Tishman Speyer Signs Lease Expansion in Chicago

Arrive Logistics has added 20,600 square feet to its Chicago footprint at Tishman Speyer’s CME Center for a total of 77,666 square feet as part of a lease expansion through 2037. The deal makes it the latest logistics company to expand in Chicago over the past five years, bucking a trend that has seen other companies shed some of their downtown office space in the wake of the pandemic.

The firm will reconfigure its Chicago offices across the entire 23rd and 24th floors, as well as a portion of the 25th floor at CME Center’s 30 S. Wacker Drive tower. The 2.3 million-square-foot office complex also includes another 40-story tower at 10 S. Wacker Drive.

Arrive Logistics’ expansion at CME Center is its third since first opening offices at the campus a decade ago. Founded in 2014, Arrive Logistics expanded from a 10-person team to nearly 2,000 employees across nine North American offices.

Jonathan Schoonmaker, Arrive’s Chief People Officer, told Crain’s Chicago Business the company needed more office space because it plans to add about 100 new jobs next year to the 470 employees it currently has in the Windy City.

---

READ ALSO: Where Office Visits Are Spiking Now

---

Schoonmaker said Arrive employees usually work five days a week in the office. The expansion will enable the firm to consolidate space it currently has across the center’s two towers. Arrive plans to phase in the work over the next year, according to Crain’s.

Terry Herlihy of NAI Hiffman negotiated on behalf of Arrive, while Tishman Speyer was represented by an in-house team of Ellen May and Isabella Rapken.

CME Center upgrades

Tishman Speyer acquired the trophy office complex in 2007 for $686 million, according to Yardi Research Data. Completed in phases between 1983 and 1987, the LEED Platinum-certified property comprises two high-rises connected by a 10-story center structure and a 500-car parking garage. The towers feature large floor-to-ceiling windows, floorplates of approximately 29,000 square feet and up to 16 corner offices per floor.

CME Center includes 24-hour fitness facilities and ZO Clubhouse, an amenity center featuring a lounge, library, bar area, boardroom, huddle and wellness rooms, as well as a multi-purpose conference center with seating for up to 175 people. Working with architects Kreuck Sexton Partners, Tishman Speyer recently completed an upgrade of the property’s lobby, facade and entrances.

In addition to Arrive, notable tenants include Chicago Mercantile Exchange, which recently extended its commitment to the campus, but also Wells Fargo, Reed Smith and RSM.

Another significant tenant is BP, which signed a 240,000-square-foot lease extension at the property earlier this year. The oil and gas multinational company has been occupying the entire seventh through 10th floors of 10-30 S. Wacker Drive since 2009. The current deal will keep its Chicago office there at least through 2032.

Opportunities in Chicago’s office market

While there are still challenges in Chicago’s Central Business District, including a 26.6 percent office vacancy rate in the third quarter, there are also positive signs, particularly in the West Loop. The CBD recorded 1.5 million square feet of new leasing activity in the third quarter, a 2.6 percent decrease quarter-over-quarter for a year-to-date new leasing total of 4.6 million square feet, according to a Cushman & Wakefield report. The West Loop accounted for 50.9 percent of the new leasing.

While new construction has been limited, The Bell, located at 225 W. Randolph in the West Loop, recently completed a $150 million full-building renovation. The property secured 619,000 square feet of new leases, Cushman & Wakefield noted.

Yardi Research Data’s July report on the Chicago office market also cited positive outlooks, including $759 million in office sales year-to-date as of April and an office development pipeline of 809,168 square feet.