601W’s Aon Center, a huge East Loop officer tower on the rebound following a debt maturity extension that staved off a default by the landlord, has notched a win with a new 21,000-square-foot lease signed by the American Planning Association.
Although the Planning Association’s move means that nearby 205 North Michigan Avenue will be losing a tenant, the fact that the association isn’t downsizing is welcome news for the beleaguered Chicago office market.
The association, a professional organization for urban planners, took new space at the Aon Center that’s a similar size as its current office on the 12th floor of 205 North Michigan. The lease begins in July 2025.
The incoming lease also comes at an important time for the Aon Center after New York-based 601W narrowly dodged defaulting on a massive debt tied to the 83-floor tower at 200 East Randolph Street.
The Aon Center’s $532 million loan went into special servicing in February 2023, signaling looming financial distress at the property, but last July 601W negotiated a three-year extension of its commercial mortgage-backed securities debt through July 2026.
The American Planning Association is the second new tenant to ink a midsize lease with the Aon center in the past few months. Service Employees International Union Local 1 took 20,000 square feet on the 15th floor of the 2.8 million-square-foot building in April.
The relocation was an effort by the SEIU to downsize its office presence, much like many other companies and organizations have done since work-from-home policies took hold during and after the COVID-19 pandemic.
Last month, Health Care Service Corporation, the parent company of Blue Cross Blue Shield, hired Cushman & Wakefield brokers to find a taker for nearly 230,000 square feet across eight floors in the 54-story building at nearby 300 East Randolph Street
And last year, tech companies Salesforce and Meta put a combined 240,000 square feet onto Chicago’s sublease market.
In the latest Aon Center deal, CBRE brokers Mark Cassata, Bill Sheehy, James Stein, and Courtney Theo represented the planning association while Telos Group’s Jeff Dowdell and Jamey Dix, along with JLL’s Isabella Spinell, represented the Aon Center’s owner, 601W.
Meanwhile, at 205 North Michigan, owner Patrick Hotung has been sitting on an adjacent development site with no immediate plans to build. Hotung, chief executive of Main Place Liberty Group, paid $31 million for the adjacent 40,600 square foot site at 130 E. Lake Street in 2021. Bordering the Buffalo, New York-based firm’s two Michigan Avenue office towers, Hotung said at the time that he planned to keep the site’s hole-in-the-ground status to focus on his existing office tenants.
Hotung did not respond to requests for comment.
The site had previously been considered for a Mandarin Oriental Hotel and a 50-story skyscraper, prior to Hotung’s purchase.
Read more
Commercial
Chicago
601W’s East Loop trophy Aon Center tumbles 47% in value
Commercial
Chicago
New owner of failed Mandarin Oriental Hotel development will keep prime site vacant