Jenner & Block, a Chicago law firm, is expected to sign a new lease with its landlord Heitman, reducing its current space, as the two companies settle a dispute over unpaid office rent at 353 North Clark Street.
The firm is in advanced talks to sign a new long-term lease in the 46-story tower where it has been since 2009 for around 225,000 square feet, less than half of the space it is currently leasing in the tower, according to Crain’s. Jenner’s current lease ends in March 2024.
The news comes on the heels of Jenner and Hart 353 North Clark LLC, an affiliate of Chicago investment firm Heitman LLC, informing Cook County Circuit Judge Thursday that they reached a confidential settlement agreement and would pay for their own attorneys and costs.
“Heitman is pleased to have Jenner & Block, an AmLaw 100 law firm that has been part of Chicago’s community for more than 100 years, as an anchor tenant at 353 North Clark for the foreseeable future, and Jenner & Block is pleased to continue to base its Chicago headquarters in one of Chicago’s most well-designed and professionally operated buildings,” the joint statement from Jenner and Heitman said.
Heitman sued Jenner in May 2020 alleging that the firm was more than $3.7 million behind on its April and May 2020 rent. Jenner filed its counter complaint the following month, claiming it owes $840,000 because the lease gives the firm abatement to cover any unforeseen event such as a pandemic and that nearly 90 percent of its space cannot be used because of the stay-at-home executive order.
The court action was one of the first major suits over unpaid rent in Chicago’s downtown office market as stay-home executive orders were made in the beginning of the pandemic. Downtown office vacancy rates are on a rising trend as companies downsize office space or exit leases entirely. Vacancy rate hit a record 19.4 percent in the second quarter this year and the emergence of the Delta strain of Covid-19 could lead to further cuts of office-space needs.
[Crain’s] — Connie Kim