Posted 9 months ago in Trending
3 MIN READ – A historic Central Loop building just secured a new tenant, upgrading office space at 125 S. Clark. The move marks a trend of reverse ideology that landmark Loop offices are no longer attractive to office tenants.
Danny Ecker described the company’s downtown office move in the following excerpt from Crain’s Chicago Business:
“A few months after its largest tenant walked out, the owner of a landmark Loop office building has landed a deal with a new company that bucks a pair of trends in the battered downtown office market.
Total Quality Logistics signed a five-year lease for 36,322 square feet at 125 S. Clark St., according to a statement from real estate services firm Transwestern, which oversees leasing in the 20-story building. The move is an expansion by the third-party logistics company, which will move from roughly 31,000 square feet it occupies in the West Loop at 328 S. Jefferson St.
The deal stands out as a rare addition of workspace at a time when many companies are cutting back on it, given the rise of remote work that resulted from the COVID-19 pandemic. TQL is also going against the grain by moving from the trendy West Loop office submarket to the heart of the Loop, which has seen a slew of companies decamp from older buildings in favor of newer office properties elsewhere in the city.
The leasing victory comes at a critical moment for the owner of 125 S. Clark, a venture of German real estate investor Commerz Real AG. Co-working provider WeWork was the largest tenant in the building — which is now dubbed the National — but recently shuttered its four-floor, 112,000-square-foot location at the top of the property…
With TQL on board, the building is now 69% leased, according to Transwestern. That's down from 88% when Commerz Real bought the building in 2018 — mostly a result of WeWork's exit — and slightly below the 74% average for office buildings in the Loop midway through the year, according to data from brokerage CBRE.
“No other building in the Central Loop is attracting and retaining tenants like The National,” Transwestern Executive Vice President Eric Myers said in the statement. "Even in a struggling market, this building continues to get deals done partly due to its unmatched amenities and competitive pricing. These advantages set The National apart from other buildings in the Central Loop, allowing it to close large new deals that other buildings in the submarket simply cannot match.”
It's unclear what prompted TQL to expand and move to the Loop; a spokesman for the company did not respond to a request for comment. But third-party logistics providers have been a bright spot in an otherwise dreary downtown office market since 2020. Buoyed by demand for their services from companies trying to bolster their supply chains, tenants including Spot Logistics, Traffic Tech, Loadsmart and MoLo Solutions have belied the broader market by expanding their office space downtown over the past three years.”
