While thousands of square feet are leaving the Central Loop, one building is standing out and dominating
A number of banks and law firms have relocated out of the Central Loop in the past two years, and another 1.5 million scheduled to vacate by 2024. Aside, a handful of vintage buildings have repositioned into creative office and have kept the submarket . For example, the $91 million dollar investment into The National, which included the addition of a tenant lounge, 7,000 SF fitness center and Chicago’s first food hall—Revival is now a case study for success, as those efforts have resulted in over 500,000 square feet, 88% leased since repositioning.
What does it mean?
The National proves as an example of how these older Central Loop buildings can compete with the new office product being built elsewhere. It also shows how focusing creative and innovative space design and amenity heavy additions will attract both tenants and investors alike. The National recently sold for $196.6 million or $340 PSF which is an increase of 60% from the total spend of $119 million ($28 million sale price in 2014 + $91 million investment).
Look for similar vintage office product to follow their lead or potentially convert to multifamily in the coming years.
Source: JLL Research