New York developer Tishman Speyer scrapped plans to develop an office tower near Chicago’s buzzing Fulton Market as rates rise and concern builds that the nation is headed for recession.
The firm, Chicago’s second-biggest office landlord, terminated a deal to buy 850 West Washington Boulevard, home to a parking lot and car wash that Tishman Speyer planned to replace with a tower, CoStar reported, citing Cook County property records. Tishman Speyer didn’t respond to a request from The Real Deal for comment.
The records show that Tishman Speyer agreed in December to buy the site from Chicago parking company Park One, which bought the 37,200-square-foot site in 2018 for $14 million, the outlet reported. Since then, rates have steadily moved higher, inflation has accelerated and concern is rising that the nation faces a recession. Tishman Speyer ended the agreement on May 31.
While Fulton Market is a top destination for offices and is the fastest growing urban office market in the U.S., higher borrowing and construction costs have halted or slowed some transactions.
The scrapped site is just a few blocks away from a Tishman Speyer-owned 13-story building in Fulton Market. It’s been one of Chicago’s most successful office buildings and signed a series of leases even as other downtown offices emptied during the pandemic. It opened last year and is more than 85 percent leased, according to CoStar data. The project at 320 North Sangamon St., developed by Tishman and Mark Goodman & Associates, recently landed a $26 million loan.
Tishman Speyer also owns The Franklin and CME Center, a pair of large two-tower office complexes in downtown Chicago. It owns more than 7.2 million square feet of Chicago office space across eight properties.
Read more
Commercial
Chicago
Fulton Market building on pandemic leasing streak lands $26M loan
Commercial
New York
Rob Speyer on the long arc of megadevelopment, New York’s renaissance and proptech bets
[CoStar] – Rachel Herzog