UBS Drops Floor to Remain Anchor at 1 N. Wacker

Tom Irvine, general manager of building owner Hines, would not comment on the new 10-year lease rate, which will begin in October. In the building, UBS occupies 13 floors, but will give up the 36th floor with the new lease, he tells GlobeSt.com. "They'll give us one floor back on Aug. 1. It's just a small change in square footage, nothing that moves the dial," Irvine says. After the floor is empty, the building will be at about 94% leased. Current class A office rents average about $37.05 per square foot in the Central Loop, according to a Q4 report by Grubb & Ellis.

Though it's not 100% taken, Irvine says Hines is just glad to have the building heavily occupied. "For us getting 400,000 square feet out of the way was one of the keys that we focused on since our purchase of the building," says Irvine. Hines bought the 9-year-old, 51-story tower in April 2008. Three more leases totaling about 153,000 square feet were signed in the past few months, to two law firms: Barnes & Thornburg LLP and Sedgwick Detert Moran & Arnold LLP, and another lease to Northwestern Mutual. "Now we've pushed our expiration curve to 2022 and beyond, and puts the building in a much stronger financial position."

He says he's not aware that UBS looked anywhere else, though he's sure the Zurich, Switzerland-based firm evaluated its property options. It's a tenants market right now anywhere in Chicago, Irvine says. "But I think in the next few years we'll see a tightening, with a limited new supply of trophy class A assets, so rents should hold strong," he says.