Irvine Scores Law Firm’s 30K sf Lease at Wacker Drive Tower
A law firm is upping its office footprint in an Irvine Company-owned downtown Chicago skyscraper, a rare move given that most companies these days are slashing their commercial real estate footprints amid persistent remote-work trends.
Gordon Rees Scully Mansukhani has signed a 10-year lease to occupy roughly 30,000 square feet in the 51-story tower at 1 North Wacker Drive, Crain’s reported. GRSM will relocate to the building’s 16th floor next summer when its 24,000-square-foot lease at 1 North Franklin Street expires.
The deal adds another tally to the win column for California-based Irvine, which has owned the Wacker Drive building since 2015. The 1.4 million-square-foot tower has an occupancy rate of about 90 percent, well above the city average of nearly 76 percent. Plus, cloud communications company Sinch recently made a 33,000-square-foot commitment to the property.
At 1 North Franklin, meanwhile, GRSM’s departure spells trouble for its landlord, a venture of the New York State Common Retirement Fund. The building’s namesake tenant, PNC Financial Services, is in talks to lease 80,000 square feet in John Buck’s building at 155 North Wacker Drive, which would mark a significant downsize from its current 116,000-square-foot space. The loss of PNC would drop the Franklin Street property’s vacancy rate to below 65 percent.
The GRSM deal contrasts with the widespread downsizing of office space in Chicagoland as companies adapt to the remote-work movement. Rising interest rates and tougher lending standards have only made matters worse for office landlords, triggering a wave of distress that’s rippling through the city.
Some of the most dramatic downsizings this year include tech company Alight Solutions’ 90 percent reduction in space in a move from the north suburbs to the BMO Tower at 320 South Canal Street. Also in the tech realm, Salesforce and Meta shed a combined 240,000 square feet of office space in March.
However, there have been a few recent lease expansions for Chicago’s office sector to hang its hat on. In September, German renewable energy firm RWE increased its footprint from nearly 29,000 square feet to around 57,000 in the 47-story tower at 353 North Clark Street, while insurance brokerage Lockton added more than 14,000 square feet to its previous lease at 500 West Monroe Street.
— Quinn Donoghue
