Tom’s Recommended Reading for the Week
Check out the top news in Chicago commercial real estate before heading into the weekend!
- Co-Working Centers Continue to Carve Out Bigger Niche – Although it remains a highly fragmented industry, companies catering to the demand for co-working or shared office spaces are continuing to expand and add more services to appeal to today’s workers on the go. There continues to be healthy growth in all sectors of the “workspace on demand” niche, ranging from business centers and executive suites to incubators and even hotels that are now offering drop-in space on a permanent or temporary basis, notes Mark Gilbreath, founder and CEO of LiquidSpace in San Francisco… NREI
- Building Owners Brace for Common Approach to Measuring Office Space – One of the biggest complaints of office tenants is that building owners throughout the world use different systems for measuring how many square feet or square meters tenants are leasing, deviating as much as 24% from one another. Now an international coalition of real-estate organizations formed last year is hoping to change that. The International Property Measurement Standards Coalition in June plans to announce a single measurement system for the global office market. “The current situation on measuring standards is totally unacceptable,” said Ken Creighton, chair of the coalition’s board of trustees. But whether or not building owners adopt or ignore the standards remains to be seen… Wall Street Journal
- Health Care Systems Seek Ways to Monetize MOBs – Hospitals and other health care providers, already dealing with changes brought by the new Affordable Care Act (ACA), are selling their assets to third party owners to reap the benefits of escalating property prices. Recent studies on medical office buildings (MOBs) by Colliers International, Newmark Grubb Knight Frank and JLL indicate that an abrupt slowdown in new development in 2013, along with the expected increase in demand for MOB properties, has created intense interest from investors… NREI
- Sam Zell takes charge of REIT, moves HQ to Chicago – Seven years after selling Equity Office Properties Trust, Sam Zell is the newly minted chairman of another Chicago-based office REIT. CommonWealth REIT shareholders today voted in a new board including the Chicago billionaire, marking the completion of a 15-month effort by Corvex Management LP and Related Cos. to overthrow management and install new trustees. The new board then installed Mr. Zell as chairman of the real estate investment trust and his deputy David Helfand as its president, CEO and acting chief financial officer and treasurer… Crain’s Chicago
- Here’s what it looks like when Willis Tower’s Ledge cracks – The Ledge tourist attraction at the Willis Tower has been closed after a report of cracking glass at the 103rd-floor attraction.The Ledge has been closed for a “routine inspection,” but the building’s Skydeck tourist venue on the 103rd floor remains open, said a Willis Tower spokesman. Earlier this morning, the spokesman said the Ledge remained open.The spokesman said a visitor is believed to have cracked the protective coating on one of the glass boxes, likely with a sharp object, at the Ledge while the venue was open last night… Crain’s Chicago
Tom’s Recommended Reading for the Week
I’m sorry about jinxing the weather everyone. I clearly forgot where I lived. Check out the top news stories in Chicago Commercial Real Estate before heading into the weekend!
- KCura gobbles up more office space on LaSalle Street – Fast-growing legal software maker kCura Corp. is taking a big chunk of extra office space at its home on South LaSalle Street to accommodate all the workers it’s been hiring.The Chicago-based company is adding nearly 50,000 square feet at 231 S. LaSalle St., bringing its total space to 133,609 square feet. It’s the fourth time in as many years that kCura has expanded. In 2009, it had just 8,000 square feet, according to CBRE Group Inc., which represented the company. KCura has experienced explosive growth recently. The company hired 150 people last year and expects to add a similar number this year… Crain’s Chicago
- Hotels are in, office is out for proposed West Loop high-rise – Jupiter Realty Co. has changed course again on its proposed West Loop high-rise, opting to fill it with hotel rooms instead of apartments or office space. The Chicago-based developer wants to build a 23-story tower at 108 N. Jefferson St. with two hotels, a 210-room Hampton Inn and a 128-room Homewood Suites, sharing the building, according to an e-mail Ald. Brendan Reilly (42nd) sent constituents last week. That plan marks a big shift for Jupiter, which first proposed a 45-story tower with apartments and offices when it acquired the sitefor $7.5 million in 2007… Crain’s Chicago
- Open-Plan Office Space: Is It All It’s Cracked Up to Be? – According to popular accounts, the corporate workplace is changing, seemingly reducing demand for office space. The square footage per employee is shrinking due to the increased prevalence of the open-plan office format. As a result, tenants now require less space than they previously needed. The open-plan office format has been increasing in popularity since the recession, as many tenants viewed it as a way to reduce their real estate costs. Moreover, in theory, this format increases employee productivity through easier collaboration… NREI
- Paltry Office Pantries Give Way to Sleek Social Spaces -For 12 years, employees of Anbau, a luxury real estate investment and development firm, worked in a walk-up on Fifth Avenue with no kitchen pantry to heat lunches or make coffee. So it was fitting somehow that the kitchen would become the focal point of the company’s new offices, on East 26th Street, overlooking Madison Square Park. A boomerang-shaped bar made out of Indonesian mango wood doubles as the reception area, making it the first place visitors see. With limestone countertops and stainless steel appliances, the area is more reminiscent of a residential kitchen than it is of an office pantry. In the months since the company relocated, Anbau has hosted cocktail parties in the same place where employees eat lunch and hold staff meetings… NY Times
- Suburban Office Vacancy Rate Rises – The suburban Chicago office market has long suffered from a high vacancy rate, and in the first quarter, that number climbed to 21.2%, up from 20.3% at the end of 2013, largely due to the decisions of several corporations to move downtown and the decisions of others to shrink their footprints, according to Colliers, which recently published its overview of the first quarter. “While there continues to be improvement in certain pockets of the market, tenants in the suburbs are still acting conservatively,” the researchers note. Too few are ready to make the long-term commitments needed to create a healthy market, and many suburban landlords are still offering aggressive incentive packages… Globe St.
Tom’s Recommended Reading for the Week
It’s starting to feel like summer in Chicago with the temperature rising (keep your fingers crossed). Check out our top Chicago Commercial Real Estate articles before heading into the weekend!
- Give the People What They Want – A recent survey conducted by Mancini Duffy and designed to gain insight into ways that companies can maximize workplace performance to produce successful business results found a large disconnect between what’s most important to employees in the workplace and what employers are currently providing. Focusing on the importance and current performance of workplace characteristics in the areas of brand, talent, agility and work patterns, responses were consistent across the 20 industry sectors represented, with themes recurring across the four categories. Furthermore, many of the characteristics cited as most important to employees were not only relatively easy givebacks, but ones that could increase flexibility and efficiency, better support the way people want and need to work and enhance the image of the corporation… NREI
- Marketing Technology Startup, Revenew, Moves headquarters to Downtown Chicago – Chicago Mayor Rahm Emanuel and Revenew CEO Nasrin Thierer announced today that the marketing technology startup has relocated from Palatine to downtown Chicago. The new office, at 200 W. Monroe Street, places Revenew in the heart of the city’s tech startup community, and houses the company’s thirty-plus employees, with room to accommodate additional planned growth.“Revenew’s relocation to downtown Chicago is a testament to our city’s growing status as a leading technology hub, which attracts the most innovative startups and top technology talent from all over the country,” said Mayor Rahm Emanuel. “I welcome Revenew to its new home and look forward to working with them and other startups as the industry continues to create 21st century jobs and opportunities for Chicagoans… World Business Chicago
- Chicago Stock Exchange Stays Put – The shift to electronic trading made the physical trading floor of the Chicago Stock Exchange unnecessary, and several years ago, the CSE gave up about 62,000-square-feet of the space it occupied for decades at One Financial Place, 440 S. LaSalle. That left the exchange with about 50,000-square-feet in the 40-story, 1-million-square-foot tower that anchors the southern end of the city’s financial district. And now the exchange has decided to give up about one-third of that space as it shifts to a more collaborative office layout.It has just signed a long-term renewal of about 33,000-square-feet at 440 S. LaSalle. The exchange has operated on the seventh and eighth floor, but will now consolidate operations onto one floor… Globe St.
- Walgreen checked out Main Post Office for HQ: report – In search of new digs for their headquarters, Walgreen Co. has scouted the hulking cement block that formerly housed the Main Post Office in the South Loop.But the Deerfield-based drugstore chain isn’t tipping their hand.The company told Crain’s Chicago Business it was “not engaged with developers on any new locations for our corporate headquarters.”But Crain’s reports that British developer Bill Davies, who owns the building, has negotiated with Walgreen without reaching an agreement.A source tells the Sun-Times that Walgreen reps were at the Illinois Department of Commerce and Economic Opportunity in January expressing interest in the post office, but discussions — described as preliminary — never broached job numbers or state incentives… Chicago Sun Times
- Strong Employment Numbers Lead to Hope for More Office Leases – There was a surge in hiring among national office tenants in April, with an addition of 75,000 new jobs, an increase representing more than one-third of the growth seen during the past 12 months. April’s improved employment statistics were reflected in most industries, with total non-agriculture new jobs rising by 288,000 and the national unemployment rate dropping to 6.3 percent, according to the U.S. Bureau of Labor. Employment in professional and business services increased by an average of 55,000 new jobs per month over the past year. The retail segment also saw an increase of about 35,000 new jobs in April, while growth in industrial employment was largely unchanged from previous months… NREI
Tom’s Recommended Reading for the Week
After the 4 day break this week, the Blackhawks continue their road to the Stanley Cup finals. Check out our top Chicago commercial real estate articles before the game tonight!
- Toyota’s Jilting of California a jolt to Illinois – Sometimes they just leave. Without warning, they announce it’s over before you can beg and plead and promise. They tell you they’ve found a better fit, a partner that does things for them you haven’t or can’t. So they’re moving on and taking part of you with them. That’s what Toyota did this week to California. Anyone who worries about business in Illinois should take heed. Divorce is rampant these days. The Japanese carmaker, which gained a foothold in America through its relationship with Southern California, abruptly announced it will shift around 3,000 marketing and finance jobs from Torrance, Calif., to Plano, Texas, where it’s establishing a new North American headquarters outside Dallas… Chicago Tribune
- Sun-Times to shrink space at River North HQ – After cutting jobs, the owner of the Chicago Sun-Times is cutting office space at its riverfront headquarters. Wrapports LLC, which owns the Sun-Times Media Group newspapers, is negotiating a lease for about 45,000 square feet in the River North Point office building at Orleans Street and the Chicago River, according to people familiar with its plans. That’s a 54 percent reduction from the 98,000 square feet it currently leases in the 23-story building, formerly known as the Apparel Center, where the Sun-Times moved in 2004. San Francisco-based Shorenstein Properties LLC, which owns River North Point, in January confirmed that the Sun-Times’ parent exercised an option to end its lease in the fourth quarter of this year. At the time, Shorenstein left open the possibility that Wrapports could downsize and stay put… Crain’s Chicago
- Five Office Designs to Increase Productivity – Designers and architects have pondered how to design an office to encourage productivity for more than 100 years. In the early 20th century, offices resembled factories. Starting in the 1960s layouts changed to foster teamwork. And by the beginning of the 21st century, office design sought to inspire creativity. “Under each fad, there were ideas ahead of their time,” says Stephen Apking, an interior-design partner at the architecture firm Skidmore, Owings & Merrill LLP. Many ideas from the 20th century have been improved and incorporated into 21st century design, Mr. Apking adds… Wall Street Journal
- Place Making That Works: Physical Location, Technology, and Knowledge Sharing – Employers continue to be concerned with how to utilize corporate culture and physical workspace to attract the skills and talents needed for their organization’s future. While compensation and benefits are crucial elements that affect recruitment and retention, there are also three key aspects of an organization that cannot be overlooked in this process: physical location, technology and knowledge sharing. To attract the talent a company desires, employers must offer the correct mix of an attractive location, supply modern technological tools and provide employees with opportunities to develop meaningful connections with co-workers. Increasingly, organizations are examining how to best make use of this mix in their workspaces, using the physical workplace as an integral tool to help recruit and retain the best talent and create spaces that will appeal to the multiple generations in today’s workforce… WorkDesign Magazine
- Buck preps residential makeover for H20 Plus building – Developer John Buck plans to give the West Loop headquarters of skincare products maker H2O Plus a major facelift that could include as many as 500 residential units. Chicago-based John Buck Co. has agreed to pay a little more than $20 million for the two-story building at 845 W. Madison St., with plans to redevelop the property in a couple years, according to people familiar with the transaction. H2O Plus CEO Rick Ruffolo confirmed via email that the Chicago-based company, which makes shower gels, lotions, shampoos and face creams, has been “in regular communication” with company founder Cindy Melk, who owns the property, and Buck regarding the pending sale of the 90,000-square-foot building. H2O Plus plans to find a new home… Crain’s Chicago