What started out as 4-5 people in the open space has grown to increasingly more cramped quarters. Employees who don’t have enough space to work efficiently may find themselves distracted, disengaged, and less excited to come into the office.
What started out as 4-5 people in the open space has grown to increasingly more cramped quarters. Employees who don’t have enough space to work efficiently may find themselves distracted, disengaged, and less excited to come into the office.
Finding new office space is rarely described as an entirely enjoyable activity. It can start out fun–it’s a chance to see what kinds of different spaces are out there–but can often turn in to an overwhelming, time-consuming process.
How does the whole search usually go? We put together some song titles that (we think) describe it from start to finish; beginning with the decision of whether or not you want to move, all the way to the feeling of relief when you find what you’re looking for.
If anything, it makes a pretty good work playlist.
Here’s how the story goes:
Something has to change; your office space just isn’t working anymore. Could you make it through with a simple reconfiguration or is it time to see what options are out there?
Should I Stay Or Should I Go? – The Clash
Can we really be coming up on the 15 year anniversary of the September 11, 2001 terrorist attacks? It still seems so fresh in my mind, almost like it was yesterday. While many Chicagoans (especially me) are looking forward to the start of another Bears season on Sunday, I feel compelled to take a moment to reflect on that horrific day.
Many of us remember exactly where we were and what we were doing when we found out what had happened. The day started out like any other Tuesday…
My morning ritual was to arrive at my 100 West Monroe office at 7:00 AM sharp, flip my radio onto WCKG-FM to listen to the Howard Stern Show and feverously try to get caught up on my work and prepare for the upcoming day. Howard was in the middle of a riveting conversation with his staff about Pamela Anderson when he suddenly switched gears and mentioned that an airplane had crashed into the World Trade Center in New York. The immediate reaction was that this had to be some kind of small, single engine plane being operated by a one man pilot who somehow got off course. When the building engineer came into my office and shed more light on the situation, I was completely stunned. The internet was still in the early days of streaming but I was able to get a live feed on CNN.com to watch the events unfold. As my colleagues came into the office, we all sat in front of my monitor in utter shock as the second plane hit, followed by the Pentagon and then the towers collapsing.
Meanwhile in Chicago, the rumors immediately ran out of control. Planes were believed to be heading towards several downtown buildings; one person who I knew in the then Sears Tower was told by a member of the building staff that some type of attack was imminent and everyone needed to evacuate post haste.
When I finally departed from my office around 2:00 PM, it was an absolute ghost town outside. I had never seen downtown Chicago so empty in the middle of a work day. The few individuals who remained walked around with blank looks on their faces. My only moment of levity came as I started walking towards my bus stop and a police car driving down Clark Street (the only car on the street at that time) pulled up next to me. A loud voice came over the speaker and told me to step slowly towards the vehicle with my hands up. When the window rolled down, it turned out to be a good friend from high school. He told me that everything was safe and secure in Chicago, which might have been the only good news of the day.
Like most Americans, the next few days were filled with a combination of sadness, fear and rage. Most businesses stayed closed and no one really felt much like working. Before that day, whenever I would hear news of a terror attack in the Middle East or somewhere else around the world, I thought that it could never occur in America. September 11, 2001 marked the end of our innocence. Life for everyone changed forever.
I have made numerous trips to New York since 2001 and every single time, I have felt compelled to visit the World Trade Center site, museum, tribute center, and the memorial. It is almost like reliving that day over and over again. I cannot explain why, but something continues to draw me there. It could be because I work in real estate; maybe it is because I could envision myself working in a building just like one of the Twin Towers; perhaps there was a victim I was destined to meet but would never get the opportunity.
Each time I have gone back, I have seen more life breathed into the city. Today, beautiful new buildings have risen up and Lower Manhattan is bursting with activity again. It is as though New York and America have made it back and better than ever. As much as I love Chicago architecture, I have to say that the new One World Trade Center tower that symbolically rises 1,776 feet into the sky, is one of the most magnificent and commanding edifices ever created.
This Sunday, as we huddle in front of the TV for a far different reason than we did 15 years ago, let’s take a moment to remember our blessings on the anniversary of the day we will never forget.
Not a day goes by without someone asking me the question, how is the leasing market?
The short, easy answer: it’s a matter of perspective.
Presently, it is quite good if you are a landlord. There is as much activity as I can ever remember and rents are at all time highs. The rapid expansion of tech businesses, rise of co-working space, continued suburban migration downtown and a generally strong economy have contributed substantially to this growth.
Determining whether it is a tenant or a landlord market is relatively simple. However, that question is often followed up with another, more difficult question: how much longer will this last? If I possessed superhuman powers to see into the future, I would be in Las Vegas right now, sliding large stacks of blue, green, and black chips across a green felt poker table.
While I work on those superhuman powers, the best thing I can do to predict how long this market will last is to look at past trends and signs of change.
One telltale sign of what might lie ahead is the concept of shadow space. Shadow space is defined as blocks of currently leased space that will be vacated upon lease expiration and are actively being marketed. The speed in which shadow space leases is a genuine indicator of market strength. If it leases quickly, that is a sign of the landlord market being here to stay but if the spaces sit empty for a while, it is an indicator that we are returning to equilibrium or potentially shifting back to a tenant market.
Currently, there are approximately 6 million square feet of shadow space on the market in downtown Chicago. 333 South Wabash takes the title for the most shadow space with 759,000 square feet, due to CNA’s planned relocation to 151 North Franklin in 2018 where they will be downsizing to 275,000 square feet.
Trailing Big Red is The Franklin complex at 222 West Adams/227 West Monroe, which will have 442,000 square feet of shadow space in play when McDermott, Will & Emory head to 444 West Lake and William Blair to 150 North Riverside. Hyatt is heading there as well, leaving their namesake tower at 71 South Wacker after only 12 years.
Though the spaces being vacated are spectacular in their own right, the truth is that it is difficult to compete with new construction. The new space is often more efficiently designed, thereby enabling tenants to lease less square footage and in the process, save money.
Because of companies like CNA and William Blair that take part in the “out with the old and in with the new” school of thought, old buildings, even with their added shiny amenity packages, are often left behind for new development: the factor most responsible for creating shadow space.
For example, two of the office towers presently under construction, 444 West Lake and 150 North Riverside, are coming out of the ground nearly 80% occupied with tenants relocating from A class buildings nearby.
Collectively, these new towers demonstrate the strength of the market and how much pent up demand there has been for new buildings; so much demand that while multiple towers are still on their way up, developers are actively pushing several other sites for new buildings. As more are built, shadow space will continue to increase and tenants may see the market turn in their favor.
Future deal terms negotiated by many tenants will be directly influenced by the speed in which the shadow space leases, as will owners deciding whether or not to sell, and developers determining whether or not to proceed with new construction. And so the cycle goes.
There’s the long answer.
My prediction for what’s to come? All I know is that it promises to be a wild ride as we witness the latest chapter in downtown Chicago real estate.