The timing of any move in the building is unclear and negotiations could still break down. But the new office would be double the size of the 40,000 square foot headquarters across the river at 222 N. LaSalle St., where it has been since 2015. In early 2020, Avant separated its technological division, Montant, which today leases 80,000 square feet in the building on rue LaSalle.
If completed, the Merchandise Mart deal will stand out as a major office expansion and a significant new commitment to physical office space as many companies embrace a new balance between in-person and remote working. – and don’t know what that means for their desktop footprint. While rental activity has improved over the past six months compared to the start of the pandemic, the vacancy rate remains near an all-time high due to businesses reducing space when they have the possibility of terminating or restructuring their leases.
Any business hoarding office space is welcome news for downtown office owners, some of whom are on the brink of financial distress as more leases expire nearly two years into the pandemic. .
The Avant lease would be a particularly big win for New York-based Mart owner Vornado Realty Trust, which has seen some of its major tenants leave in recent years and others looking to reduce their footprint in the building through the subletting bias.
Vornado plans to begin work this year on a major renovation of the first two floors of the building, hoping this will help it compete with the Fulton Market District and other new and renovated office buildings in the city center so demand remains weak.
The Mart was about 89% rented at the end of the third quarter, much better than the 80% average for downtown office buildings. But it’s also the building’s lowest occupancy rate since at least 2007, according to Vornado’s annual reports.
The building saw auto insurance claims software provider CCC Intelligent Solutions vacate its 125,000 square foot office in the building after more than 25 years for a new Fulton Market office. And media conglomerate Publicis Groupe left a similarly sized office in the building in 2018.
But the Mart’s amenities revamp plan now appears to be catching the attention of some tenants in the market, especially as more businesses prioritize office space in buildings that will help compel their employees to work in person rather than from home. The Avant deal would come on the heels of Medline Industries signing a 12-year, 51,000-square-foot lease in the building for its new downtown office.
Spokespeople for Vornado and Avant declined to comment when asked about the lease negotiations.
Avant now has just under 300 employees in Chicago, according to the company, up from 247 when Amount spun off. It’s unclear how many Avant jobs plan to add in conjunction with the office expansion, though the company has nearly 40 Chicago-based job postings on its website.
It’s also unclear how long Avant has left on his lease at 222 N. LaSalle St., which is owned by a New York-based Tishman Speyer company. Avant became one of the building’s largest tenants in 2015, when it became Chicago’s fastest-growing startup since Groupon and leased about 80,000 square feet amid a major surge in sales. hires. Avant retained half of that space after the Amount spin-off.
The 1 million square foot Tishman Speyer building is nearly 86% leased today, according to real estate information firm CoStar Group. A spokesperson for Tishman Speyer had no comment.
Avant has issued more than $7.5 billion in loans and raised $650 million in equity since its launch in 2012. The company generated nearly $265 million in revenue in 2020, according to the most recent list of Crain of the biggest private companies in the Chicago area, and made a big investment last year in the world of digital banking by acquiring San Francisco-based Zero Financial.
Brokers Brad Serot and Paul Reaumond of CBRE’s Chicago office represent Avant. Andrea Saewitz, Wendy Katz and Ben Cleveland of Stream Realty Partners are overseeing the rental of the Mart.