CHICAGO | 130 N Franklin | 751 FT | 51 FLOORS

[MultiModal]

Originally Posted by headcase

If I remember correctly, it's because the same developer or management company (or someone else) owns one of the buildings adjacent to the lowrise portion of the building, and they are preserving the views for that property.

SSDD

Tishman is the developer of 130 N Franklin and the view they would be saving is 123 N Wacker which is owned by LaSalle Investment Management they would somewhat be saving views at 155 N Wacker and that is owned by John Buck

[nergie]

http://www.globest.com/sites/brianjr...ail&pt=Chicago


CHICAGO—Over the next year or so, landlords and developers in Chicago’s downtown office market will play very close attention to the amount of new space absorbed by users. Several class A towerswere recently opened, and if all that space gets quickly absorbed, it will almost certainly help push developers to launch additional projects that will transform the city’s skyline.

So far, the prospects for new development look promising. The overall vacancy rate in the market did tick up to 17.3% in the first quarter, an increase of 30 bps, according to a new market study by Newmark Grubb Knight Frank. But that boost was largely due to the delivery of 150 North Riverside during the quarter, and 444 W. Lake St. in the previous one, which added 2.4 million square feet of space to the inventory.

But demand for such trophy spaces has been strong. In the first quarter, users absorbed another 544,000 square feet of class A space. And companies from a diverse cross-section of industries continue to see the CBD as a desirable location.

“The demand is stronger today than we’ve seen it in the last eight quarters,” Bob Chodos, vice chairman of NGKF, tells GlobeSt.com, especially when it comes to healthcare, tech and law firms. “It’s exciting to see the number of tenants that are out looking for space.”

Bank of America, for example, plans to occupy about 500,000 square feet at 110 N. Wacker Dr., a proposed 51-story tower by Riverside Investment & Development and Howard Hughes that was recently approved by the Chicago Plan Commission. And many others have similar needs.

Researchers from NGKF recently found that, over the next few years, tenants needing a total of about 13 million square feet will test the Chicago market. “If I was a betting person, which I am, I would bet that in the next 18 months we will see another class A tower,” says Chodos.

chi-130 franklin (2)The vision for 130 N. Franklin, which will most likely be one of the next trophy office towers to break ground.
There are a number of options, he adds. Hines, the developer of 444 W. Lake, has a building pad at Wolf Point ready to go, and Tishman Speyer already has a design for a 1.1 million square foot tower at 130 N. Franklin. Another Fulton Market development on the scale of McDonald’snew headquarters also remains a possibility.

Beyond that, several windows of opportunity will open between 2021 and 2024, when the leases for several big players will expire. And as tenants this large typically begin their searches four or five years out, downtown developers will soon have to make important decisions.

Chodos believes the quick progress made at the newest trophy properties such as 444 W. Lake and 150 Riverside will boost these developers’ confidence. “These buildings have all opened substantially leased,” and the spaces opened up by these moves were also filled quickly.

Even buildings which opened in the trough of the recession, he points out, such as 353 N. Clark St. and 300 N. LaSalle, were occupied relatively quickly. The pair subsequently sold for the record-breaking prices of $715 million and $850 million, respectively.

That’s a sign of both the market’s tremendous vitality, and the disciplined approach taken by developers. “We haven’t experienced massive overbuilding.”

[Skyguy_7]

As chicubs111 mentioned today in the Highrise section, there are what appear to be updated renderings on the K+S website. Might not mean anything, but is worth noting.

https://www.ksarch.com/com-130-n-franklin

[Fvn]

Originally Posted by Skyguy_7

As chicubs111 mentioned today in the Highrise section, there are what appear to be updated renderings on the K+S website. Might not mean anything, but is worth noting.

https://www.ksarch.com/com-130-n-franklin

Krueck + Sexton -- https://static.wixstatic.com/media/c...611_s_4_2.webp

[left of center]

Seems to have dropped by 2 floors according to the description on the website.

I hope this is still a viable proposal, but there has been a good amount of office space that has recently come online (River Point, 150 N Riverside) and soon to be UC (110 N Wacker). All the new office in the West Loop, as well as development of the OPO has the potential to soak up a lot of office demand as well.

[the urban politician]

I think this one will be on the back burner till the next cycle.

Really, those jerkoffs should’ve just left the old Chicago Mercantile Exchange building alone. Could’ve been converted to a hotel by now

[maru2501]

yeah there shouldn't be wholesale lot clearing like this for projects at that stage

[KWillChicago]

Yeah but good god I want this one built. Especially if they do some sexy lighting to emphasize the angles.

[left of center]

Originally Posted by the urban politician

I think this one will be on the back burner till the next cycle.

Really, those jerkoffs should’ve just left the old Chicago Mercantile Exchange building alone. Could’ve been converted to a hotel by now

The building was over 95% occupied immediately before demolition. It was a goddamn travesty what they did.

[dropdeaded209]

i have a source high up in K&S who told me the project is still alive and as you can imagine they'd really like to see this one built, too.

[HomrQT]

Originally Posted by left of center

The building was over 95% occupied immediately before demolition. It was a goddamn travesty what they did.

Almost like it was done before any protections could be put in place for it.

[230Roberto]

This is probably going to get tenant later this year considering the nearby office towers are completed/ already have one. Office space in this area will be in demand later this year or next year. Would like to this tower rise earlier though. The new rendering looks amazing.

[ardecila]

Originally Posted by dropdeaded209

i have a source high up in K&S who told me the project is still alive and as you can imagine they'd really like to see this one built, too.

I'm sure Tishman would love to get it built, and is still courting tenants. But they've got a lot of competition, especially since the Loop isn't quite the center of attention like it used to be with new competition in the West Loop/Fulton Market and North Branch.

If/when the economy slows down, I think a lot of companies will retrench. My girlfriend's company is already consolidating their office space into one building, cutting their total SF footprint by 30% and switching to hoteling. Nobody is happy about the change except the bean counters...

[Kumdogmillionaire]

Originally Posted by ardecila

I'm sure Tishman would love to get it built, and is still courting tenants. But they've got a lot of competition, especially since the Loop isn't quite the center of attention like it used to be with new competition in the West Loop/Fulton Market and North Branch.

If/when the economy slows down, I think a lot of companies will retrench. My girlfriend's company is already consolidating their office space into one building, cutting their total SF footprint by 30% and switching to hoteling. Nobody is happy about the change except the bean counters...

One company's anecdotal troubles doesn't exactly spell out concern for me on a national level or for the office demand on the whole. No offense to your story...

[Chi-Sky21]

Originally Posted by ardecila

I'm sure Tishman would love to get it built, and is still courting tenants. But they've got a lot of competition, especially since the Loop isn't quite the center of attention like it used to be with new competition in the West Loop/Fulton Market and North Branch.

If/when the economy slows down, I think a lot of companies will retrench. My girlfriend's company is already consolidating their office space into one building, cutting their total SF footprint by 30% and switching to hoteling. Nobody is happy about the change except the bean counters...

Market pretty much tanked right after you wrote this......please do not do that again!!

[the urban politician]

The market did take a big hit today.

But, if you look at the reasons why, it's the paradoxical goofiness that defines our fickle little stock market. The economy is too good, wages are up, fears of inflation and thus rising interest rates, thus fears of rising borrowing costs, hence this could affect companies' bottom lines...

[aaron38]

That may also mean that it's time to pull money out of stocks, lock in those record high gains, and put that money to work doing something else. Like building stuff.
Money sitting in stocks doesn't really do anything productive.

[ardecila]

Originally Posted by Kumdogmillionaire

One company's anecdotal troubles doesn't exactly spell out concern for me on a national level or for the office demand on the whole. No offense to your story...

Not anecdotal or trivial, her company's decision will cause several hundred thousand SF to become vacant. Consolidation is a very real trend both nationally and in the Chicago market and it is a significant offset to the new office space demanded by real growth.

As we move into 2018, the office market can expect to see an uptick in vacancy as more new space delivers and firms continue to consolidate.

src: Newmark Knight Frank, 4Q17 Chicago Report

To me, that does not seem like a good environment to launch a new trophy office tower when the available space, in both old and new buildings, is outpacing real growth. But who knows, it only takes one big anchor tenant to launch Tishman's giant iceberg...

[SamInTheLoop]

The consolidation trend is indeed very real.

However, it can also actually play a role in some cases of encouraging new development (at the same time that this is causing overall vacancy to trend up, all else equal....which from a macro standpoint plays a role in discouraging new development overall).

The reason is that when large firms consolidate their space, they are often times looking for a single contiguous large block of highly efficient space. Where is it very easy to find a single contiguous large block of highly efficient space? As an anchor tenant in a planned office tower.

Obviously industries and individual firms vary greatly in their price sensitivity/occupancy cost consciousness....ranging from a firm that would never even seriously consider a new construction rental price point, to those for which it is almost a ‘default’.....but my point here is that the impact of tenant consolidation on new development in the office market is not straightforward....

[ardecila]

Not every company needs a contiguous block of space. It comes in handy if you want to cut floorplates for glitzy stairways and amphitheater spaces, but if you're gonna ride an elevator between floors anyway, it doesn't necessarily matter whether you're riding one floor or nine.

Admittedly, the tiering of elevator banks can pose a problem for this if it forces people to transfer in the lobby or at an intermediate floor.

And yes, some companies may see consolidation as an opportunity to move to a new trophy tower.