News

05.04.17
Bank of America’s river tower move to kick off hiring spree

As seen in Chicago Tribune

Bank of America’s big Wacker Drive lease will kick off construction of a 51-story office tower, as well as a hiring spree by the bank in Chicago.

The bank has signed a nearly 500,000-square-foot lease to anchor the development at 110 N. Wacker Drive, a site currently occupied by mall landlord GGP’s low-slung headquarters along the eastern edge of the Chicago River, Mayor Rahm Emanuel, the bank and the project’s developers announced at a news conference Thursday.

The Charlotte, N.C.-based company plans to move about 2,000 of its 5,600 Chicago-area employees into the new tower starting in late 2020, Chicago market President Paul Lambert said after the event. In addition, some of the space will be used to accommodate hundreds of new employees the bank plans to hire in the coming years, Lambert said.

Bank of America has not said which buildings it is expected to move workers out of when the new tower is completed. It has offices throughout the city and suburbs, including 827,000 square feet at 135 S. LaSalle St. and 356,000 square feet at 540 W. Madison St.

The Wacker tower will bring together divisions that meet daily with clients, such as consumer business, wealth management, commercial banking, small business and capital markets, Lambert said.

“It’s all a growth strategy,” Lambert said. “The first step in growing is to bring (those divisions) all together, and then we are aggressively growing that footprint.”

BofA’s lease for the lower 16 floors means that by early next year, the developers of the tower — Chicago’s Riverside Investment & Development and Dallas-based Howard Hughes Corp. — can move forward on demolishing the GGP building and replacing it with a 1.35 million-square-foot tower.

It will be the third office building taller than 50 stories to go up along the river during this development cycle, demonstrating the strength and duration of the ongoing run on brand-new space. Following a recession that ground development to a halt, many real estate experts projected there might only be enough anchor tenants to support one or two big, new towers.

But a steady improvement of the economy since the recession and a wave of companies moving workers downtown from the suburbs and outside the Chicago area have boosted leasing activity.

What’s unknown is the impact all the new towers will have on previous-generation buildings as they lose large tenants to new construction, leading to concerns that a glut of “shadow space” eventually will push up vacancy and drive down average rents.

Bank of America was represented in the lease by Steve Steinmeyer, senior managing director at Jones Lang LaSalle. The developers were represented by Drew Nieman, executive vice president at CBRE.

John O’Donnell, a former John Buck Co. executive who now leads Riverside, and Howard Hughes Executive Vice President Paul Layne said they are confident about their chances of lining up construction financing and additional tenants, although no additional deals are imminent. They declined to say how much the development is expected to cost.

The 800-foot-tall tower, designed by Goettsch Partners, gained Chicago Plan Commission and City Council approval in March. The design’s most distinctive feature is a tall overhang, supported by V-shaped columns, to shelter a 45-foot-wide riverwalk that will be open to the public.

The trapezoidal site is bordered by the river on the west, Randolph Street on the north, Washington Street on the south and Wacker on the east.

Already in this development cycle, Riverside has completed a 53-story tower along the river, just south of Hines Interests’ recently opened 52-story River Point. John Buck is building a 35-story tower on Franklin Street in the Loop.

Farther west, next to Old St. Patrick’s Church, a venture of White Oak Realty Partners and a CA Ventures affiliate is building a 20-story tower on speculation — without any leases signed in advance.

Several shorter office buildings, including McDonald’s future headquarters, are under development in the Fulton Market District west of the Kennedy Expressway.

GGP, formerly known as General Growth Properties, will be displaced from its longtime headquarters by next year. The mall owner already has been looking at space in other buildings, according to real estate sources, but a GGP spokesman declined to comment on its plans.

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