CHICAGO | Post Office Redevelopment

[ardecila]

Originally Posted by MayorOfChicago

I really wish given the tens of thousands of people working in this building that they would simply tunnel into the mezz level of the CTA blue line at Clinton on the east side of the station and have a walkway go one block directly east into the old post office. Seems so straightforward to me, especially with 290 above this site and not having to deal with going through an existing building.

While they're at it have the same pedway go directly north and tie right into Union Station.

The connection to Union Station is planned. I believe Riverside will construct a short extension of the Pedway through their site to the corner of Clinton/Van Buren, then the government needs to step up for the one block of Pedway from Van Buren to Ida B Wells.

That connection is part of the larger Union Station project, which is currently tied up in the pissing match between Metra and Amtrak.

I don't think there is a connection to OPO planned, there's not really a good way to thread it through the various levels of infrastructure there (Union Station tracks, Canal St Underpass, 290 onramps, etc).

[bnk]

Originally Posted by jl224990

Here is the list they have signed so far:

1. Walgreen (6/18/2018) 200000 sf,
2. Ferrara Candy (11/2/2018) 60000 sf
3. Chicago Metropolitan Agency for Planning (1/9/2019) 47000 sf
4. AbelsonTaylor (2/22/2019) 85000 sf
5. Home Chef (4/22/2019) 75000 sf
6. 84.51, 57000 sf
7. Uber (8/19/2019) 463000 sf

That's 987000 sf

Three are still under discussion

• Federal Home Loan Bank of Chicago 125000 sf
• Cisco Systems 130000 sf
• CBOE 175000 sf

The three add up 430000 sf

They have 2.5 million sf for lease. So provided that the above three finalize the lease, that will leave just a bit over 1 million sf remaining. According to news in June, they were well ahead of their schedule in finding tenants, so they had set up a new goal to lease 75% by the end of this year. With several high profile tenants, it's showing good momentum. I think they can easily reach or even surpass the goal.

I thank you much for your efforts in answering the question.

Thumbs up to you.

[aaron38]

What does the Clinton St Station under 290 look like today? On Streetview, there's construction/renovation happening, I don't know how old that image is.

Are there planned streetscape improvements for the sidewalks there? It'd be nice if they put some good lighting up around the Clinton station.

[Baronvonellis]

A block south, Northern Trust's 3000 employees are leaving the area in January 2020 for 333 S Wabash. Luckily, the Post Office is going to more than make up for that loss in the area.

Those leasing agents must be getting fat bonuses this year!
Wasn't it a few years ago when everyone was laughing that that British guy Sir Richard wanted to redevelop the Post Office?

[Tom In Chicago]

Originally Posted by aaron38

What does the Clinton St Station under 290 look like today? On Streetview, there's construction/renovation happening, I don't know how old that image is.

Are there planned streetscape improvements for the sidewalks there? It'd be nice if they put some good lighting up around the Clinton station.

It's pretty dismal. . . lots of homeless milling around. . . lost people with luggage looking for the Greyhound station. . . the Clinton subway station itself is old and in need of cleaning as well. . . not sure there's any incentive for the CTA to do so given it's probably not that busy of a station. . . yet. . .

. . .

[LouisVanDerWright]

^^^ People were laughing at Bill Davies (RIP) because he was a chump with a reputation for landbanking...

[glowrock]

Originally Posted by aaron38

What does the Clinton St Station under 290 look like today? On Streetview, there's construction/renovation happening, I don't know how old that image is.

Are there planned streetscape improvements for the sidewalks there? It'd be nice if they put some good lighting up around the Clinton station.

It's hidden enough that I literally didn't even know it was there while driving down Clinton many days to get to my workplace. Only realized it was there when I took the train there a relatively short time ago!

Honestly, the lighting and signage is terrible there. Not like I'm speeding down Clinton and don't notice anything around me, so it's a lighting/signage issue for sure.

Aaron (Glowrock)

[SamInTheLoop]

Originally Posted by LouisVanDerWright

^^^ People were laughing at Bill Davies (RIP) because he was a chump with a reputation for landbanking...

Who apparently wasn't really a developer at all. These folks are usually pretty easy to spot, fwiw. I was calling it back then....as were some others.

[ardecila]

Originally Posted by aaron38

What does the Clinton St Station under 290 look like today? On Streetview, there's construction/renovation happening, I don't know how old that image is.

Are there planned streetscape improvements for the sidewalks there? It'd be nice if they put some good lighting up around the Clinton station.

I've always thought it would make sense for CDOT to relocate Megabus (and any other bus operators) to the space under the Ida B Wells/Congress viaduct, instead of using it for car parking. Similar to the Union Station Bus Terminal in DC, this way each bus provider could set up a little kiosk for ticketing and/or waiting on cold days, even on warmer days passengers could still wait under cover. Plus, it wouldn't be a dedicated building, so as the bus industry evolves they're not locked into a costly permanent building.

Passengers could wait under cover, and would have a direct connection to the Blue Line. If CDOT also extends the pedway from Union Station to the Blue Line stop, bus passengers could also have a direct connection to Metra (ideally this connection would extend to the Greyhound terminal as well).

Unfortunately, despite the almost-billion dollars spent on the Circle Interchange, it appears IDOT is intent on returning the space under the viaduct back to car parking. Right at the hub of the entire region's transit system. Ugh.

[MorganChi]

Crain Chicago is reporting that Pepsi co is near a big deal at the old post office . They are racking these companies up . This is turning out good for a building that was thought to be gone.

[Skyguy_7]

^ It is unbelievable! Their leasing team must be loaded with 10/10 blonde bombshells or extremely talented people or both!

[rivernorthlurker]

Originally Posted by MorganChi

Crain Chicago is reporting that Pepsi co is near a big deal at the old post office . They are racking these companies up . This is turning out good for a building that was thought to be gone.

article https://www.chicagobusiness.com/comm...-lease-pepsico

Purchase, N.Y.-based PepsiCo, whose Quaker Oats, Tropicana and Gatorade brands have long been based in Chicago at 555 W. Monroe St., is nearing an agreement to lease around 200,000 square feet at the Old Post Office, sources said.

The soft drink company would be leaving its namesake 17-story building on Monroe Street, where it leases more than 230,000 square feet, according to real estate information company CoStar Group.

[Cheap_Shot]

Regarding the PepsiCo move, I have a little in depth knowledge of their reasoning.

Pepsi had quite a long term lease at 555 West Monroe (currently been there since 2002 when the building was built), well below market rent, and until recently, leased the entirety of the building. As the lease came closer to expiring, senior leadership didn't have a cohesive plan about future space needs at the building, or Chicago in general. Numerous layoffs within the building have dramatically cut the need for space and I believe their short term plans are to only occupy half of the building at most, which jives with what Crain's has. (~230K sq ft)

All of the buildings close to Union and Ogilvy have seen their rents increase materially over the past 10 years. Pepsi didn't want to absorb that increase, especially given the business units that operate in Chicago are not performing well financially. My guess is that the OPO offered something slightly (or even well) below market to get Pepsi to jump.

Perhaps the OPO is offering all of these companies something below market rate to get them in the door, knowing that large tenants like this are less likely to move than smaller firms when rates increase in the future?

[Vlajos]

^ I think the weighted average signed office leases at OPO are a bit over $31 PSF. The according to CoStar, the West Loop submarket has an average of $36+ PSF. So that is likely the case.

[Randomguy34]

601W is probably able to justify offering lower rents, despite being right next to Union Station, since the Old Post Office got over $100 mil in tax breaks. Otherwise, I would expect rents in the building going for a premium

[Cheap_Shot]

Originally Posted by Vlajos

^ I think the weighted average signed office leases at OPO are a bit over $31 PSF. The according to CoStar, the West Loop submarket has an average of $36+ PSF. So that is likely the case.

That's a good piece of info. So the difference when leasing 200,000 sq ft is $1,000,000+/yr. Easily something an exec can claim as "savings" when justifying the move.

[Vlajos]

Originally Posted by Randomguy34

601W is probably able to justify offering lower rents, despite being right next to Union Station, since the Old Post Office got over $100 mil in tax breaks. Otherwise, I would expect rents in the building going for a premium

Right, millions in Federal historic tax credits.

[jl224990]

Today's news makes mention of WeWork in the pipeline.

https://www.chicagotribune.com/colum...bpa-story.html

[SamInTheLoop]

Originally Posted by SamInTheLoop

Very pleased to hear about this sold leasing momentum, but not surprised.
This is the single most important office project in Chicago - not only at present - but in a long time. And - the transformational potential for the SW Loop area, with the Post Office being the catalyst, is enormous. I wouldn’t be surprised if it’s up to 70% leased by the time it opens to the first tenants later this year. Also, although I don’t have any inside info as such, my guess is that one of the major coworking firms will take a large space - quite possibly the largest coworking space in the city (an entire floor?) here as well. It makes too much sense.

Aging well, with absolutely no inside knowledge of specific non-public deals or non-public prospective deals at the time.

[rivernorthlurker]

Originally Posted by SamInTheLoop

Aging well, with absolutely no inside knowledge of specific non-public deals or non-public prospective deals at the time.

Guess we will start calling you Nostradamus

Wholly agree though. Height gets the most attention, but in hindsight in conjunction with the BMO tower this could (imho of course) end up being the most significant development story of this cycle. By emphatically extending the commercial frontier from the Loop southwards, it may generate sufficient momentum and a feedback loop that could fuel that area for 10 years plus starting with Riverline and finally make the 78 come to fruition.

Also I believe the building itself and the riverfront revitalization will be stunning and grab a lot of people by surprise alone.