One of the many logistics tech companies on a hiring spree in Chicago has leased a new headquarters in the Loop, notching a win for a building and a part of the city that have seen few, new office deals during the COVID-19 pandemic.
Freight tech firm Loadsmart has leased nearly 35,000 square feet at 175 W. Jackson Blvd., where it will move its primary office from New York, the company announced. The new lease more than triples the 11,000 square feet the company has subleased from Crain’s parent Crain Communications since just before the pandemic began at 150 N. Michigan Ave.
The move makes room for Loadsmart to bolster its local headcount, which stands at just more than 100 employees today. A company spokesman said in July that Loadsmart expected to have 200 employees based in Chicago by the end of the year.
The firm joins a growing list of transportation logistics firms in Chicago snapping up office space amid a public health crisis that has driven up demand for their services. A surge in online shopping has forced many businesses to shore up their supply chains, pushing companies that help distribute online purchases to turn to software that Loadsmart and other freight tech companies provide.
Trucking company U.S. Xpress Enterprises, logistics software company Flock Freight, freight brokerage Nolan Transportation Group and third-party logistics provider MoLo Solutions have all signed or are close to finalizing leases for new, larger offices downtown.
Loadsmart’s deal also stands out as a new commitment to physical workspace at a time when many companies are downsizing their offices after adjusting to life with remote workers. For Loadsmart, the solution for now has been a mix of in-person and remote work, with employees “encouraged” to work in the office three days per week and remotely the other two, the company said in a statement.
“We believe embracing a hybrid model of working from the office and working remotely is the reality of today’s business environment,” Loadsmart Chief People Officer Bradford Wilkins said in the statement. “As we make that transition, we wanted to provide our employees with a space where they feel at home while ensuring our customers receive the best-in class technology expertise and exceptional services. The new office space provides that atmosphere.”
Downtown office vacancy reached a record high midway through the year, pushed up by tenants collectively vacating more office space in the central business district during the second quarter than they did during any full year on record, according to data from brokerage CBRE.
Losses in the Loop were the main culprit, led by Bank of America formally moving out of almost 700,000 square feet at 135 S. LaSalle St. The company moved late last year to a 500,000-square-foot office at the newly built skyscraper at 110 N. Wacker Drive.
Loadsmart’s lease is an important deal for Brookfield Properties, the Toronto-based real estate giant that paid $305 million in 2018 for 175 W. Jackson, a 1.4 million-square-foot building stretching along the east side of Wells Street between Jackson Boulevard and Van Buren Street.
The 22-story building was just 67% leased at the time and by July 2021 had fallen to 62%, according to a Bloomberg report tied to a $280 million loan on the building that was packaged with other loans and sold off to commercial mortgage-backed securities investors. The building’s net cash flow was $9.1 million in 2020, just half of the $18.2 million it owed in debt service, according to the report.
The Loadsmart deal helps bring 175 W. Jackson up to just more than 65% leased today, according to Chicago-based Telos Group, which oversees leasing at the building. The company’s move to the building helps validate the payoff of a major renovation Brookfield has taken on, including the addition of a new rooftop deck; redesigned lobby and gym; and two new, move-in ready offices Brookfield built out totaling more than 50,000 square feet. Loadsmart is moving into the larger of those two suites.
Online lender Enova International is the largest tenant in the building, with nearly 170,000 square feet, according to the Bloomberg report.
Jack O’Brien and Jeff Dowdell of Telos represented Brookfield in the lease. Cushman & Wakefield Managing Director Jordan Decker represented Loadsmart.