Another Chicago office user is scaling back its downtown footprint in the wake of evolving workforce needs, but the owner of 200 East Randolph Street will take the win.
Service Employees International Union Local 1 has leased 20,000 square feet on the 15th floor of the 83-story Aon Center, for which landlord 601W scored a loan extension last summer, CoStar reported.
JLL broker Jake Ehrenberg represented SEIU Local 1 in lease negotiations, while Telos Group’s Jeff Dowdell and Jamey Dix, along with JLL’s Isabella Spinell, represented 601W, which bought the 2.75 million-square-foot tower for $712 million, or $259 per square foot, in 2015.
SEIU, a labor union for a wide range of service workers, will relocate from 111 East Wacker Drive, where it occupies almost 29,000 square feet.
SEIU will join the plethora of firms that have trimmed their Chicago office footprint since the pandemic triggered the remote-work era. Such downsizings have contributed to record-high vacancies in 12 of the past 14 quarters, exceeding 25 percent for the first time ever in the first quarter, according to CBRE.
The lease comes less than a year after New York-based 601W negotiated a three-year extension of its $532 million commercial mortgage-backed securities loan through July 2026. The loan went into special servicing in February 2023, signaling potential foreclosure.
The landlord was hit with another challenge last year, when JLL put more than 61,000 square feet up for sublease across the 47th and 48th floors in the building.
Despite recent obstacles, the Aon Center is 84 percent leased. Tenants include Kraft Heinz, KPMG and the Blue Cross Blue Shield Association.
Built in 1973, the Aon Center is the fourth-tallest skyscraper in Chicago.
—Quinn Donoghue
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