In Chicago commercial real estate, a war for amenities is raging. And as developers invest liberally in their Loop properties — building out everything from yoga studios to swanky lobby lounges — a clear victor is emerging. Increasingly, other neighborhoods are waving white flags of surrender to the amenities-rich downtown Loop.
Still, though, the Loop isn’t always the first choice for your typical startup. The traditional glass-and-steel office buildings there don’t exactly scream: “disruptive innovator!” As such, many young companies, at least initially, seek the sex appeal of River North or the chic grit of Fulton Market.
“As startups mature and hire more people, they need more space and amenities than what a neighborhood like Fulton Market can typically offer,” said Brad Serot, Executive VP, CBRE, Chicago. “That shortage of amenities is a direct result of the lack of office space availability. For this reason, many such companies are migrating to the Loop.”
Serot points to the West and Central Loop. What those markets lack in urban swagger, they make up for in accommodations. Think larger floor plates, cost-effective rentals, spec suites and in-building amenities, including fitness centers, yoga studios, outdoor spaces, conference rooms and lounges. Check the box, too, for easy access to transportation — like the most conveniently located “L” stops in the city.
Companies like LinkedIn, Avant, Enova and Facebook have established offices in the West and Central Loop.
And Blackstone, owner of the Willis Tower, is investing $500 million to renovate its amenities and retail, making it one of the most expensive building makeovers in U.S. commercial real estate.
“It’s really amazing to see what some of these landlords are doing in the Loop — from top-of-the-line fitness facilities, to rooftop lounges, to full-service coffee houses. It’s a sign of the market conditions.” said Serot. “It's a good time to be a tenant there.”
Edovo, $2.16 million (March, 2017)
Maestro Health, $6 million (October, 2016)
CityBase, $6.25 million (July, 2016)
CareMerge, $14 million (July, 2016)
Signal, $30 million (June, 2016)
Vibes, $45,000,000 (June, 2106)
Sprout Social, $42,000,000 (February, 2016)
Civis Analytics, $22,000,000 (November, 2016)
Signal, $30,000,000 (June, 2016)
Companies to know
Procured Health, Label Insight, ParkWhiz, Inventables, Next Capital, Snapsheet, PowerReviews, SpotHero, Sprout Social
Word from the broker
“Building owners in the Loop are catering to startups by building out furnished spec suites. These 2,000- to 5,000-square-foot spaces require shorter leases. They’ll do a deal with a startup for three to five years, which is advantageous because those early stage companies don't want to sign a 10-year lease if they don't know what tomorrow will bring. So landlords in the Loop are creating what we call the ‘easy button’ for tenants.” — Brad Serot, CBRE
All CTA trains offer service into the Loop.
Union and Ogilvy Stations: Connects downtown Chicago to surrounding suburbs and much of the Midwest.
Bus Lines: To travel north or south to and from the Loop, these buses are frequently used: Clark, State, Broadway, Sheridan and Lasalle.
Forum Coworking, Onward Coworking, Make Offices, WeWork Fulton Market, Industrious
Best coffee spots
Revival Food Hall, Sawada Coffee, Groundswell Coffee Roasters, Nohea Cafe, Dollop Coffee Co.
Best Happy Hours
Slightly Toasted, Bin 36, Sepia, MAD Social, Green Street Local, Sidebar Grille, The Gage, Ceres Cafe
Additional reporting by Patrick Hechinger. Photo via stock.
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