X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CHICAGO-Not only will CNA Financial Corp. keep its headquarters in the East Loop, the seventh-largest US commercial insurance company also will embark on a $63.7-million redevelopment of its 1.1-million-sf office building. The decision to stay at 333 W. Wabash Ave. and redevelop space for new tenants is prompted by $13.7 million in tax increment financing, endorsed Tuesday by the community development commission.

The insurance company has occupied the entire red-coated steel 45-story building since its construction in 1972, but a restructuring of operations has reduced its space needs by 281,000 sf, says department of planning and development assistant commissioner Nori Greenstein. CNA Financial Corp. considered a sale-leaseback of the building, selling it and leasing space elsewhere, including suburban locations, adds executive vice president Tom Pontarelli. The company started out in a two-room office on Monroe Street in 1904, Pontarelli notes, but could sharply reduce costs by moving to the suburbs.

John Buck Co. has been hired as project manager for the building’s redevelopment, as well as leasing agent for the 281,000 sf. Potential tenants already have been identified, Pontarelli says, for space that could involve the fourth and fifth floors as well as seventh through 15th.

The lobby will be expanded and reconfigured, with separate entrances for CNA employees and new tenants, according to company plans. Security features and the building’s original duct work also will be adapted, and the building will be topped by a “green” roof. Costs of reconfiguring the lobby range from $24 million to $27 million alone, Pontarelli says. Costs also include potential tenant improvement packages.

Not only could the company capitalize on a soft–and softer than Downtown–suburban office market, CNA Financial already has space at 3500 Lacey Rd. in Downers Grove. “The city’s offer of assistance was critical to CNA staying in Chicago,” Pontarelli says of the deal, which pays 21% of the total cost.

The insurance company is promising to add 200 jobs as well as keep 2,500 here for 10 years as a condition of the TIF money, which will be paid after the renovation project is complete. Jobs range from $45,000 a year clerical workers, Greenstein says, up to $129,000 a year management posts. The city estimates those employees spend $32 million a year Downtown, she adds.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.