Groupon terminated its headquarters lease early, leaving a huge void in Sterling Bay.
The digital coupon company paid a $9.6 million termination fee to end its 300,000-square-foot lease at 600 West Chicago Avenue on Jan. 31, 2024, even though it was due to expire in Jan. 2026, Crain’s Report.
Groupon’s interim CEO, Dušan Šenkypl, has been struggling for a while now. The company has offered the full sublease of the 1.6 million-square-foot building through 2021, and with remote work trends still intact amid the pandemic, Groupon is accepting its fate.
“Teamwork and collaboration still require face-to-face time, but new tools and technologies also allow effective and efficient hybrid work,” Groupon’s Emma Coleman told the press. “With all of these factors in mind, we’re always evaluating office space to make sure our setup meets the requirements of us and our team.”
Once Groupon leaves 600 West Chicago, the building’s occupancy rate will drop from 96 percent occupancy to less than 80 percent, close to the downtown office average of about 78 percent.
Complicating Groupon’s real estate needs, the company sue for absorptionone of the tenants subletting its space in January for $1.5 million, claims the tech company hasn’t paid since July.
The lease termination is another blow to Chicago’s struggling office market.Rising interest rates, rising construction costs and a string of company layoffs led to record high The citywide vacancy rate topped 22% last quarter.
Groupon’s early exit also exacerbated the problems facing the Sterling Bay building. In March, the company led by Andy Gloor suffered $515,000 lawsuit Farehouse Market, a retail tenant and food service operator at 600 West Chicago, suffered from a lack of business from tenants in the building.
Elsewhere in Chicago, Sterling Bay is looking Refinancing options for major Lincoln Square developmentGloor blamed the government of outgoing mayor Lori Lightfoot for delays in the project.
— Quinn Donoghue
