Research Report - Chicago Office Sublease
Punchkick Sublease 55 E. Monroe
Within the TAMI sector, seven firms are experiencing financial strain causing a total offload of 319,000 sf In contrast to TAMI, none of the FIRE sector firms are experiencing financial strain. The majority of FIRE tenants are subletting space to consolidate/right-size their workplaces or because of mergers/buyouts. FIRE firms are changing how they work with clients and how they operate internally, as a result their workplace strategies are evolving.
WHY ARE COMPANIES SUBLETTING? The majority of law firms are subletting due to
consolidation/right-sizing of office space, amounting to 568,300 sf or 74% of all law firm subleases in our data set. In recent years, the market has seen a shift in the legal sector workplace as firms are reducing their footprints as the need for file storage space, libraries and attorney office size have all decreased. Today, the national average sf per attorney is 800 sf, compared to 1,000 sf per attorney 10 years ago. Seyfarth Shaw is one example of a law firm right-sizing, consolidating from 306,000 sf at Citadel Center (131 S. Dearborn) to 200,500 sf of newly built-out space at Willis Tower (233 S. Wacker). The majority of law firms are subletting due to consolidation or right-sizing of office space With the recent tech boom, many wonder if the rapid and organic expansion of high-growth firms is sustainable in Chicago. Within the TAMI sector, seven firms are experiencing financial strain causing a total offload of 319,000 sf. In 2015, Motorola Mobility announced a significant decrease in its workforce due to restructuring and subsequently put roughly 200,000 sf on the sublease market. Today, 112,800 sf of that sublease space remains available. Not all TAMI tenants are undergoing financial strain. For example, Google deliberately leased 50,000 sf more than necessary at 1K Fulton, intending to sublet until its Chicago presence demands the additional space.
30% of all FIRE tenants are consolidating or right-sizing
Citadel, CitiBank, Credit Suisse and CBOT are all examples of companies consolidating their workplace and reducing square footage. All but CBOT are staying at their current locations, while CitiBank is moving into smaller office space at The Franklin (227 W. Monroe). CBOT underwent a drastic workplace shift when back in 2015 it closed more than half of its trading pits. The modernization of trading practices ultimately caused CBOT to sublet 133,600 sf of its space.
TOOK TOO MUCH INITIALLY 4
# OF SUBLEASES
CONSOLIDATING / RIGHT-SIZING
REASON FOR SUBLEASE
CUSHMAN & WAKEFIELD CHICAGO
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