Foundation Leases 16,500 SF at Michigan Plaza

"McCormick Foundation's space is near the top of the building, so there are spectacular views," says Mark Buth, SVP and managing director of leasing services for MB Real Estate, who acts as leasing agent for the building owner. "With the status of the Tribune Tower possibly being for sale, they thought this was an appropriate time to control their destiny and their space by signing their own lease. It's close to the Tribune Tower and a Michigan Avenue address with good existing conditions the foundation could utilize to try to keep their costs in line for construction."

The foundation was represented by Cal Wessman, Lisa Konieczka and James Otto of CB Richard Ellis, while Buth, along with leasing representative Kathleen Bertrand, represented building owner Loeb Partners Realty LLC. The New York City-based firm bought the property in December 2004 for approximately $273 million, sources say. Michigan Plaza's two towers total nearly two million square feet. The plaza is currently about 80% leased, and asking lease rates are around $21 per square foot net, Buth says.

Amenities at the building include on-site management, 24-hour security, a concierge, 500 parking spaces, a bus that travels to and from the West Loop train stations, and retailers. The buildings, constructed in 1982, were designed by Fujikawa Johnson & Associates. The plaza underwent renovations last year which brought new signage and interior storefronts, landscaping, a canopy and frameless glass entrance, and a new security desk and turnstiles. Other tenants include Blue Cross Blue Shield, Verizon, Unilever and Fox Television.

The property is located in the East Loop submarket, which is about 88% occupied with asking lease rates around $37 per square foot gross, according to Cushman & Wakefield's year-end office market report.

"It's been a little bit of a hot market, but then again, it's also a lot of musical chairs," Buth tells GlobeSt.com. "Many people are just shifting around, but we're keeping them in the neighborhood. It's a slower, more difficult market for all of downtown Chicago, but I would say that we're holding our own."

With this new lease, the building owners will donate $8,250 to the Greater Chicago Food Depository on behalf of the McCormick Foundation as part of their "Wave Goodbye To Hunger" campaign. Launched in February, the campaign pledges that the owners will donate $0.50 to the local nonprofit for every square foot leased at Michigan Plaza through the end of July.