Sprout Social looking to sublease half of Loop office
The offering adds to the cascade of new sublease listings from companies embracing the rise of remote work during the COVID-19 pandemic, a trend that has wreaked havoc for office landlords by driving up downtown office vacancy to an all-time high. There is now almost 6.9 million square feet of office space available for sublease downtown, 112% more than there was when the public health crisis began, according to real estate services company CBRE.
Online consumer lender OppFi, digital banking tech company Amount and staffing firm TrueBlue are among the companies that have recently padded that total. Now Sprout is adding to the inventory as it embraces many of its 500-plus local employees working remotely, at least part of the time.
“Our offices continue to be a hub for employees to meet and work for those that choose to do so,” Sprout Social Senior Vice President of Operations Rachael Pfenning said in a statement. “Given our hybrid workforce and our massive office footprint, we saw an opportunity to focus our office presence on our main floor. . . .We are committed to creating community and engagement around our offices where the bulk of our team still resides. We also see a ton of value with in-person connection and will continue to prioritize opportunities that bring our distributed teams together—a lot of which will be around our Chicago office.”
One reason many companies are putting some or all of their space up for sublease is that they’re finding takers. In addition to offering bargain rents, subleases have been popular among prospective tenants that don’t want to navigate soaring construction costs to build out new offices from scratch.
Two such deals were recently inked: Lender Twin Brook Capital Partners doubled its office footprint at 111 S. Wacker Drive by subleasing the floor below its office from Axis Capital, and Logistics company TransLoop subleased a 17,000-square-foot office at 1 S. Wacker Drive that cryptocurrency exchange Gemini never moved into after building it out.
Sprout’s space on the eighth floor at 131 S. Dearborn St. includes 368 workstations, nine private offices and 23 rooms for conferences or group meetings, according to the flyer.
The glassy building at Dearborn and Adams streets is best known today for its largest tenant, hedge fund Citadel, which drew headlines over the summer when CEO Ken Griffin announced he would move the company’s headquarters to Miami. A Citadel spokesman said at the time that the move would not change the company’s plans for its physical office presence in the Loop, though Citadel exercised an option earlier this year to cut roughly one-third of its 500,000 square feet in the building, according to a source familiar with the property.
The tower is owned by a joint venture of New York-based investment firm Angelo Gordon and Houston-based developer Hines.
Sprout, which makes software that major corporations use to manage their social media accounts, ranked 28th on Crain’s most recent list of the area’s 50 fastest-growing companies. The company reported nearly $188 million in revenue last year.
Founded in 2010, Sprout went public in 2019 with shares initially trading at just under $17 apiece and saw its stock price peak at more than $144 per share in September 2021. Shares dipped late last year and have been flat through much of 2022, opening this morning at just under $59 apiece.
CBRE Vice Chairman Paul Reaumond and Associate Tyler Reaumond are marketing the eighth floor in the building on behalf of Sprout.
