CHICAGO—MB Real Estate recently completed a 182,000-square-foot office lease with Chicago Public Schools for the Sears department store space at 1 N. Dearborn St. in Chicago, which the retailer plans to vacate in April. CPS will relocate its headquarters from 125 S. Clark in November 2014, and take a portion of the ground floor and the entirety of the lower level, 2nd and 3rd floors for its new offices, a fraction of the space it occupies on Clark St. CPS says the move will save it $60 million over the next 15 years.
MBRE represented the Chetrit Group, the owners of 1 N. Dearborn, in the negotiations once Sears decided it wanted to leave the retail space but hold onto the approximately 50,000-square-feet of office space it also occupies in the building. But MBRE has more work ahead as it deals with Sears' departure.
"We're going to have a large vacancy on State and Madison and another on Dearborn and Madison," Gary Denenberg, executive vice president and managing director of MBRE's leasing group, tells GlobeSt.com. The CPS move will still leave about 23,000-square-feet of retail space on the corner of State and about 10,000-square-feet on the corner of Dearborn.
"The profile of the building itself is going to change," Denenberg adds, benefitting other tenants in the 17-floor, 940,000-square-foot property and even other neighborhood retailers when the remaining street-level space, which was widely considered an unsuccessful location for Sears, gets occupied by stores that make a better fit for the CBD.
"I think the downtown retail market is in great shape because we're seeing a tremendous amount of interest in these spaces," Denenberg adds, "which we might not have seen 12 to 24 months ago."
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
