Crains Chicago Business reports that McDonald’s corporate HQ is bugging out from its sprawling suburban Oakbrook, IL campus back to a locale it once called home — downtown Chicago. The reasons seem to stem from the classic reverse-migration of white collar workforces from suburban enclaves to metropolitan districts. Beyond that, the fast-foot behemoth’s business woes might play a role in the decision as well. From the Ryan Ori and Peter Frost piece in Crain’s:
McDonald’s is in advanced negotiations with Sterling Bay to move its headquarters to well over 300,000 square feet in a structure the Chicago developer plans to build on Randolph Street, according to people familiar with the deal.
The office development is planned on Oprah Winfrey’s former Harpo Studios campus, which Sterling Bay bought for $30.5 million in 2014.
The deal comes about nine months after McDonald’s backed out in the final stages of a deal for more than 350,000 square feet at One Prudential Plaza near Millennium Park.
McDonald’s is believed to have considered several existing office buildings as well as potential new projects before settling on Sterling Bay’s redevelopment west of the Loop and the Kennedy Expressway in the northwestern edge of the West Loop.
After former Harpo buildings are demolished, construction of the new office building McDonald’s will occupy is expected to be completed by 2018.
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The McDonalds HQ move would mark a return to downtown, as the company headquarters once called home the 1930 LaSalle-Wacker building at 221 N. LaSalle, growing to occupy eight floors before moving to Oakbrook in the 1980s.
Having visited the truly huge Oakbrook McDonalds HQ complex many times, what struck me immediately about the deal was its potential to represent a backdoor real estate downsizing for the company. To speculate: if the company moves 100% from its campus, currently arrayed around a four-story, 700,000 sqaure foot building, nothing in today’s news item suggests more than 300,000 square feet for the new location. That’s a haircut on space of more than 57%, which, if pulled off, should please shareholders on its face, as the burger giant faces strong headwinds globally and peak profits are well in its rearview mirror. All that said, the company’s full relocation plans, future employment levels and ultimate disposition of the Oakbrook campus are unknown at this time. It’s a story to follow for sure.