{"id":1004098806,"date":"2014-06-20T06:30:53","date_gmt":"2014-06-20T14:30:53","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004098806"},"modified":"2022-12-04T16:45:11","modified_gmt":"2022-12-05T00:45:11","slug":"jv-formed-for-half-billion-dollar-redevelopment-of-chicagos-old-post-office","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/jv-formed-for-half-billion-dollar-redevelopment-of-chicagos-old-post-office\/","title":{"rendered":"JV Formed for Half-Billion-Dollar Redevelopment of Chicago\u2019s Old Post Office"},"content":{"rendered":"

By Barbra Murray, Contributing Editor<\/em><\/p>\n

It\u2019s not mail that will be delivered from the Old Post Office in Chicago a few years from now. It will be office space, retail space and much more, now that Sterling Bay Cos. and International Property Developers North America have formed a joint venture to redevelop the historic 2.7 million-square-foot property into a mixed-use destination. The price tag on the high-end project\u2019s first phase alone is $500 million.<\/p>\n

It\u2019s a gargantuan undertaking, and the strategic partnership is wasting little time moving forward. \u201cThe timeline is immediate,\u201d Andy Gloor, managing principal at Sterling Bay, told Commercial Property Executive<\/i> of the commencement of work on the development. \u201cWe\u2019re in discussions with a few different users and simultaneously working on overall construction plans. Our intention is to get moving.\u201d<\/p>\n

The redevelopment endeavor has been in the works for a few years. IPDNA acquired the long-vacant Old Post Office, a 1930’s Neo-Classical building at 433 W. Van Buren St., in a 2009 auction for approximately $24 million. Antunovich Associates was later brought on board to spearhead the project design, the first phase of which will yield substantial retail offerings and hundreds of square feet of office space.<\/p>\n

It\u2019s a timely pursuit. Chicago\u2019s office market is being fueled by tech hiring and new and expanding companies, according to a report by Marcus & Millichap Real Estate Investment Services. And many occupiers aren\u2019t seeking the traditional accommodations. \u201cA lot of the growth companies in today\u2019s market are looking for creative office space, large floor plates,\u201d Gloor said. He cites leases by Sara Lee Corp. and Google as examples. Last year, Google signed on for 250,000 square feet at Sterling Bay\u2019s Fulton Market redevelopment project, and Sara Lee relocated its suburban headquarters to a 235,000 square-foot space at the real estate company\u2019s 400 S. Jefferson St building. Both properties feature large floor plates. \u201cWe look at this trend as a national progression,\u201d he added.<\/p>\n

And like Sara Lee, many office users are migrating toward the city, away from the outskirts. \u201cThere are a lot of companies that are growing in Chicago, and you have a trend where companies that were in the suburbs are relocating downtown because they\u2019re having a hard time attracting young workers to the suburbs.\u201d<\/p>\n

As for the city\u2019s retail market, tenant demand is on the rise. Marcus & Millichap anticipates that the vacancy rate will drop to 6.3 percent this year, spurring an increase in asking rents of approximately 3.4 percent.<\/p>\n

Sterling Bay and IPDNA are still ironing out the details of the specific square footage of both the office and retail segments at the Old Post Office project, but earlier plans called for 800,000 square feet of retail and 400,000 square feet of office space. Future phases of the redevelopment will include residential and hotel offerings.<\/p>\n

Years in the making, it\u2019s now full steam ahead for the Old Post Office project, although some thought it would never get off the ground. In its fourth quarter 2012 Chicago market report, one commercial real estate services firm described the Old Post Office project as a \u201cpipe dream.\u201d<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s not mail that will be delivered from the Old Post Office in Chicago a few years from now. 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