Chicago Office Tenant Expands To Nearly 450K SF
Chicago-based engineering firm Sargent & Lundy has expanded the massive anchor-tenant lease it signed at 77 W. Wacker Drive last fall.
The company leased an additional three floors in the office tower, about 66K SF of space, on top of the 380K SF it had formally agreed to lease last December, Crain's Chicago Business reported. Sargent & Lundy's total footprint in the tower is now almost 448K SF, or about 60% more space than its previous home at 55 E. Monroe St.
The firm signed its initial deal with the goal of filling 300 roles in Chicago, and it has done so, a spokesperson told the outlet. Now, the company is looking to hire an additional 200 employees in the city to "meet the power and energy industry's rising demands," the spokesperson said.
Sargent & Lundy's initial lease last year was the largest new office deal downtown since Kirkland & Ellis' lease at Salesforce Tower in 2021. With the company's expansion, the 51-story, 960K SF tower is nearly fully occupied.
The landlord, State Teachers Retirement System of Ohio, has owned the building since 2008 and paid off its $150M mortgage on the property in 2023. The fund also invested in a new amenity floor at the tower.
The lease expansion comes as Chicago’s office vacancy numbers have slowly increased.
Following three quarters of tenant move-outs and consolidation of space, total office vacancy hit an all-time high of 24.5% in Q3, up from 24.3% in the second quarter, according to a Q3 Colliers Chicago office report. The brokerage doesn’t expect the vacancy numbers to continue to climb significantly, but also doesn’t see vacancy decreasing significantly over the balance of the year.
“There's a whole lot of buildings that make up that [vacancy] that just simply cannot do deals right now, and they're off on the sidelines,” Colliers Executive Vice President Steven Bauer told Bisnow in October. “But if you have the money and you can fund deals, especially in the West Loop, there's surprisingly good activity.”
