New Downtown Tower Lands a Law Firm as a Tenant
The developer building an office skyscraper on Wacker Drive has plucked another big tenant from elsewhere downtown, keeping up leasing momentum for the tower more than a year and a half before it opens.
Law firm Perkins Coie leased 100,000 square feet on 3½ floors at 110 N. Wacker Drive, according to a statement from the firm and developers Riverside Investment & Development and Howard Hughes.
The Chicago office of the Seattle-based Perkins Coie will move in late 2021 to the 55-story West Loop tower under construction along the Chicago River, coming from a slightly larger space at the Citadel Center, 131 S. Dearborn St. That’s in line with the smaller footprints many large law firms are leasing as they reduce support staff, shed physical law libraries and in some cases embrace telecommuting. Perkins Coie leases about 116,000 square feet at the Citadel Center, according to real estate information company CoStar Group.
The deal is a win for Riverside and Howard Hughes, marking their third announced lease in the past two months at the 1.5 million-square-foot tower, which will be anchored by a 530,000-square-foot Bank of America office. The developers last month announced an 86,000-square-foot lease with law firm Morgan Lewis & Bockius, which will move next year from 77 W. Wacker Drive.
Another 77 W. Wacker tenant, law firm Jones Day, is close to finalizing a lease to join them at the new tower, according to sources familiar with the firm.
With the Perkins Coie deal on floors 34 through 37, 110 N. Wacker is now 60 percent leased, according to the developers’ statement. Other signed tenants include Chicago-based mergers-and-acquisitions adviser Lincoln International and No18, a high-end shared-office provider that will open a location on two of the tower’s highest floors.
The tower’s three law firm deals are troubling for a broader downtown office market that needs new and growing tenants to help absorb new supply coming to the market instead of new buildings pilfering tenants from older ones.
The Citadel Center has been a victim of new supply, at least when it comes to the legal sector. Another law firm, Holland & Knight, signed a deal last year to move from the 37-story Dearborn Street tower to 150 N. Riverside, another riverfront tower Riverside developed that opened in 2017.
And the competition is growing. The 2.8 million-square-foot redeveloped Old Main Post Office has been on a leasing roll but is still expected to add a large chunk of available space to the market when it opens its doors later this year. 110 N. Wacker Drive is slated to debut in late 2020, and new office skyscrapers are planned next to Union Station and at Wolf Point, anchored by BMO Harris Bank and Salesforce, respectively. Those projects don’t include millions of square feet of offices planned or underway in the Fulton Market District.
Perkins Coie entered the Chicago market in 2002 and today has 110 lawyers and 110 professional staff here, according to the firm’s statement.
The impending departures from the Citadel Center of Perkins Coie and Holland & Knight are sharp body blows to a building that has otherwise had recent leasing momentum on its side. The tower’s owner, a venture of developers Hines and Angelo Gordon, last year renewed Citadel’s 400,000-square-foot lease and inked a deal for 128,000 square feet with social media management tool company Sprout Social, doubling the company’s footprint in the building.
The Citadel Center is 95 percent leased today, according to CoStar. The property’s net operating income was $24.8 million in 2018, according to a Bloomberg report tied to a loan on the building.
