8.9 C
New York
Monday, October 18, 2021

Buy now


Fulton Market developer nears lease with McDonald’s vendor Havi Group – Crain’s Chicago Business

A west suburban supply chain management company that got its start helping McDonald’s with deliveries to its Chicago-area locations is following the Golden Arches to the Fulton Market District, bringing what will likely be hundreds of jobs downtown.

Havi Group is in advanced talks to lease around 100,000 square feet in the 11-story office building developer Sterling Bay broke ground on this month at 345 N. Morgan St., according to sources familiar with the negotiations. If the deal is completed, Havi is expected to move its headquarters from 3500 Lacey Road in Downers Grove, where it leases about 150,000 square feet today.

The pending move would add to an impressive run of recent office leasing in Fulton Market and continue a trend of suburban companies uprooting for downtown that defined the decade leading up to the COVID-19 pandemic. That urban migration fueled a downtown leasing bonanza until the public health crisis gutted office demand, with many companies rethinking their workspace needs after adjusting to life with remote workers.

Details of when Havi would move downtown and how many jobs will be based in Fulton Market are unclear, and a company spokesman couldn’t be reached. Havi has about 500 employees locally, according to tech job search resource Built In Chicago.

Sterling Bay, which began work on the 200,000-square-foot building last month after landing $100 million in construction financing, expects to complete the building in the third quarter of 2022. A Sterling Bay spokeswoman declined to comment when asked about the Havi negotiations.

Havi would join Naperville-based Calamos Investments and Northfield-based Medline as prominent local suburban companies that have made new commitments to office space downtown this year. That’s much-needed positive news for downtown office landlords, many of whom are having to get aggressive with perks and concessions to land tenants with demand still eroding and the vacancy rate in the central business district at a record high.

But downtown’s gain with Havi is a loss for the suburbs, where landlords are hoping the droves of millennials who have moved there from the city during the pandemic will ultimately lift demand for their buildings. Havi is slated to leave behind a well-located, recently renovated building in Downers Grove, the type of suburban office property that has been attracting big tenants more often than losing them over the past few years.

Havi’s lease at the 584,000-square-foot building, known as Esplanade II, runs through April 2025, according to real estate information company CoStar Group. But the property’s leasing team earlier this month began formally marketing Havi’s four floors in the building as available beginning in September 2022, according to CoStar. That suggests the company either executed an early termination option or bought out its Downers Grove lease.

A spokeswoman for Denver-based KORE Investments, which owns the 13-story building, couldn’t be reached. A KORE venture paid nearly $129 million in late 2019 for the former Sara Lee headquarters building—which was 97% leased at the time—in what remains one of the priciest deals for a suburban office building over the past three years.

Havi’s pending move shows the magnetism developers hoped McDonald’s would create in Fulton Market when it moved its global headquarters to the neighborhood in 2018. Suburban companies that work closely with the fast-food giant and are located near its former campus in Oak Brook may want proximity to the new McDonald’s headquarters, potentially drawing them to the flurry of newly built office buildings in Fulton Market.

Havi itself was created through a partnership with McDonald’s in 1974, when co-founders Ted Perlman and Bob Rocque struck a deal to handle supply deliveries for the chain’s Chicago locations, according to the Havi website. Havi, which got its name from the first two letters of the founders’ wives names—Harriette and Vivian—remains a key McDonald’s vendor today.


Related Articles

Stay Connected

- Advertisement -spot_img

Latest Articles