Newmark to Relocate Chicago Office to Salesforce Tower

Strategic Insights -

Salesforce Tower, a 60-story skyscraper along the Chicago River, is poised to welcome Newmark, a New York-based real estate services firm, as a new tenant. Newmark is finalizing an agreement to sublease 24,000 square feet of space from Salesforce, which opened its office in the tower in late 2023. The relocation marks a trend of companies upgrading their workspace in the wake of the COVID-19 pandemic, with trophy-quality buildings like Salesforce Tower attracting significant interest from businesses seeking to encourage in-person work.

Key Takeaways:

  • Newmark is set to relocate its Chicago office to Salesforce Tower, a 60-story skyscraper along the Chicago River, and will occupy 24,000 square feet of space.
  • The relocation marks a trend of companies upgrading their workspace in the wake of the COVID-19 pandemic, with trophy-quality buildings like Salesforce Tower attracting significant interest.
  • Salesforce had previously leased 120,000 square feet of space in the tower but did not occupy it, marketing the space for sublease in 2023.
  • The deal would make Newmark the first company to occupy space that Salesforce leased but didn't use.
  • Newmark's relocation would help the firm keep pace with rival CBRE, which recently signed a deal to relocate its Chicago office to a nearby tower.
  • Salesforce's lease at Salesforce Tower Chicago runs through May 2040, according to a CBRE flyer marketing the space for sublease.
  • Newmark reported $61.4 million in net income last year, up from $42.5 million in 2023, according to regulatory filings.
  • Newmark's departure would open up more available space at 500 W. Monroe St., a 44-story West Loop office building.

Statistics:

  • Newmark is taking 24,000 square feet of space in Salesforce Tower.
  • Salesforce had previously leased 120,000 square feet of space in the tower but did not occupy it.
  • The vacancy rate among top-tier, or Class A, office properties at the end of the first quarter was just under 21%, according to research from brokerage CBRE.
  • Class B properties had an average vacancy of 32% at the end of the first quarter, according to CBRE research.
  • Newmark reported $61.4 million in net income last year, up from $42.5 million in 2023.
  • The total square footage of Salesforce Tower is 1.2 million square feet.

Sources:

  • Sources familiar with the matter
  • CBRE research
  • Salesforce's lease at Salesforce Tower Chicago
  • Regulatory filings for Newmark
  • Data from real estate information company CoStar Group