CHICAGO | Post Office Redevelopment

[ithakas]

Originally Posted by k1052

The only real argument I see here against office space is that the floor plates are big. If a tenant is taking 500K or 1M square feet they'd be stacked over a bunch more floors in an office tower anyway so the time to walk the space seems less important. Most people will mainly interact with their own work groups anyway and probably utilize central shared conference facilities.

The renovation will surely be very expensive so the new landlord's mind will be on who can pay the most rent. Seems to me the answer is huge companies looking for lots and lots of class A office space.

Also, aren't the less vertical, wide floor plates of the Post Office similar to the way suburban office campuses are structured, even for Silicon Valley companies?

[MODERATOR EDIT]

Also, a developer might use your blueprint, Sentinel, and make Walgreens occupy the southern third, a hotel or other biotech company occupy the northern third, etc.

[sentinel]

Originally Posted by k1052

The only real argument I see here against office space is that the floor plates are big. If a tenant is taking 500K or 1M square feet they'd be stacked over a bunch more floors in an office tower anyway so the time to walk the space seems less important. Most people will mainly interact with their own work groups anyway and probably utilize central shared conference facilities.

The renovation will surely be very expensive so the new landlord's mind will be on who can pay the most rent. Seems to me the answer is huge companies looking for lots and lots of class A office space.

Any potential renovation of this building would not be classified as Class A. That is primarily for new construction office space.

http://www.areadevelopment.com/Asset...26281155.shtml

If a large, multi-national like McDonalds is looking for class A office space, the Old Main Post office would not be the place to look, if it is developed as such. And any shrewd developer will never spend potentially hundreds of millions of dollars renovating this beast of a building for potentially Class C office space, considering they wouldn't be able to charge that much for leasing. Somehow, my gut tells me this building will not be converted to office space, it just doesn't make sense.

[k1052]

Originally Posted by ithakas

Also, aren't the less vertical, wide floor plates of the Post Office similar to the way suburban office campuses are structured, even for Silicon Valley companies?

Yea, most companies are sprawled in multiple buildings also. Some by design and some by necessity. Out in the SV most of the tech companies are sprawled over multiple towns as well because it is impossible to assemble the requisite real estate and entitlements to put everybody on one campus.

[k1052]

Originally Posted by sentinel

primarily

But not exclusively.

[ardecila]

Not exactly. The Apple Donut actually has a pretty slim lease depth; nobody is very far from a window. The Post Office would have a big problem with that.

Actually, the talk of pharma companies actually brings up an interesting point. Could the Post Office be a good building for pharma companies to mix office and lab space? The portions deep within the building would be great for lab space that doesn't need or want access to daylighting, while the building is so huge that you could cut giant chases into it for all the mechanical and ventilation needs. Depending on the ceiling heights, you could even do a Salk Institute and build interstitial space to allow future flexibility.

If the whole point of open-plan offices is to encourage flow and feedback between different employees and departments, mixing office and lab space would do just that for the pharma sector even though their business model has traditionally had two separate sets of facilities.

[sentinel]

Originally Posted by k1052

But not exclusively.

True, but definitely not for the middle third.

[VKChaz]

Originally Posted by k1052

Yea, most companies are sprawled in multiple buildings also. Some by design and some by necessity. Out in the SV most of the tech companies are sprawled over multiple towns as well because it is impossible to assemble the requisite real estate and entitlements to put everybody on one campus.

Yes, some even use shuttle buses btw buildings.
A common question for high-growth companies is whether there will be space to expand.

[ithakas]

Actually, the talk of pharma companies actually brings up an interesting point. Could the Post Office be a good building for pharma companies to mix office and lab space? The portions deep within the building would be great for lab space that doesn't need or want access to daylighting, while the building is so huge that you could cut giant chases into it for all the mechanical and ventilation needs. Depending on the ceiling heights, you could even do a Salk Institute and build interstitial space to allow future flexibility.

I love this idea, particularly since I feel that the West Loop (north of Fulton Market PMD) would be a great place for the local pharma companies to set up office + research labs.

[Kngkyle]

Originally Posted by sentinel

Any potential renovation of this building would not be classified as Class A. That is primarily for new construction office space.

This building would essentially be new construction though. And the sheer size of it allows for ample and unique amenities. For example, to combat the distance factor that has been mentioned, they could create a divvy-like system with bike lanes circling the building. It could even have ramps connecting the floors. Millennials would love that shit. The office potential here is as huge as the building itself.

[Mr Downtown]

Originally Posted by ithakas

To answer your question, no, Mr. Downtown does not like the mayor.

That's news to me.

[SamInTheLoop]

Originally Posted by ithakas

I love this idea, particularly since I feel that the West Loop (north of Fulton Market PMD) would be a great place for the local pharma companies to set up office + research labs.

Only problem (and it's a massive one) with that (this also applies to all these developers that have these grand Fulton Market, River West, Goose Island, etc office plans) is these are not focal points for transit (regional and city)....I'm not talking about the odd cta line, or a few bus routes. I'm talking about a focal point/nexus of transit lines/modes. Those guys are overpaying for office use, and will need to switch to residential/mixed use/hotel at some point, by and large. For the most part, niche office only in those locales.......the center of gravity for future net new office addition in not just the city of Chicago, but now clearly the entire region, will be within walking distance of the commuter stations - it's where all expressways and train lines (including the cta lines) in the city and suburbs, and bus routes, etc - (and dedicated bike lanes - for that matter) come together and why that's where you put your office.....

[SamInTheLoop]

Originally Posted by k1052

But not exclusively.

I'd even go much further than to state not exclusively. New construction is a super stratified group at the top of Class A.......Class A probably comprises 40%+ of all office inventory in downtown Chicago.........I see almost no reason why a top notch renovation project into functionally modern office space couldn't be designated A (or, if there's some technical reason why not - couldn't get similar rents to avg Class A space).....

[SamInTheLoop]

Originally Posted by sentinel

Any potential renovation of this building would not be classified as Class A. That is primarily for new construction office space.

http://www.areadevelopment.com/Asset...26281155.shtml

If a large, multi-national like McDonalds is looking for class A office space, the Old Main Post office would not be the place to look, if it is developed as such. And any shrewd developer will never spend potentially hundreds of millions of dollars renovating this beast of a building for potentially Class C office space, considering they wouldn't be able to charge that much for leasing. Somehow, my gut tells me this building will not be converted to office space, it just doesn't make sense.

Your'e dead wrong on the prospects for adaptive reuse to office. What exactly do you think Sterling Bay has in mind for it?!

Uh, can you say Merchandise Mart? Think about that building - it's floor plate size/shape, and the incredible evolution that has happened within (and will continue to over the next couple years) over the last few years. Do you sense any similarity with Post Office and its prospects? Large suburban and out of town corporations, technology co's, etc are fighting each other to take up what little available space remains in the Mart.

Granted, the capital expenditures will be greater at the Post Office, but there is simply no better economic use/plan than to convert to very large floorplate office space, and I have a feeling - just a little inkling - that Sterling Bay will be able to pull this one off......everything they've done over the last 5-6 years has prepared them for this moment, this project - by far their largest and most ambitious yet.....

[sentinel]

Originally Posted by SamInTheLoop

Your'e dead wrong on the prospects for adaptive reuse to office. What exactly do you think Sterling Bay has in mind for it?!

Uh, can you say Merchandise Mart? Think about that building - it's floor plate size/shape, and the incredible evolution that has happened within (and will continue to over the next couple years) over the last few years. Do you sense any similarity with Post Office and its prospects? Large suburban and out of town corporations, technology co's, etc are fighting each other to take up what little available space remains in the Mart.

Granted, the capital expenditures will be greater at the Post Office, but there is simply no better economic use/plan than to convert to very large floorplate office space, and I have a feeling - just a little inkling - that Sterling Bay will be able to pull this one off......everything they've done over the last 5-6 years has prepared them for this moment, this project - by far their largest and most ambitious yet.....

What makes you think Sterling Bay is still in the game? Considering how anti Lucas Museum they've been, which is a huge priority for Rahm, don't you think it's a conflict of interest for the City to seize the Old Post Office just for Sterling Bay to redevelop it? Has there even been any news on how the City is parterning with (if anyone yet) for redevelopment?

Also, give me a break - you and I both know that while the north and south ends of the post office could potentially be converted to office/hospitality (see my original post for reference), the main, middle third is not at all an apples to apples comparison with the Merchandise Mart - what worked there is not at all guaranteed to work for the bulk of this building. The Mart has been in operation since even before it became the interior design hub of the country, let alone now as a tech incubator. The Post office has been vacant since 1991-93. Big difference.

[SamInTheLoop]

^ I saw something about Sterling Bay being a sponsor for Friends of the Parks, but if that's what you're talking about (even if some of their execs are against the Lucas - perhaps they are - I have no idea), this isn't a conflict of interest (interests are aligned - the city wants the post office redeveloped - badly, and Sterling Bay wants to redevelop it - badly. That the city and Sterling Bay potentially disagree on some other looming issue would not be a factor that knocks them off the top of the list of potential post office post-seizure acquirers/redevelopers, particularly as they are arguably (or perhaps even inarguably) the best/most directly-qualified. This is not to say that the mayor or underlings won't speak with party on this other issue, and try to persuade them, or what not......but it's certainly no deal-breaker, by any stretch.....

Everyone knows the project will be a challenge - everyone has known that for some time. Everyone also knows it will be capital-intensive. My point with the Merchandise Mart comparison stands very well, however - think of it in terms of demand for a structure of this massive size and shape - you have a proven demand source out there for it - and that is adaptive reuse to modern office in a historic structure......it's the only use I can see that has a solid fighting chance of being both economically successful, and also completely re-energizing the entire corner of the Loop (or whatever you want to call this area - near sw loop, etc.).........show me another use - any other use where there is some sort of proven demand model for a structure of this size/shape that can accomplish both goals from above......? All ears.....

[SamInTheLoop]

Originally Posted by urbanpln

The City will move forward to acquire as quickly as possible, but it won't happen overnight. Davies will fight, and eventually lose unless he partners with someone, or sell. By the time it's settled, this development cycle will be over.

I would not be so convinced that it's going to 1) drag out as long as you suspect, and 2) most definitely, that it will drag out longer than this cycle....

On 1, the law is so clearly on the side of the city here (realize that a well-funded legal team can delay, obstruct etc nevertheless)....that my bet is it moves faster than you believe it's likely to

On 2, I think we have another 3, possibly 4 years left in this cycle, outside chance of 5........it's definitely going to surprise many folks, I'm assuming potentially yourself as well, with its eventual longevity.....

[ithakas]

Representatives of International Property Developers, the British firm that owns the hulking West Loop structure, told the Chicago Community Development Commission that Mayor Rahm Emanuel's plan to use the city's eminent domain power to take over the property was unfair and unjustified. But their arguments rang hollow with the commission, which approved proposals authorizing the city to buy the Post Office and seek redevelopment proposals for it.

http://www.chicagobusiness.com/reale...-with-new-york

[Kngkyle]

Tough shit Davis, you had your chance and you blew it. Next.

[Mr Downtown]

From the I'll Believe It When I See It Department

The owner of the Old Post Office is in advanced talks with a New York investor that's interested in developing the long-vacant building, but the city's push to seize the property could kill the deal, a representative of the property told a city panel today.
***
Since 2014, IPD has been trying to find a buyer or joint venture partner that would redevelop the building, and is close to a deal with a New York investor with “impeccable status and stature,” Charles Hubbard, an IPD consultant, told commissioners. He declined to identify the investor, but said the firm has other holdings in Chicago.
***
“We have almost in place really good news, and this action could possibly jeopardize that,” Hubbard said of his mystery deal.

Story from Crain's

[SamInTheLoop]

^ Nope, wrong department I'm afraid. It's straight from the "Bullshit" department, actually.





No turning back, no addition time, no nothing here. (Solis seemed to be opening the window for that, but I have a feeling he may have gotten a sharp foot in the nuts from Emanuel - or will be getting one soon, because any such window needs to be slammed shut immediately)......time's up for Davies.