East Loop: Slew of New Deals Helps Ailing Submarket

After experiencing positive absorption at the end of 2010, the East Loop witnessed its direct vacancy rate increase by 0.6 percent. The reversal in the submarket’s recovery was largely due to lease expirations at 200 East Randolph. Currently, 20.8 percent of office space in the East Loop is vacant: the largest percentage of the CBD’s submarkets.

Despite a negative quarter, the East Loop was home to the largest lease transaction in the CBD. Groupon expanded by 150,074 square feet by signing a short-term lease at 303 East Wacker. Evraz North America leased 34,000 square feet at 200 East Randolph as it relocates its headquarters from Portland, OR. Additionally, Robert Morris College will expand by 34,000 square feet at 401 South State.

On the other hand, several tenants decided to reduce their footprint in the submarket. GolinHarris will vacate 66,000 square feet when it joins fellow Interpublic Group firm Weber Shandwick at 875 North Michigan. Crain Communications will cut its space requirement by more than 22,000 square feet when it vacates its long-time headquarters at 360 North Michigan and relocates to 150 South Michigan.

The East Loop has 10 blocks of contiguous, direct space greater than 100,000 square feet available, including the largest contiguous space in the CBD: a 415,000 square foot block at 200 East Randolph. The building also has a 296,000 square foot sublease block that will become direct space in January 2012 when Kirkland & Ellis’ lease expires. Considering large block availability across the CBD and speculation regarding a new office development, it remains likely that the East Loop will continue to have the highest vacancy rate of the CBD’s submarkets.

The East Loop is bordered by the Chicago River (North), State Street (West), Lake Shore Drive (East), and Van Buren Street (South). It is inhabited mostly by advertising and media firms and corporate tenants.

For our complete outlook on the Chicago Office market, please reference the MB Real Estate 1st Quarter 2011 Chicago Market Overview and Submarket Snapshots.

MB Real Estate Represents Greer Burns & Crain in Lease Renewal

MB Real Estate’s Corporate Services & Tenant Advisory group represented Greer Burns & Crain in a 15,300 square foot lease renewal at 300 South Wacker in Chicago. The law firm, which specializes in intellectual property legal services, was able to renew its lease three years prior to its expiration. The firm, which occupies the entire 25^th floor, has been a tenant in the building since 2000.

“Our client took a serious look at the marketplace, but in the end ownership was aggressive and kept a good tenant from leaving their building,” said Boris Yelyashov, Vice President of MB Real Estate’s Corporate Services & Tenant Advisory group, who along with Executive Vice President and Managing Director Andrew Davidson represented Greer Burns & Crain.

Melissa Rubenstein and Brian Atkinson, both Vice Presidents for Jones Lang LaSalle, represented the building’s owner Harbor Group International.

MB Real Estate Releases 1st Quarter Chicago Market Overview & Submarket Snapshots

MB Real Estate is releasing our 1st Quarter 2011 Chicago Market Overview, a quarterly report that tracks trends, analyzes data, and provides you with our forecast for the Chicago CBD and Suburban Markets.

Demand in the CBD was slightly negative but essentially flat during the quarter as several large transactions continue to support a market impacted by job losses. Suburban Chicago resumed its solid decline, lacking growth drivers. Although economic headlines are positive, Chicago’s office markets are still working through the recessionary job losses.

In addition to the Chicago Market Overview, please reference our in-depth 1st Quarter 2011 Submarket Snapshots, which include highlights and analysis of each of the Chicago submarkets that MB Real Estate tracks.

HDI-Gerling America Expands, Relocates To 161 North Clark

MB Real Estate represents U.S. division of German insurance company in 18,000 SF lease.

CHICAGO, APRIL 7, 2011—MB Real Estate’s Corporate Services & Tenant Advisory group represented HDI-Gerling America Insurance Co. in an 18,000 square foot lease at 161 North Clark Street in Chicago. The commercial property and casualty insurance company, a wholly owned unit of German insurance company HDI-Gerling, will be expanding from its current 12,000 square foot offices at 150 North Wacker Drive in Chicago to the 48^th floor at 161 North Clark this summer.

HDI-Gerling America took advantage of favorable market conditions to upgrade its office space and consolidate its operations onto a single floor.

“This move not only allows HDI-Gerling [America] to consolidate its growing business onto a single floor at 161 North Clark, but also gives them the flexibility and ability to expand in the future,” said MB Real Estate associate David Kimball who, along with senior vice president Jay Beadle, represented HDI-Gerling America.

Jonathan Cordell of Tishman Speyer represented the building owner.