Accenture is New Anchor at Chicago Trophy Tower
- Jul 12, 2019
Accenture, a global professional services company, has leased an additional 152,454 square feet at 500 West Madison, a 40-story, 1.5 million-square-foot mixed-use tower in Chicago’s West Loop, giving the firm a total of 226,486 square feet and making it the building’s anchor tenant.
Wendy Katz, executive director, agency leasing for Cushman & Wakefield, who brokered the deal for owner KBS Real Estate Investment Trust III, said the building will bring all of Accenture’s Chicago-based employees into one location. Katz’ colleague, Matt Lerner, also represented KBS in the transaction. Accenture was represented by Kyle Kamin, Todd Lippman and Michael Dash of CBRE.
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KBS will rebrand the property as Accenture Tower and make changes to the lobby and amenity areas to reflect the new partnership with Accenture. The building is located above Ogilvie Transportation Center, one of the main train stations connecting downtown Chicago to the suburbs. The tower’s first two levels have 80,000 square feet of retail space with more than 45 stores and restaurants. Built in 1987, the property currently holds the record for the largest Class A, LEED Gold-certified building in Chicago for environmental sustainability.
KBS, a Newport Beach, Calif.-based REIT, bought the building in December 2013 from GE Capital Real Estate for $425 million, according to Yardi Matrix data. Although it had been completely renovated in 2005, the building underwent a multimillion-dollar renovation in 2015 that included its amenities and tenant services. A two-level, 14,000-square-foot fitness center with a basketball court and space for group exercise classes was added, along with a tenant lounge featuring air hockey, shuffle board and wine lockers.
Chicago office market
Cushman & Wakefield’s first quarter Chicago Office report noted leasing activity was strong for the first three months of the year, with 2.3 million square feet of new leases signed. The largest were renewals. United Airlines signed an 858,000-square-foot lease renewal at Willis Tower and USG Corp. renewed 221,000 square feet at 550 W. Adams. The largest new leasing deal for the first quarter was RSM McGladrey, which took 146,000 square feet at 30 S. Wacker.
The report stated three major drivers are propelling growth in Chicago’s CBD: technology firm growth, suburban to urban migration and absorption from coworking providers. WeWork leased 134,000 square feet in the first quarter at 167 N. Green and Convene signed three new leases totaling 185,000 square feet, including a lease for 110,000 square feet at 311 W. Monroe.
The CBD buildings, particularly Class A assets, were driving growth in the entire Chicago office market. The CBD reported overall absorption in the first quarter of 323,000 square feet and Class A absorption totaled 422,000 square feet. Demand for high-end space is increasing the construction pipeline. The city’s office market could see as much as 5.7 million square feet of new office space delivered within the next two years, according to Cushman & Wakefield.
KBS busy outside Chicago
KBS has recently been selling some of its office properties around the U.S. In June the REIT sold Thames Street Wharf, a 260,000-square-foot trophy office building in Baltimore’s Harbor Point development to Armada Hoffler Properties for $101 million. Several months before the sale, Morgan Stanley signed a lease renewal for 195,783 square feet of space at the eight-story building.
In May, KBS sold a 579,846 square-foot office complex in Clayton, Mo., to Lingerfelt CommonWealth Partners for an undisclosed price. KBS had owned the two-building Class A property since 2010. Also in May, KBS sold Emerald View at Vista Center, a 139,471-square-foot, two-building Class A office property in West Palm Beach, Fla., for $40 million to a partnership led by Vanderbilt Office Properties.