A few blocks from the DeKoven Street site where the 1871 blaze that defined Chicago history began, a new hot streak is shaping part of the city’s future.
The southwest corner of the Loop, long an unproven spot for office users, is suddenly on fire: With more than $2 billion pouring into redevelopment projects at Willis Tower, the Old Main Post Office and Union Station, companies over the past seven months have inked more than 1 million square feet of new leases in mostly vacant and planned buildings near the South Branch of the Chicago River. And the area between the city’s tallest skyscraper and the Jane Byrne Interchange is still gaining traction, as Uber Technologies and Federal Home Loan Bank of Chicago are eyeing what could be another 575,000 square feet of offices at the Post Office, which is being turned into a modern office building.
The flock of new tenants and hefty investments are anchoring a breakout moment in a pocket of downtown that has labored to establish itself as a corporate destination while companies have gone elsewhere in the Loop, West Loop, River North and the Fulton Market District.
“This is a resurgence of that part of the Loop,” says Ari Klein a veteran tenant rep at Cushman & Wakefield. “What’s old is new again, and that’s really cool to see.”
Thousands of employees over the next few years will descend on the corridor, spurred by developer 601W’s $900 million Post Office overhaul, a 300,000-square-foot retail addition coming to the base of Willis Tower and Riverside Investment & Development’s planned renovation of the Union Station headhouse with a new 50-story tower next door anchored by BMO Harris Bank’s massive Chicago office. On top of all of that, developer Related Midwest’s $7 billion vision for the 78 could eventually transform 62 acres of vacant riverfront land a few blocks south into 13 million square feet of properties.
There’s still a steep climb ahead as southwest Loop landlords compete for tenants with other new towers and proposed megaprojects elsewhere in the city. The Post Office will have more than 1 million square feet still to lease even if the Uber and FHLB deals are finalized. And Riverside will be looking to fill another 1 million square feet beyond what BMO is taking at its namesake tower when it opens in 2022.
But the area has finally shed its no-man’s-land reputation, Klein says. With big, amenity-laden developments coming, “everything in that area gets a little more attractive.”