Commercial real estate firm Cresa will move its headquarters from Washington, D.C., to Chicago’s hot Fulton Market, and company leaders say their new space will be more than an office.
The new HQ will be a showpiece, they say, a place where visiting clients will see how modern offices can serve the needs and desires of their workforces — considerations growing more important as tenants adapt to changes brought about by the pandemic.
Cresa joins a parade of firms signing lease deals over the past year in Fulton Market, the former meatpacking district transformed over the past decade into the sleek home of Google and many of the city’s best restaurants. And Cresa chose a 21K SF space in 167 North Green St., a new 17-story trophy tower with a rooftop terrace developed by Shapack Partners and Focus that filled up with tenants even as the downtown struggled with a record-setting vacancy rate.
It is a building and a neighborhood that employees accustomed to the comforts of home will want to visit, according to Cresa CEO Tod Lickerman.
Courtesy of Gensler
167 North Green St. in Fulton Market
“Who wants to go to a sterile central business district?” he said. “This is an office that will be a magnet which people want to use and where they can work together with their colleagues.”
An analysis of how employees at the tenant-only advisory firm work, including their potential commutes, brought some surprises, and the new office will incorporate changes that transcend simply switching cities, he added. Cresa has about 50 Chicago-based employees but plans to grow to 120 over the next couple of years. About half will adopt hybrid work schedules, working part of the week at home and cutting down the company’s need for a large office footprint.
“We found that we only needed one-third of the space that we originally planned for,” Lickerman said.
That is a choice many downtown firms may have to make when their leases expire. Instead of traditional corporate workplaces, post-pandemic offices will be smaller nerve centers that are packed with top-flight amenities and supplemented by suburban satellite offices that provide some workers with shorter commutes.
“People are going to take less space, but at the same time, people are going to expect more from the space they do have, so there will be a movement to better buildings with better amenities,” Lickerman said.
That flight to quality is already apparent in Fulton Market. Developers added several million square feet in the past few years, but leasing stayed strong even during the worst of the pandemic, and the pace seems to be quickening.
“Fulton Market witnessed its best-ever quarter for leasing, as new development, and Class-A buildings across Downtown remain largely unaffected by the pandemic, enjoying high occupancy rates and commanding record-high rents,” a Q4 report by Savills said.
Cresa will spend 50% more per SF on its Fulton Market office than it typically did in the past, Lickerman said. Filled with Noel furniture and lounges, along with other private spaces, it is designed to be more like a clubhouse that resembles the nearby boutique hotels developed by Shapack rather than a typical corporate environment.
“The space is also going to be a laboratory where we can show off new technology,” Lickerman added. “It’s going to be a reflection of our people and our brand, so we also want our clients to use it, and we’ll even lend it out to nonprofits to use.”
Fulton Market District
Tricia Trester, Cresa’s head of global portfolio solutions, said the firm’s new space will also help fulfill its ambitious hiring plans.
“There is a concentration of wonderful restaurants, and people love the fact that it’s a new neighborhood with a lot of beautiful industrial buildings that have been rehabbed,” she said. “We’re looking to grow quite a bit over the next several years, and [Fulton Market] definitely has what a lot of people are saying attracts talent.”
Cresa has an office a few blocks away on Wacker Drive along the Chicago River, she added. Even though it is close to Fulton Market, the area lacks the same vibe.
“It’s a great area, but when you start thinking about what it offers clients and employees, like restaurants or even a place to just go and have coffee, it’s a bit sparse,” Trester said.
This isn’t the first time Cresa has moved its headquarters. In 2016, the company shifted from Boston to Washington, D.C., after hiring Jim Underhill as CEO. The Chicago move follows a string of Chicago-based hires, including Lickerman taking the CEO spot in early 2021, followed by Trester coming aboard, as well as Chief Financial Officer Kristin MacCarthy, general counsel Kathryn Ditmars and incoming President Greg Schementi.
The company has spread over the globe, with about 80 offices across the U.S., Europe and Asia. Trester said Chicago’s central location makes it easier to keep in contact with offices spread across so many time zones. The quick commutes between the city’s airports and downtown also make it convenient for visiting clients and employees.
Lickerman said he expects such qualities will keep drawing firms to cities like Chicago, even if office users shrink central offices so employees can work in suburban spaces or work remotely from cities like Nashville, Tennessee, and Austin, Texas. There will have to be changes, he said, especially within Class-B and Class-C buildings, which tenants are likely to leave in favor of highly amenitized Class-A spaces.
“There’s going to have to be a repositioning of the B’s and C’s,” Lickerman said. “But big cities like Chicago are still the most efficient places to do business, and at the end of the day, these cities will do very well.”