More Loop Tenants Shy Away From Offices With Subleases

PayPal and Omnicom Group are the latest companies to add to the Chicago Loop’s growing pile of sublease space.

The fintech company and the marketing communications firm recently put a combined 122,000 square feet of downtown office space up for sublease, according to a report from Transwestern.

That’s in addition to the combined 240,000 square feet put up for sublease back in the spring by tech giants Salesforce and Meta, as well as direct lender Golub Capital’s listing for about 76,000 square feet.

PayPal is downsizing at Merchandise Mart, where it’s listing almost 54,000 square feet. Meanwhile, Omnicom Group is shedding about 69,000 square feet at 225 North Michigan Avenue, following in the footsteps of fellow marketing industry player Publicis Groupe. The latter listed 350,000 square feet of office space at 35 West Wacker Drive earlier this year, marking the city’s largest sublease offering. PayPal and Omnicom didn’t respond to requests for comment.

The amount of sublease space being added to the market is outpacing leasing, with a record-high of more than 8 million square feet available as tenants adapt their office space needs to continued hybrid and remote work trends, Transwestern found.

A little more than 226,000 square feet of sublease space has been leased on secondhand deals so far in 2023, compared to the 1.4 million square feet that has been added to the market so far this year, according to the report.

West Loop is the submarket with the most sublease space, at about 40 percent of the total on the market, or more than 3.2 million square feet, per Transwestern. The Central Loop has about 21 percent of the available sublease space, at about 1.7 million square feet.

Several companies, including Cars.com, ArentFox Schiff and YMCA of USA, took large blocks of available sublease space off the market after failing to draw any takers.