REAL ESTATE | Baker & McKenzie seeks to lease 300,000 square feet, dousing plan for new West Loop high-rise
August 26, 2009
BY DAVID ROEDER
The law firm Baker & McKenzie LLP is negotiating to lease about 300,000 square feet in the East Loop, according to a source familiar with the negotiations. If the deal is completed, it would snuff out plans for a new office high-rise in the West Loop where Baker was slated to be an anchor tenant.
The source said Baker will move from the old Prudential Building, 130 E. Randolph, just up the street to the Blue Cross Blue Shield Building at 300 E. Randolph. Blue Cross parent Health Care Service Corp. is building 24 stories atop what had been a 33-story building. Baker's space requirement would translate into about nine floors of the addition, which could command premium rents because of the commanding view of Millennium Park.
This is an artist's rendering of a 50-story office building proposed but not built at 444 W. Lake — the northeast corner of Lake and Canal. Hines Interests LP is developer, Pickard Chilton Architects the designer.
Previously, Baker was the last tenant linked to plans for a 50-story tower at the northeast corner of Lake and Canal. The largest tenant signed for the project, William Blair & Co. LLC, pulled out last spring after developer Hines Interests LP couldn't get financing. Working with landowner Larry Levy, Hines tried to keep the deal alive by reducing the building's size. Without Baker, the property probably remains a parking lot for at least a few more years.
An executive with Baker declined to comment. Health Care Service spokeswoman Mary Ann Schultz said the company "is having conversations with many potential tenants but no deals have been signed at the present time."
Greg Van Schaack, senior vice president at Hines, said the West Loop site remains the next logical place for downtown office expansion. "If you look at the history, the best buildings in Chicago have performed well and been almost full in good times and in bad," he said.
AUCTION IS ON: After litigation threatened a delay, the auction of the old Chicago Main Post Office, 433 W. Van Buren, is expected to occur as planned. It's scheduled for 1 p.m. Thursday at the InterContinental Chicago O'Hare, 5300 N. River Road in Rosemont.
A prospective bidder, Robert Racky, sued over the auction's terms and asked for its delay. His suit in Cook County Circuit Court was removed to U.S. District Court on Tuesday, where Judge Rebecca Pallmeyer presided over an agreement between Racky, auctioneer Rick Levin and the U.S. Postal Service, which owns the structure. A Postal Service spokesman said the agreement clarified the "without reservation" nature of the auction, meaning that the top qualified bidder gets it without review by the seller.
That could produce some interesting possibilities. Developer and onetime FBI mole John Thomas said he has assembled investors who will bid on the property. "We will get it. We're well into the millions [of dollars] on this," Thomas said. He said he has a plan to generate income from the massive site within about six months and with minimal construction. He wouldn't comment further, but it's a good bet that parking is involved.
Racky agreed to let the auction proceed as scheduled without resolution on another issue he raised. He charged that extensive documentation about the building was issued only last week, giving bidders insufficient time for review. Racky also expressed determination. "I've spent well over $500,000 on lawyers and engineers already," he said.
NOW RENTING: Downers Grove has a new upscale rental community. Working for M&R Development LLC, McShane Construction Co. has finished the 294-unit Residences at the Grove at I-355 and Butterfield Road. The complex consists of three eight-story buildings plus 24 rental townhomes spaced over 16 acres that include a courtyard with an outdoor fireplace.
M&R partner Anthony Rossi said the development is about two-thirds occupied and he hopes the rest of the units will be filled by year-end. To boost interest in a poor market, M&R has offered two months' rent concessions. It's quoting rents of $995 to $3,100 per month.
The company has been aggressive in its development pipeline. It's looking to finance at 45-story apartment building at 171 N. Wabash, and it is working with Lake View groups to get support for a $100 million residential, retail and hotel complex along Addison immediately south of Wrigley Field. Rossi said he hopes to present a zoning proposal to the city in September, provided Ald. Tom Tunney (44th) offers his support. M&R cut the size and the height so as not to overshadow the ballpark.
CALENDAR NOTE: A free premiere of a film about architect and Chicago planner Daniel Burnham, "Make No Little Plans: Daniel Burnham and the American City," will be shown at 7:30 p.m. Sept. 2 at the Jay Pritzker Pavilion in Millennium Park. Judith Paine McBrien is the film's producer and director. Gov. Quinn will make a speech. The Archimedia Workshop supported the film with help from the Burnham Plan Centennial.
David Roeder reports on real estate at 6:22 p.m. every Thursday on WBBM-AM (780). The reports are repeated at 10:22 p.m. Thursday and 7:22 a.m. Sunday.