McDonald’s Heads Back to Chicago
- Jun 15, 2016
Chicago—Saying it wanted a state-of-the-art headquarters to move its business forward, McDonald’s is leaving behind its longtime home in the Chicago suburbs and heading into new space in one of the city’s hottest neighborhoods in the West Loop.
The fast-food giant, which has had its 88-acre corporate headquarters in Oak Brook, Ill., for nearly 40 years, confirmed this week it has leased space at 1045 W. Randolph at the site of Oprah Winfrey’s former Harpo Studios. Chicago-based developer Sterling Bay Cos. bought the 3.5-acre, four-building campus in the Fulton Market submarket for $32 million in 2014. Winfrey stopped taping her show there in 2011 and closed the studio at the end of 2015.
McDonalds President & CEO Steve Easterbrook said Monday the company would move to downtown Chicago by the spring of 2018. While he didn’t provide details, he said in a prepared statement that it planned to “transform the space into a modern setting that fosters collaboration and connectivity.”
Easterbrook, who has been trying to rejuvenate the company, described the move as “another significant step in our journey to build a better McDonald’s.”
“This world-class environment will continue to drive business momentum by getting us even closer to customers, encouraging innovation and ensuring great talent is excited about where they work,” he added.
McDonald’s was headquartered in Chicago from 1955 to 1971. In 1978, it moved to its custom-built suburban campus which houses a training center known as Hamburger University, office space for 2,000 employees, as well as a hotel and test kitchens. Easterbrook has reportedly been looking to move the company out of Oak Brook for nearly a year. Crain’s Chicago Business, which was the first to report the news, said McDonald’s had backed out of a previous plan to lease space at Prudential Plaza about nine months ago.
Rick Hernandez, chairman of the board of McDonald’s, said the announcement was about more than just a new location.
“It is an important investment in our people as we look to create a state-of-the-art company headquarters they can use to move our business forward for many years to come,” he said in a statement.
McDonald’s did not receive any incentives to locate in Chicago. It is following the move of several large corporations who are either setting up headquarters in Chicago or opening up large offices there to appeal to millennial workers who prefer to live in the city.
“McDonald’s, welcome back to sweet home Chicago,” stated Mayor Rahm Emanuel. “McDonald’s has identified the keys to success to today’s global market, talent, technology and access to transportation networks, and they recognized these as Chicago’s strengths.”
The developer is expected to give details about the redevelopment of the Harpo Studios site at a June 22 meeting hosted by the West Loop Community Organization and Alderman Walter Burnett Jr., according to DNAInfo.
Sterling Bay, founded in 1986, is a real estate investment and development company that has focused the majority of its activities in the Near West Side of Chicago. In addition to the Harpo Studios site, the firm has redeveloped 111 N. Canal, 400 S. Jefferson and 1000 W. Fulton, the former Fulton Market Cold Storage building that was turned into 525,000 square feet of loft-style office and retail spouse and is now Google’s Chicago headquarters.
In July 2014, a Sterling Bay official told Commercial Property Executive that J.P. Morgan Asset Management had become a joint venture partner and would be co-developing several major projects, including Harpo Studios. The partnership also included future investments and developments in Chicago and elsewhere.
Meanwhile, McDonald’s will begin marketing the Oak Brook campus. Oak Brook Village Manager Rick Ginex told the Chicago Sun-Times that McDonald’s owns several parcels in the community totaling about 150 acres.
“I understand they’ll be working with a broker on their property over the next year and a half and we’re hoping it’s an opportunity for another corporation to move in,” he told the newspaper.
Oak Brook will have competition.
JLL reports leasing activity has been strong in the Chicago suburbs so far this year, but “the suburban vacancy rate will continue to battle against an abundance of available large blocks of space.”
The suburban vacancy rate for the first quarter was 18.9 percent, according to JLL’s most recent office report. But the good news was that large tenants had renewed leases, particularly several healthcare and medical tenants, the report noted.