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CHICAGO-The last song, at least for a while, is being played in the game of anchor-tenant musical chairs in the Downtown office market. Sidley Austin Brown & Wood is taking 502,000 sf in a 40-story, 1.3-million-sf tower at 1 S. Dearborn St., a move across the street for the law firm from Bank One Plaza.

That is a coup for Hines Interests, which still must backfill space on the other side of Dearborn Street. However, the number of large law firms, which have driven the office market lately, is finite, as is the universe of well-heeled financial institutions like UBS Warburg, which anchored 1 N. Wacker Dr. The pool of larger tenants able to anchor a development may be shallow enough to idle cranes, suggests Julien J. Studley EVP Joe Learner, moderator late last week at a Chicago Real Estate Organization panel discussion of the market.

The only way to get a new building off the ground, adds John Buck Co. principal Drew Nieman, may be to offer a 250,000-sf tenant a more efficient space plan that allows them to operate in smaller quarters, reducing costs.

On the other side of the coin, Jones Lang LaSalle leasing director Mark Gunderson is attempting to lease the 600,000-sf space Mayer, Brown, Rowe & Maw will vacate at 190 S. LaSalle St. when it moves into new quarters at 77. S. Wacker Dr. The building, which is 98% leased, is not hindered by outmoded technology as has been suggested, Gunderson says.

“It really wasn’t a technology issue. It became a space and equity issue,” Gunderson says of the law firm’s move. The Central Loop building had low- to mid-rise space available, which hurt the firm’s ability to attract top legal talent when candidates checked out the views. “To give someone a view of the wall of the W Hotel is not a good sell for them,” he adds.

The challenge for leasing brokers representing owners of older buildings will be to keep their properties competitive with the new developments offering the latest bells and whistles, Learner says. Multimillion-dollar renovation projects are under way at Tishman-Speyer Properties assets, including 200 W. Madison St., reports Vicki Noonan, where the Hyatt Corp. is headquartered until its building at 77 S. Wacker Dr. is ready.

“It needs a fresh new face so it’s no longer perceived as the Hyatt building,” Noonan says of the 20-year-old property.

Besides renovating the lobby, filling the 200 W. Madison St. space will require an approach focusing on smaller deals, rather than trying to fill the entire 260,000 sf in one fell swoop. “That building wasn’t designed to be a major tenant building,” Noonan says, noting Hyatt Corp. started with 90,000 sf there. “We all like to make the big deals and get it over quickly, but that’s not going to happen.”

Gunderson admits he may have no choice but to take the same approach a few blocks away at 190 S. LaSalle St. “Ideally, we’d like to land a big tenant, but our likelihood is three to four deals,” he says.

While no lobby renovation is planned, a private dining room on the first floor is likely to become a public restaurant, Gunderson says, while a health club could fill an area with 14-foot ceilings formerly used for Mayer, Brown, Rowe & Maw’s back-office accounting functions.

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