CHICAGO—One of the striking aspects of McDonald's recently announced move from suburban Oak Brook to the West Loop is the company's decision to occupy Oprah Winfrey's former Harpo Studios at 1045 W. Randolph St. In the not-so-distant past, Fortune 500 firms making the transition from a suburban campus to the CBD would choose an established top office property. And McDonald's choice has brought the Chicago office market to a tipping point, according to the latest market beat report from MBRE.

“Not only are large corporations continuing to migrate to the city from the suburbs, they are now considering unconventional sites in rapidly changing submarkets on a par with the city's most prominent trophy towers,” according to the report. The city saw something similar a generation ago, when the River North area was transformed from an aging warehouse district into a hot office market. But the transformation of the neighborhoods west of the Loop, especially Fulton Market, has not followed the exact same path.

Companies originally settled in in River North due to the cheap rental rates, MBRE points out, which did not rise until the submarket matured. But on the CBD's new western frontier, rents in some places have already hit “$30 net per square foot, which is comparable to rents at many of the class A office towers in the Loop.”

Of course, for many years River North attracted a host of smaller firms, whereas Sterling Bay, which also owns Harpo Studios, put Fulton Market on the map by attracting Google to its 1KFulton project, a former cold storage building. And earlier this year, the company signed Glassdoor to a 65,000 square foot lease at its 1330 W. Fulton, a 287,962 square foot building it is developing on spec.

These companies are primarily attracted to the western neighborhoods' highly-educated, young labor pool. Between 2000 and 2015, about 4,400 homes were built in the area, and the population grew 140%, MBRE states. “Before River West became an office market, it was a rapidly expanding residential market that attracted the ideal millennial employee.”

Instant Insights /

West Loop Office Market Hits Tipping Point

Related Stories

Recommended For You