2019. Happy Holidays, everyone!