CHICAGO (CBS) — Something happened in downtown Chicago on Tuesday that has not happened in several years: a groundbreaking for a new office building.
Business leaders told CBS 2’s Derrick Blakley it’s a sign the economic climate is improving.
Tuesday morning, crews broke ground on a new 45-story office tower at Lake and Canal streets in the Fulton River District.
Groundbreaking for a new building is a familiar ceremony, but the start of construction on a new office tower isn’t something Chicago has seen in at least four years.
The project was first announced last summer.
Daniel Fournier – executive vice president of Quebec-based Ivanhoe Cambridge, a co-developer of the skyscraper – said “There’s not a single doubt in my mind that River Point will serve as a beacon for the economic resurgence that is already well underway.”
Ivanhoe Cambridge and Hines Interests LP are building the office tower on the banks of the Chicago River. It will feature 1 million square feet of space,
Mayor Rahm Emanuel said the project is a boon for the Chicago economy.
“A thousand new jobs in the city of Chicago building this building, that will house 3,000 office workers here in this building,” the mayor said.
Hines Chicago and Olnick Commercial Properties CEO Kevin Shannahan said the building was almost a victim of the 2008 economic meltdown, due to the collapse in real estate financing.
“The debt capital was eroding, but more importantly, our confidence in the global economy, as well as the U.S. economy, was eroding as well,” he said.
But now, confidence is back.
In addition to the River Point tower, other plans in and near downtown call for replacing parking lots at 601 W. Monroe St. with a 26-story office tower.
The construction lull in recent years has put office space at a premium in Chicago.
Jack Keenan, managing director at Jones Lang LaSalle, said, “That vacancy rate is about 7 percent. So, if you’re looking for a trophy new building, there is a pent-up demand for that type of stuff. How many big tenants will ultimately move into a brand-new building, or two new buildings? That remains to be seen.”
Just to calrify, there’s an ongoing glut of office space in the suburbs, and there’s no shortage in Chicago. There’s just a shortage of the most modern, top-level office space.
Still, if the economy continues to improve, the prospect is bright for more new office towers getting the green light from developers.