Chicago's office space woes?

High crime, high property taxes, business and state income taxes, onerous business regulation, corrupt woke government...where to start? Oh yes, 15% of Illinois' funding comes from the Feds which is in jeopardy because we insist on being a Sanctuary City.

Downtown's office space woes

By Justin Kaufmann, Carrie Shepherd and Monica Eng, Axios News

Feb 28, 2025

Chicago's downtown rebirth has taken a hit after the federal government and other high-profile companies announced decisions to sell and relocate from significant buildings.

The latest: Chicago's premier tech incubator, 1871, announced it is leaving the Merchandise Mart after 13 years. The incubator, founded by now-Gov. JB Pritzker and fostered by then-Mayor Rahm Emanuel, was the anchor of the renovation of the Merchandise Mart in the 2010s.

Since then, companies like Motorola Mobility, Allstate and Grainger have set up shop in the historic design center.

Zoom in: 1871's decision to leave puts vacancies back in the spotlight. It comes on the heels of the Trump administration's decision to sell some of the Loop's federal buildings, namely the Kluczynski and Metcalfe buildings near Federal Plaza, while private companies like Ken Griffin's Citadel are leaving their offices for a smaller footprint.

Zoom out: The depressed commercial real estate market isn't helping. Buildings aren't selling for anywhere near the price they were bought for, forcing landlords to recoup their money in higher rents or foreclose on properties.

Case in point: The old Montgomery Ward warehouse building in River North once was heralded as a tech hub, featuring the headquarters of Groupon. Last month, the building sold for a mere $89 million after being purchased for $510 million in 2018. That's a staggering 83% loss.

Between the lines: The downtown reshuffling comes at a tricky time as companies push to get workers back in offices full time. According to return-to-office data for January, Chicago office visits were down 47% from January 2019. That's a huge difference from December 2024, which was 31% less than December 2019.

Yes, but: While many of these buildings could be in danger, downtown businesses are still excited about a future tenant: Google.

The tech giant is renovating the Thompson Center, which will serve as its Chicago headquarters for over 1,000 workers.