Citadel Downsizing from Namesake Chicago Tower to River North

A high-stakes game of office space reshuffling is unfolding at Chicago’s Citadel Center.

The hedge fund of billionaire Ken Griffin is negotiating to move its Chicago office from its namesake skyscraper at 131 South Dearborn Street to a significantly smaller space nearby, CoStar reported.

Citadel is in talks to lease about 55,000 square feet across two floors of the 45-story tower at 353 North Clark Street. This would further scale back the hedge fund’s presence in the city after it relocated its headquarters from Chicago to Miami in 2022.

Citadel previously occupied more than 500,000 square feet at the downtown tower but has since reduced its footprint to just over 300,000 square feet.

At the same time, Boston-based consulting firm Bain & Company is working on a deal to secure the top five floors of the 37-story Citadel Center, a move that would add 175,000 square feet to its footprint.

For the deal to move forward, the building’s owners, TPG Angelo Gordon, and Citadel must agree to a buyout of those floors. The buyout would allow Bain, headed by CEO and Managing Partner Christophe De Vusser to establish a direct long-term lease in the building.

Bain is represented by CBRE’s Todd Lippman, Citadel by JLL’s Matt Carolan, and the landlords by brokers from CBRE and Stream Realty Partners. If finalized, the agreement would be one of the largest leases in downtown Chicago in recent years

The downtown market is challenging for landlords, amid a fourth-quarter vacancy rate of 26.3 percent. Citadel’s exit would add to the empty space at the 1.65 million-square-foot Citadel Center, which is already over 23 percent vacant, according to CoStar data.

Meanwhile, the North Clark Street building, owned by Heitman, is dealing with a similar problem, as 24 percent of the tower’s space is unoccupied.

Citadel’s lease at the River North office tower would help fill space left vacant after real estate investment trust Ventas relocated to 300 North LaSalle Street, which is owned by the Irvine Company. The deal would also come as Mesirow, a longtime tenant of the building, downsized its space through a 10-year lease extension.

— Andrew Terrell