WIN: $60 Million Renovation Planned for Merchandise Mart

“Less than 10 years after the Merchandise Mart was crowned as the epicenter of Chicago’s tech scene, the historic Art Deco property is launching a major makeover to try to regain its shine.

“Even before COVID-19 hammered demand for downtown workspace, the owner of the hulking 3.7 million-square-foot building watched as the Old Post Office—a cavernous structure redeveloped in the Mart’s image—supplanted it as the more modern destination of choice for tenants seeking massive floor plates along the Chicago River.

“Now, with the public health crisis lingering and the rise of remote work pushing some big Mart tech tenants to try to shed space in the building, owner Vornado Realty Trust plans to plow tens of millions of dollars into renovations aimed at giving the building a new competitive edge. The project—said to cost more than $60 million, according to real estate brokers familiar with the plan—comes just a few years after Vornado completed a $40 million upgrade to the building.

“At the heart of what Vornado touts as ‘theMart 2.0’ is an overhaul of the first two floors, a high-traffic portion of the mammoth building. Brokers who represent tenants say the space needs more than the food hall and revamped main staircase done under the most recent renovation.

“Most visible from the outside will be a new ‘front yard’ with green space and landscaping along the Chicago River, according to a presentation from building leasing agency Stream Realty Partners that was obtained by Crain’s.

“Inside, Vornado plans a 27,000-square-foot tenant amenity and conferencing space, a “speakeasy” lounge and a 23,500-square-foot fitness center—the building’s second gym—on the second floor. Transformations are coming to the building’s entrance at the corner of Kinzie and Wells streets as well as its main south lobby. Vornado declined to confirm the cost of the plan, but is aiming to begin work this year with the goal of completing the renovation 12 months to 18 months after work begins.

“The Old Post Office and Fulton Market aren’t the only competition. Other buildings with similarly oversized floor plates but newer amenities than the Mart also offer compelling alternatives to tech tenants. The developer that turned the upper floors of the Marshall Field building into modern offices recently beat out the Mart, among other buildings, for the headquarters of online ticket marketplace Vivid Seats.” (Ecker, Crain’s Chicago Business, 1/20/22)

Read the full story at Crain’s Chicago Business

Merchandise Mart owner plans another massive reboot as tech tenants migrate to Fulton Market


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