The president and CEO of the company that owns 303 East Wacker in Chicago told investors this week that new owners in the East Loop are offering extremely high concessions packages intended to attract large tenants in anticipation of a quick sale at an attractive price.
“The actual impact of this strategy is unknown at this time, but the competition for signing new tenants in the East Loop has become increasingly fierce,” wrote George J. Carter, President and Chief Executive Officer of Franklin Street Properties. “Although the level of concessions required to attract and commit tenants has spiked to an all-time historical high, management is encouraged by the recent trend of rising rental rates in the East Loop which, in turn, could translate into a competitive advantage and increase the desirability of the Property.”
Carter told investors that Service Payment Plan recently renewed its lease for 9,100 square feet in the building, and that the company has also executed a temporary lease with the Consulate of Hungary for approximately 4,800 square feet. Carter also said the firm is aggressively pursuing potential leases with two new tenants that may add 20,000 square feet of occupancy to the building in 2016.
303 East Wacker is a 28-story, multi-tenant office tower with 860,000 square feet of office and retail space and a 294-stall underground parking garage. The property was approximately 60 percent leased at the end of the third quarter of 2015.
New amenities intended to boost leasing activity from a much wider range of small and mid-sized companies have been added to the building over the past six months. Included is a new conference center, a Wi-Fi lounge and a management office on the second floor adjacent to the fitness center. All are expected to be available to occupants of the building this month.
Carter said the building’s management has also finished supervising the construction of the lobby improvements for Bake for Me, a café and bakery food service, which provides breakfast, coffee and lunch options for occupants in the main lobby from early morning to mid-afternoon.
“Management continues to be very focused on leasing the Property’s large existing vacancy,” Carter concluded. “Although plenty of work remains to stabilize the Property, we believe that the Company has the capital to fund the estimated tenant improvement costs and leasing commissions necessary to re-lease a significant portion of the vacant space.”