Sidley Austin Set To Anchor New 1M SF Related Midwest Office Tower
Law firm Sidley Austin inked a deal as the anchor tenant for Related Midwest's 45-story trophy office building at 725 W. Randolph St. in Fulton Market, a major step forward for the first major new office tower in the city in several years.
The firm plans to take "more than half" of the 1M SF high-rise and is expected to move into the building in late 2030, according to a spokesperson. Related Midwest President Curt Bailey told Crain's Chicago Business he expects the company to close a deal to secure financing for the tower and to start construction next year.
The deal marks a significant turn for the Chicago office market, which earlier this year saw its downtown construction pipeline run completely dry for the first time since 2012. The city has not seen a major trophy building break ground since Salesforce Tower in April 2020.
“Chicago has been central to Sidley’s history for more than 160 years and our move to 725 Randolph reflects our continuing commitment to Chicago,” said Brian Fahrney, chair of Sidley’s executive committee, in a statement. “We look forward to serving clients from our new home in one of the nation’s fastest-growing commercial districts.”
Sidley has had a lease for 554K SF at 1 S. Dearborn St. since 2005, which is set to expire in 2030, according to Crain's.
The proposed tower still requires city council approval, and Related pivoted to the current plan in 2023 after previously proposing a mixed-use residential-and-hotel tower on the site. Kohn Pedersen Fox Associates designed the building.
Related's newest project could deliver into a market that, while still awash with overall vacancy, is tight on top-shelf properties. Matt Pistorio, partner at R2 Cos. and founder of Madison Rose Leasing Co., said in May the vacancy rate in the 20 newest office buildings in Chicago is around 8%.
Those top buildings are also seeing strong utilization. Trophy office peak day occupancy hit 93.7% on March 3, according to Kastle data reported by Newmark.
The deal is the clearest sign to date that the city's office market has emerged from the doldrums of the post-pandemic activity hit.
Related has been busy developing a myriad of projects throughout the city, including Illinois Quantum and Microelectronics Park, The 78 and a 72-story residential tower at 400 Lake Shore.
“725 Randolph will be an unparalleled offering that transforms the workplace experience,” Bailey said in a statement “This will be the go-to building in the city’s premier submarket for their team to grow and thrive in this new milestone.”
