The West Loop, driven by several large leases in Class A buildings, was the top-performing submarket during the fourth quarter. The direct vacancy rate has fallen well below 2009 levels as the submarket appears to be in recovery.
United Airlines began moving employees from Elk Grove Village into its new operations headquarters at Willis Tower (233 South Wacker). However, the company leased an additional three floors, or 180,000 square feet in the building, bringing their total occupancy to roughly 650,000 square feet. The 15-year lease will help stabilize the CBD’s largest submarket.
Other West Loop Class A buildings experienced noteworthy leases during the quarter. RSM McGladrey renewed their lease at 1 South Wacker for 132,000 square feet, representing a 22 percent decrease from their current space. Allianz Global Corporate & Specialty renewed and expanded their lease at 225 West Washington to 73,242 square feet.
The largest investment sale in the CBD during the fourth quarter occurred when the Pritzker Realty Group sold the Hyatt Center at 71 South Wacker to California-based Irvine Cos. The 1.5 million square foot trophy sold for a greater-than-expected $625 million, or $419 per square foot. The sale provides further evidence of investors’ appetite for well-leased, trophy assets in major U.S. markets.
The West Loop’s borders are defined as the Chicago River (North), I-94/I-90 (West), Wells Street (East), and Van Buren Street (South).
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