CHICAGO-Joseph Freed & Associates, with corporate offices in Palatine, IL, is renovating 600,000 sf at the one-million-sf Sullivan Center. The space, with addresses both at 33 S. State St. and 36 S. Wabash Ave., had been occupied by Carson Pirie Scott.

Carson Pirie Scott had used the space for more than 100 years before closing earlier this year. The building, designed by Louis Henri Sullivan and originally built for Schlesinger & Meyer department store in 1899, with significant additions in 1903 and 1906, was one of the first department stores built using fireproof steel-frame construction. Chicago architect Daniel Burnham designed the 1906 addition, and major restoration work was done on the buildings in 1961 and 1980.

The structure comprises about nine interconnected buildings for the total of one million sf, says Wayne Shulman, senior vice president in the corporate real estate services and officer brokerage division of HSA, which leases the office portion of the building. Freed & Associates acquired the building in 2001. Carson Pirie Scott had entered into a 20-year sale-leaseback agreement with Freed but had announced in August 2006 its intention of leaving its flagship store citing rising operating costs.

The move between the first level of the buildings, one must exit and enter another building. But, for the upper floors, a person could go from one building to the other without leaving the Sullivan Center, says Mike Solka, project manager with Leopardo Construction. His company, headquartered in Hoffman Estates, IL, is gutting the floors to leave a core and shell. Demolition is currently about 90% completed, Solka says. New ventilation systems will be installed in the building and a new ComEd vault will be installed, he says.

The eight floors being redeveloped will have 250,000 sf of retail space and about 350,000 sf of office space. A cost estimate for the project was not provided; however, when Freed acquired the property in October 2001, it was reported by GlobeSt.com that the entire cost of the project would be reportedly $68.9 million, including a $19-million purchase price of the building and the renovation of 400,000 sf of office place on the upper floors, which was already completed.

Joseph Freed & Associates will move into about 50,000 sf of the building when the renovation project is completed, says Paul Fitzpatrick, senior vice president of development with Freed. The move is a slight expansion but mainly a consolidation of their headquarters and some of their satellite offices with approximately 125 of Freed & Associates employees to be based from the site, Fitzpatrick says. The move “is really just the evolution of the company and focusing on the large mixed use projects that we are doing. It made sense for us to be centrally located here in the city in one of our projects,” he says. The move is expected in the second quarter of 2008.

Last year, the School of the Art Institute of Chicago moved into 53,801 sf of space, as reported by GlobeSt.com. The school recently signed a lease for an additional 25,000 sf of space on the seventh floor, Fitzpatrick says. The state of Illinois is the other main tenant in the building and there are currently a “variety of smaller tenants” on the upper floors, Shulman says. The asking lease rate for the office space is $24.50 per sf gross, Shulman tells GlobeSt.com. About half of the office space is currently spoken for with the retail space still currently all available. There is expected to be restaurants and entertainment on the Wabash and Monroe sides, with specialty flagship stores on the State Street side, says Tom Walsh, senior vice president of leasing with Freed. The asking lease rate for the retail space is between $65 per sf and $125 per sf net, Walsh says.

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