Tech Firms Increasingly Look To The West Loop For Engineering Talent
Verifone is on the hunt for engineering talent, and like an increasing number of firms, believes downtown Chicago is the place to find it. The Silicon Valley-based provider of point-of-sale payment technologies agreed to lease the entire 11th floor of 550 West Jackson in Chicago, a total of 27K SF and more than double its current space at 300 South Wacker Drive.
“Their goal is to hire about 150 engineers by next year and build a terminal engineering team here,” Colliers International’s Andrew Gooliak said. Along with colleagues Nick Polsky, Romy Zeid and Evan Djikas, he represented the company in lease negotiations.
“We began with a simultaneous search in the O’Hare submarket and downtown, and they determined that a downtown presence better aligned with their hiring strategy,” he added.
Tech firms now lease more than 13.5M SF in Chicago, about double what they occupied just four years ago, and a West Loop location like 550 West Jackson allows an easy commute for both city dwellers and those coming off the nearby train lines that stretch out into many suburbs.
“This move was really a no-brainer,” Gooliak said.
The lease could also be a sign that 550 West Jackson is on its way back to financial health. In March 2017, Crain’s reported that a $97.5M mortgage on the building was transferred to a special server. According to a recent report from MBRE, earlier this year the property was about 62% vacant.
But owner 601W Cos., which bought the property for $125M in 2005, recently launched a $12.5M renovation program, which by this summer will add amenities that rival other Class-A buildings in the central business district. These will include a penthouse-level fitness center and tenant lounge, an expanded and updated lobby and conference amenities, bike room and ground-level retail.
“We were very comfortable with ownership’s plans to make significant investments in the property and we believe they will do what it takes to attract larger companies on a long-term basis,” Gooliak said.
He said recent leasing velocity in the building has been quite solid. That would match what 601W Cos. has achieved with its 2.5M SF Old Main Post Office, located just south of 550 West Jackson. The developer, which will open the renovated post office by September, recently signed a batch of new leases for the property, including ones for Abelson Taylor, Home Chef and 84.51. Uber Freight and First Home Loan Bank are also reportedly in lease negotiations, according to MBRE.
The best feature of 550 West Jackson may have been that it allows Verifone to keep all of its new employees together on one floor, Gooliak said. It also allows the firm to plan for the future.
“If their hiring kicks into even higher gear, there is expansion space available.”