Here’s Why Bank Of America Wants To Be On Wacker
Bank of America has agreed to be the anchor tenant in a new 51-story office tower on Wacker Drive because it wants all its local employees who interact with customers to work in the same place, the bank’s top Chicago executive said today.
The Charlotte-based bank confirmed Crain’s earlier report that it signed a lease for about 500,000 square feet in the proposed 1.35 million-square-foot high-rise at 110 N. Wacker Drive, a deal the project’s developers say is big enough for them to break ground.
The bank picked the Wacker Drive project for its flagship Chicago office over other buildings, including Willis Tower and a proposed tower one block east.
“It’s a beautiful building,” said Paul Lambert, the bank’s market president for Chicago. “It’s very close to transportation. It puts us in a great position around the revitalization of the riverfront.”
The bank plans to move its commercial bankers, investment bankers, wealth advisers and other employees that deal with customers to the new riverside tower, which will replace a squat building that now serves as the headquarters of GGP, a shopping mall owner. Putting its client-facing employees all in one place will allow it to serve its customers better and open up new growth opportunities, Lambert said.
“That was the driving force,” he said.
The move could involve “several thousand” employees, Lambert said. The bank hasn’t made a final decision on what to do with its existing downtown office space, which includes 827,000 square feet at 135 S. LaSalle St. and 322,000 square feet at 540 W. Madison St., he said.
Asked whether the move would result in a net reduction of jobs for the bank in Chicago, Lambert demurred but said that was not the reason for the decision.
“This not a consolidation strategy,” he said. “This is a growth strategy and a collaboration strategy.”
The project’s developer, a joint venture between Chicago-based Riverside Investment & Development and Howard Hughes, a Dallas-based real estate investment firm, received the City Council’s approval for the building in March. Designed by Chicago-based architecture firm Goettsch Partners, the building is across the river from two new office towers. The one at 150 N. Riverside Plaza was also built by Riverside.
CONFIDENT IN FINANCING
Paul Layne, executive vice president at Howard Hughes, and Riverside CEO John O’Donnell expressed confidence that they’ll be able to secure construction financing as a result of the Bank of America lease. Lenders typically won’t finance a big office project unless its developer lines up tenants for some of its space. O’Donnell noted that the Bank of America lease covers about a third of the Wacker project’s space, but he scored a construction loan for his 1.1 million-square-foot building at 150 N. Riverside when it was just 28 percent pre-leased.
“I don’t anticipate any problem whatsoever lining up financing,” O’Donnell said.
The construction loan will probably account for 60 to 65 percent of the project’s cost, which O’Donnell and Layne declined to disclose. They expect to break ground in second-quarter 2018 and complete construction in late 2020.
Bank of America will occupy about 15 floors on the bottom of the high-rise. Now the developers must find tenants for the rest of the space, a job that should be a lot easier since they’ve nabbed an anchor tenant.
“This is very, very helpful,” O’Donnell said.
Drew Nieman, executive vice president at CBRE, represented the developers in the lease with Bank of America. A team led by Steve Steinmeyer, senior managing director at Jones Lang LaSalle, represented the bank.