Big law firm bolting Wacker Drive for new Union Station tower
A newly formed legal giant is the second law firm to lease a new office at the future BMO Tower.
In a boost to developer John O’Donnell’s latest downtown skyscraper, Faegre Drinker Biddle & Reath confirmed it has leased 105,000 square feet at 320 S. Canal St.
The firm, created this month by the merger of Minneapolis-based Faegre Baker Daniels and Philadelphia-based Drinker Biddle & Reath will reduce its total Chicago office space by about 60,000 square feet: In their longtime local offices, Drinker Biddle has occupied 112,000 square feet at 191 N. Wacker Drive, while FaegreBD has about 54,000 square feet at 311 S. Wacker.
“It was key that our office space in this important market reflect the energy and excitement surrounding the launch of Faegre Drinker, and 320 South Canal Street does that,” Faegre Drinker’s Chicago co-leaders, Patrick Miller and James Sawyer, said in a joint statement.
But the firm’s consolidation into significantly less space than the legacy firms lease today also deals a blow to the downtown office market and a pair of landlords losing their largest tenants.
Faegre Drinker is moving to a southwest corner of the Loop that is turning from a corporate afterthought into a soon-to-be hot spot, fueled by thousands of employees and a slew of companies moving to the redeveloped Old Post Office at 433 W. Van Buren St. That $800 million-plus project, combined with BMO Tower and a nearly $670 million renovation of Willis Tower, account for more than $2 billion in capital pouring into a pocket of the Loop along the South Branch of the Chicago River.
Faegre Drinker’s deal also signals that O’Donnell could have similar success drawing law firms to BMO Tower just as he has done at 110 N. Wacker Drive, a 55-story skyscraper set to open later this year. Law firms Jones Day, Perkins Coie, Morgan Lewis & Bockius and King & Spalding are all poised to leave their current downtown offices for that new tower, which Riverside is developing with Dallas-based firm Howard Hughes. Riverside also landed a couple of major law firms at 150 N. Riverside Plaza, the 54-story tower it opened in 2017.
At BMO Tower, Riverside already has landed financial services law firm Chapman & Cutler, which signed a 100,000-square-foot lease in December.
Just as that firm will leave behind a big vacancy for the Korean investment firm that owns its longtime current home on Monroe Street, Faegre Drinker is sending its landlords into the market to backfill their spaces.
The firm is the largest tenant at 191 N. Wacker, which is owned by U.S. affiliates of Munich-based insurance company Allianz and Toronto-based Manulife Financial. The 37-story building is 95 percent leased today, according to real estate information company CoStar Group.
Faegre Drinker also is one of the largest tenants at 311 S. Wacker, a 65-story building owned by Chinese investor Cindat Capital Management. That building, which is 86 percent leased today, is slated to lose professional services firm Duff & Phelps, which plans to move to the Fulton Market District late next year.
Working in both landlords’ favor is that the downtown office market remains hot. Thanks to a strong economy, a tight job market and many coastal tech firms ramping up hiring in Chicago, companies moved into more downtown office space in 2019 than any year since 2007.
The Faegre Drinker merger created a firm with more than 1,300 lawyers and consultants in 22 offices in the U.S., China and the United Kingdom, according to the firm’s statement. The headcount and projected gross annual revenue of nearly $1 billion would make it one of the nation’s 50 largest law firms.
