Law Firm Renews at Struggling IBM Plaza

CHICAGO-The law firm of Swanson, Martin & Bell LLP has renewed and expanded its space at the troubled IBM Plaza Building, going from 50,000 sf to 68,000 sf and expanding by one floor to two-and-a-half floors at the 1.4-million-sf tower. The deal is the first major lease for the 330 N. Wabash Ave. building since IBM’s relocation in 2004 to the Hyatt Center at 71 S. Wacker Dr., as well as Jenner & Block’s planned exit to the new tower it will share with Mesirow at 353 N. Clark.

James Lockhart, a senior vice president with Grubb & Ellis, says the firm was able to get some rent concessions in the 15-year lease. The company is losing some of its Lake Michigan views on floors 31-34 because of the Trump International Hotel and Tower going up on the former Sun-Times Building site directly to the southwest of the IBM building.

“I don’t think Swanson was interested in paying what the building thinks is market value,” Lockhart tells GlobeSt.com. Prime Group Realty Trust is the owner of the building. “Swanson has been a tenant for many years, and they’re losing world-class views. We were able to obtain a very favorable package. The firm has grown from nine partners in 1992 to 95 lawyers, and we were able to work some expansion plans and early termination options into the lease.”

He says he cannot confirm if the company paid anywhere close to the $14 to $16 per sf average rent for the building. However, he says Prime Group is reconsidering plans to convert the lower floors to residential condominiums. “They’re now back on track to keeping it as office space,” Lockhart says. “They’re talking about redeveloping base systems and upgrading infrastructure on the lower floors; if they do that, they could raise the rents to the high teens.” Ownership is still considering condos for the upper floors of the 52-story tower, he says.

The building vacancy is high in the building, and will rise to 43% once Jenner & Block leave in 2009. The building was designed by renowned architect Ludwig Mies van der Rohe in 1971. Lockhart and senior vice president Gary Gavula, along with Associate Tom Hollinden, represented the law firm in the deal. Anita Pallardy, senior vice president of leasing with Prime Group, represented ownership.