CHICAGO—The growing penchant companies have for urban offices has been energizing the CBD for years, but more recently it began creating entirely new submarkets on the downtown's periphery. In its latest market beat report, MBRE says that the area surrounding Goose Island on the Near Northwest Side will soon attract so many emerging tech tenants that it should be considered a separate submarket.
The Goose Island corridor has even less office space than River West, the neighborhood between the I-90/94 Kennedy Expressway and Ashland Ave. where Google has chosen to locate its new regional headquarters and which MBRE began tracking as a separate submarket this year, but the level of interest and activity around the island means it can no longer be lumped in with River North.
"We're going to start tracking it and identifying it as a legitimate office market," David P. Kimball, an assistant vice president for MBRE, tells GlobeSt.com. Both Goose Island and River West still look small when compared to the massive towers in the CBD, he adds. "There is not a ton of data to track, but there is a lot going on."
Local developers such as R2 Cos. and Sterling Bay, among others, have been acquiring a lot of property and making big plans. Most notably, A. Finkl & Sons has left its steel mill site on the river, and Sterling Bay seems set to buy 28 acres there, pour in about $1 billion and transform it into a corporate campus.
As reported in GlobeSt.com, Sterling Bay acquired a vacant 4.18 acre site at 1511 W. Webster, once occupied by a tannery, earlier this year and will develop it into a 207,000 square foot headquarters for C.H. Robinson, one of the largest logistics providers in the world. Major tenants such as Coyote Logistics, Wrigley's Global Innovation Center, Jellyvision, and Seaton already occupy spaces in the area.
The Goose Island corridor, which stretches along the river from Ohio St. up to Fullerton Ave., currently has 19 office buildings with a total of 1.4 million square feet, with developers proposing another five buildings with about 819,000 square feet. River West currently has little more than 3.2 million square feet of inventory and another seven buildings proposed that would more than double its space to about 7.1 million square feet.
Kimball says that MBRE recently brokered the sale of a 90,000 square foot brick and timber loft building at 2065 N. Southport Ave. in the Goose Island corridor, and that the buyer will convert it to creative office space. He could not disclose any details about the sale, but Cook County records show that an entity connected to Shapack Partners, a River West developer, recently paid $10.6 million for the property.
"By their entrepreneurial nature, tech and other millennial-oriented companies are more interested in the next big thing than they are in conventional options," the market report notes. "Their enthusiasm for creative loft space with large floor plates transforms outdated industrial buildings into prime redevelopment opportunities."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
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.
