CHICAGO—R-T Specialty, a wholesale brokerage that provides specialty insurance services, recently secured a long-term lease in its current building at 500 W. Monroe, but Robert Sevim, executive managing director of Studley, tells GlobeSt.com that “it wasn't your traditional lease.” Like many expanding companies, R-T had to make many decisions several years before its agreement for about 27,000-square-feet expired. The company, for example, could simply have decided to keep their sublease on the 28th floor until it expired in 2017.
“But even when you take on a short-term space, you still need to invest in it,” says Sevim, especially if, like R-T, your company wants to expand its workforce by up to 40%. And although R-T did consider staying on the 28th and reworking the space, doing so would have been disruptive to their work.
But as reported last week in GlobeSt.com, Sevim, as R-T's representative, was able to engineer a new lease along with managing director Steve Smith and senior vice president Gary Kostecki, both of JLL, who represented the owner of 500 W. Monroe, Piedmont Office Realty Trust. R-T will be relieved of its sublease obligation and move this fall to reworked space on the 30th that will enable it to expand its workforce from 108 to 150.
“The old place was a very 1990s design,” Sevim explains, but “we're going to go and build the new place from scratch.” And the much greater focus on using space intelligently will ensure the new space won't be what Sevim calls a “cram-fest.” Piedmont will give R-T an allowance to renovate the space, but Sevim could not divulge the details.
For Piedmont, the deal “eliminates the risk of us not being a tenant in 2017,” Sevim adds. But he does not think the owner was driven by the fear, even though, according to JLL's most recent study of the city's high-profile buildings, the 973,000-square-foot building has an occupancy rate of 60.3%, with most of the vacancies above the 30th floor.
“Piedmont is a very well-heeled organization and had the financial wherewithal,” and confidence, to sign a creative lease, Sevim explains. As the building's outright owner, it is not struggling to make payments on the building, which gives it more freedom than other owners. “They are not coming from a place of desperation.”
Instead, he adds, the owner looked at R-T and saw an opportunity to build a long-term relationship with the exact type of firm increasingly attracted to this West Loop neighborhood. “The likelihood of continual growth and success in this company is high.”
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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.
