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CHICAGO-AT&T has downsized its space at the Apparel Center by more than 10% to 171,400 square feet. The company has signed a long-term lease renewal for a portion of its space at 350 N. Orleans, where it previously occupied 193,000 square feet and remains the largest tenant.

The telecommunications firm evaluated options for relocation before deciding to stay in the 1.2-million-square-foot building, where it has been located since 1989. AT&T houses training and call centers, as well as other administrative functions, in the property.

“Working closely with AT&T’s Transaction and Asset Management groups, we evaluated other space in AT&T’s existing leased/owned portfolio as well as additional opportunities in the market,” said Jones Lang LaSalle senior vice president George Kotrogiannis, who, along with associate Kurt Kittner, represented AT&T in the lease. “But this building, in addition to location, offers the functionality and flexibility that a major tenant such as AT&T needs. We were also able to leverage AT&T’s credit and generate rent reduction.”

Representatives for both AT&T and building owner Merchandise Mart Properties declined to comment on the lease. CB Richard Ellis represented the building owner, a subsidiary of Vornado Realty Trust, in the lease. The Apparel Center was constructed in 1977 and renovated in 2005. The property has a 525-room hotel on site, direct access to 15 restaurants, and proximity to public transportation.

The River North building, built along the Chicago River and connected to the Merchandise Mart, is now about 65% occupied. Asking lease rates in the River North submarket are around $26 per square foot, a recent Cushman & Wakefield market report says. Overall occupancy rates are about 90%, according to the report.

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