WEST LOOP — They can’t build office space fast enough in the booming Fulton Market District, one senior leasing director said.
Jack McKinney Jr. of Cushman & Wakefield said he expects to see the office market in the West Loop double in the next year, with at least 8 million square feet of new office space throughout Downtown by 2020.
“If you’re familiar with how it was 20 years ago, it’s incredible to see,” McKinney said. “It’s happening very swiftly, even by Chicago standards. There just hasn’t been enough inventory to accommodate the demand that exists today, but that inventory is coming.”
Among the surge of developments, McKinney is particularly excited to work with a planned office building at 375 N. Morgan St. that he said truly stands out, thanks to its expansive outdoor terraces and high-end facilities.
Tenants would have exclusive access to their outdoor terraces on each floor of 375 N. Morgan St. [Provided/Cushman & Wakefield]
Nine floors of offices are spread out in tiers, with eight offering exclusive access to terraces as large as 5,000 square feet that taper off on the east side of the building. At the end, an existing depot building will be renovated to create more event space.
The building will be stocked with amenities in the 11th-floor penthouse: two lounges, a library, a yoga studio and a fitness center. On the ground floor, renderings depict a lobby cafe and a 4,000-square-foot “white-tablecloth” restaurant, 49 parking spaces and 50 indoor bike parking spots.
In the penthouse of 375 N. Morgan St. will be two lounges, including the Sunset Lounge, depicted in this rendering. [Provided/Cushman & Wakefield]
A cafe is planned in the lobby of the building’s first floor. [Provided/Cushman & Wakefield]
The offices themselves would offer spacious views of the city from floor-to-ceiling warehouse-style windows meant to pay tribute to the West Loop’s industrial past, McKinney said.
“It’s consistent with what I’d like to think is what makes the neighborhood special,” McKinney said. “It feels a little more authentic and faithful to its history.”
A rendering of the 10th floor of the 375 N. Morgan St. development. [Provided/Cushman & Wakefield]
A rendering of the eighth floor of 375 N. Morgan St. [Provided/Cushman & Wakefield]
Still, the building is “architecturally daring” and a different silhouette than those easily found on the Chicago skyline, McKinney said. Curbed Chicago first reported on plans for the development, noting it will be built on the site of a notorious condo development that fell through in 2005 after it spawned a city corruption investigation.
Latsko developers want to build an 11-story office building at 375 N. Morgan St. [Provided/Cushman & Wakefield]
The property sat vacant after the city revoked the building permit until Fred Latsko bought it in 2012 for $1.5 million, less than half of what its previous owner defaulted on, county records show.
Now he is seeking financing for a project expected to cost at least $46 million. Construction could begin as early as spring, with the new building ready for tenants in late summer 2019.
The design of 375 N. Morgan St. is meant to evoke the essence of the West Loop’s history as a meatpacking district, with the building’s warehouse-style windows and industrial silhouette drawing on existing neighborhood architecture. [Provided/Cushman & Wakefield]
While Cushman & Wakefield already is looking to entice tenants with a stylish marketing site, developer Latsko Interests will move ahead with its plans regardless of whether the building is leased ahead of time.
That’s a major sign that even in two years, demand has skyrocketed, said McKinney, who attributes the surge to Google moving to the West Loop, Randolph Street’s Restaurant Row and the advent of Soho House.
“Two years ago, I fielded a lot of questions from tenants asking, ‘Who’s going to want to transfer on the “L” to go two stops west?'” McKinney said. Now, he said, proximity to the 5-year-old Morgan “L” station is in high demand.
City officials — including 27th Waf Ald. Walter Burnett Jr. — are looking to roll back industrial corridor restrictions on the Fulton Market District, which would open it up to more commercial and retail uses like office space.
Being in business with a father who spent his life working in Chicago real estate taught McKinney the importance of proceeding with caution in a market that could be brought to a painful standstill with a recession.
In the late ’80s, the city was experiencing “a period of almost unchecked growth,” which was crippled by the recession that ushered in the 1990s, McKinney said.
That “blood bath” was followed by the Great Recession, during which, “nothing happened for eight years,” from a development standpoint, he said.
The city’s real estate market has made a comeback, with a building boom creating what Tribune architect critic Blair Kamin referred to as a “densely populated Super Loop” expanding beyond the core of the Loop.
Compared to glass high-rise towers that can take years to plan and get approved, relatively shorter buildings like the 11-story structure at 375 N. Morgan St. can be built much faster, contributing to the growth, McKinney said.
And while it’s possible the influx of trendy new office space will create new vacancies in currently occupied buildings, McKinney said there’s little cause for concern now, as the city continues to recover from the bitter recession.