Posted Mar 30, 2022, 5:18 PM
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Join Date: Apr 2018
Location: Lincoln Park, Chicago
Posts: 120
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Some more details on that proposal for 401 S Wacker: https://www.costar.com/article/75818...-end-buildings
Quote:
Hines Plans 35-Story Office Tower Near Big Chicago Projects As Tenants Turn to High-End Buildings
Houston Firm Among Those Betting New and Significantly Renovated Properties Will Edge Out Competitors
Hines plans to build a 35-story office tower in Chicago across the Chicago River from the massive redeveloped Old Post Office and not far from a future project with a whopping estimated cost of $7 billion. The real estate firm is one of the latest developers to bet that new and extensively renovated buildings nationally will edge out rivals as more workers return to the office.
After recently updating the zoning for the 57,937-square-foot site at 401 S. Wacker Drive, Hines is seeking an anchor tenant and investment partners to kick off construction of an 800,000-square-foot tower in the southwest corner of Chicago’s Loop business district, Hines senior adviser Greg Van Schaack told CoStar News.
Details of Hines’ plans are emerging as landlords across the country make major upgrades to well-known existing buildings and draw up plans for glitzy new towers to lure in tenants after office vacancies reached record-high levels in U.S. markets during the worst days of the pandemic. In the biggest office market, New York City, statistics show that high-end buildings are filling up while less expensive competitors struggle to attract tenants.
San Francisco’s historic Transamerica Pyramid, New York’s 550 Madison Ave. and Chicago’s Aon Center are among the skyscrapers getting big investments, with landlords adding everything from outdoor plazas to art installations to differentiate their properties.
Hines’ newest Chicago plan is targeting a surface parking lot at the corner of Wacker and Van Buren Street, just south of the 65-story office building at 311 S. Wacker and not far from the city’s tallest skyscraper, 110-story Willis Tower at 233 S. Wacker. It is directly across the river from the Old Post Office.
A development group led by Chicago’s Development Resources has been working on plans to build a high-rise office building on the site, also known as 400 S. Franklin St., for about two decades.
Hines Likes the Timing
Despite the effects of the pandemic, which has led to many office workers staying home, Hines concludes there are several factors that make this an ideal time to take over the property and build on it.
Recent developments along the river have outperformed the overall Chicago leasing market, including Hines’ 52-story River Point at 444 W. Lake St. Other new trophy towers along the river are the 54-story tower at 150 N. Riverside Plaza, the 55-story Bank of America Tower at 110 N. Wacker and 50-story BMO Tower at 320 S. Canal St. Those projects have filled some of the few remaining development sites on and around Wacker, one of the city’s most prestigious corporate addresses.
Meanwhile, Blackstone Group recently completed a $500 million expansion of the lower levels of Willis Tower, and 601W Cos. recently wrapped up the nearly $1.3 billion redevelopment of the Old Post Office. Just south of Hines’ proposed site, Related Midwest plans a $7 billion megadevelopment called The 78 along the river between the South Loop and Chinatown, which is one of the largest real estate projects ever envisioned in Chicago.
“That part of the city has really been revitalized by the heavy investments in those projects, and this is one of the few remaining sites on Wacker Drive,” Van Schaack said. “Our vision is to build a tower that can attract a headquarters tenant that wants to take advantage of outdoor spaces and all the things a new building has to offer.
“It won’t be the tallest building on Wacker, but we plan to build something that’s architecturally attractive.”
Hines has yet to unveil renderings for 401 S. Wacker, but Van Schaack said the design will include outdoor spaces on every floor.
Hines has a deal to buy the land from the group that owns it for an undisclosed price, contingent on Hines securing tenants and investors to kick off construction, Van Schaack said.
Current owners include DRI and the owners of three other businesses in the real estate and construction industries, according to documents filed with the city. Those companies are Environmental Systems Design, Continental Electrical Construction and Power Construction.
DRI Chairman James DeRose did not immediately respond to a request for comment Tuesday.
Zoning Approved
Last week, Chicago’s City Council approved an update to the site’s zoning, after a previous planned development for an office tower on the site expired. The site reverted to the area’s underlying zoning, which means Hines does not need additional approvals for the density it has proposed for the site.
Hines would only need additional approvals if it decided to build higher on the site based on preferences of a prospective tenant.
Hines plans a 35-story office tower on a parking lot between a CenTrio chilled-water facility at right and the 65-story office tower at 311 S. Wacker Drive, seen to the left.
The parcel Hines plans to build on is just north of a CenTrio Energy facility that is used to cool downtown buildings. CenTrio’s low-rise building at 300 W. Van Buren is part of North America’s largest ice battery and chilled-water distribution system, which serves more than 48 million square feet of space from five plants in and around the Loop. The company was formerly known as Enwave North America.
CenTrio’s mostly windowless, nondescript structures produce ice during off-peak electricity hours at night. Ice is stored until it melts during traditional business hours, providing chilled water to downtown skyscrapers. The system is designed to reduce stress on the energy grid and lower the carbon footprint of buildings that use the chiller network.
Hines said its development will not affect operations of the adjacent CenTrio plant.
Houston-based Hines has been one of the biggest developers of trophy office buildings in Chicago for decades, including River Point, the 60-story tower at 300 N. LaSalle St. and the 60-story Salesforce Tower under construction now on the Wolf Point site on the river near the landmark Merchandise Mart, once the largest building in the world when it opened in 1930.
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