Tishman Speyer’s building in Chicago’s Fulton Market extended its leasing hot streak Tuesday, showing the former meatpacking district is still the lone bright spot for Chicago’s otherwise struggling office market.
The landlord for the 13-story office building at 320 North Sangamon Street landed insurance software provider Applied Systems for a 10,000-square-foot lease, the University Park-based company’s first downtown Chicago office, the Chicago Business Journal first reported.
Applied provides insurance agency and brokerage technology and serves clients in the U.S., Canada, Ireland and the U.K., and will open the office in July, according to a Tishman statement on the lease.
“Our new downtown Chicago location puts us in a strong position to recruit top talent in the heart of Fulton Market’s growing tech hub,” Applied CEO Taylor Rhodes said in a statement. “We see this as a great opportunity to increase our involvement with the global tech community, support strategic customer initiatives and provide a central location to bring our customers, partners and employees together.”
It will join biotech startup Hazel Technologies, which signed a 50,000-square-foot lease in September, and restaurant technology company Tock, which also occupies 50,000 square feet, as well as VTS, a real estate technology company that last week signed a lease for 36,000 square feet at the Tishman building, which totals 270,000.
Tishman co-developed the property with Chicago-based Mark Goodman & Associates and it was completed last year, after landing an $81 million loan for the project in 2020, The Real Deal reported.
Fulton Market was the city’s only neighborhood where Class A office availability dropped last year, to 23.1 percent, as the rest of the downtown office market suffered from the pandemic.
Strong demand in Fulton Market pushed up the average sale price per square foot to $678 last year, compared with the central business district’s $431, The Real Deal reported.
The central business district and the overall Chicago-area office market saw vacancies decline between the third and fourth quarter last year, and that momentum dissipated with the start of 2022. So far this year, sublease offerings in the CBD increased to just edge last year’s record amount of 5.8 million square feet available on the secondary market to set a new high closer to 5.9 million, according to The Real Deal.
Fulton Market, meanwhile, remains attractive to tenants looking for amenity-rich buildings – Tishman’s has a penthouse available for year-round use by workers, a wellness center on site and ground-floor retail. Their choices to settle in Fulton Market show tenants are still willing to grow their office footprints and lease directly from building owners, even with loads of vacancies in the CBD and more options than ever on its secondary market, products of other downtown Chicago businesses shrinking their physical space amid remote work’s pandemic-fueled rise.
“Applied’s commitment to this building is indicative of the desire among the region’s most innovative companies to put their customers and workforce in environments that spark innovation, productivity and collaboration,” Tishman Speyer Senior Managing Director Ryan Botjer said in a statement.
He told the CBJ the building is 78% leased.
Applied was represented lease negotiations by Cushman & Wakefield brokers Steve Bauer, Adrian Boone and Chad Koenig, while Tishman was represented by its own Adam Mitchell, Ellen May and Olivia Parker, the landlord said. Attempts to reach the brokers for comment were unsuccessful.
[CBJ] – Sam Lounsberry