Brewing company Molson Coors signed a deal to lease several floors in BMO Tower at 320 S. Canal St., one of the West Loop’s newest skyscrapers, and move its headquarters next summer from 250 S. Wacker Drive.
The move could signal a rise in downtown leasing as more workers return to the office and companies seek out buildings with the best amenities.
“The newest buildings seem to be performing better because the employers view them as helping employees get back to work,” said Drew Nieman of Riverside Investment and Development, which along with its partner Convexity Properties, launched construction of BMO Tower in 2019.
BMO Financial Group agreed to occupy about one-third of the 1.5 million-square-foot, 52-story tower immediately south of Union Station long before it opened last summer, but leasing fell off drastically when COVID-19 shuttered downtown.
“Everybody was kicking the can down the road because they didn’t know how much space they would need,” Nieman said. “Now, I feel like things are starting to pick back up.”
In addition to Molson Coors, which will occupy more than 80,000 square feet on the 34th through 36th floors, financial services company Antares Capital signed a deal with Riverside last month to lease about 87,000 square feet, bringing BMO Tower up to nearly 80% leased.
Many older downtown properties still don’t have enough amenities to attract tenants, including the outdoor spaces now highly valued by workers, according to Riverside Executive Vice President Rafael Carreira. BMO Tower includes outdoor terraces and a 1½-acre park on the building’s west side, called The Green, where a farmers market is held on Tuesdays. Molson Coors’ space will include a brewpub, a private outdoor patio and an internal staircase connecting its three floors.
“The building really provides an atmosphere where people can interact with others,” Carreira said.
Molson Coors’ new home will help the company continue its post-COVID-19 office schedule, according to a company spokesman.
“We’ve had a hybrid schedule in our corporate offices since October 2021, and our team has the flexibility to work three days a week in the office and two days from home,” he said. “The approach has worked quite well, and we are excited to move into a modern space that allows for strong collaboration, and which offers top-flight amenities.”
Carreira estimates that Tuesday through Thursday, BMO Tower sees more than 60% of the foot traffic it did before the pandemic, and although Mondays and Fridays remain slow, activity is picking up.
“We are seeing steadily increasing attendance with all of the properties we’re involved with in the city,” he said.
The overall picture for downtown remains dire. Vacancy hit more than 22% this year, a historic high, reaching more than 30% for Class B office buildings in the Central Loop, according to Colliers International. And even when companies sign new leases, hybrid schedules often mean they need less space. But Colliers anticipates a turnaround, at least for the new towers lining Wacker Drive, the Chicago River and other West Loop streets.
“It is anticipated that West Loop Class A space activity will continue to increase, and vacancy will ease in Class A buildings,” the firm stated in its first quarter report.
“It never fails, it’s the newest and best spaces that stay the most active and fill up first,” Nieman said. “And that makes it tough on buildings 20 or 30 years old.”
Carreira said prospective tenants continue touring BMO Tower.
“We will hopefully have more leases to announce in the near future,” he said.
