PayPal and Omnicom Group are the latest to join the growing sublease space in Chicago’s Loop.
The fintech company and marketing communications firm recently subleased a combined 122,000 square feet of downtown office space, according to a Transwestern report.
That doesn’t include the 240,000 square feet that tech giants Salesforce and Meta subleased in the spring, and the roughly 76,000 square feet that direct lender Golub Capital has listed.
PayPal is downsizing Merchandise Mart, which has a listing of nearly 54,000 square feet. Meanwhile, Omnicom Group is shedding about 69,000 square feet at 225 North Michigan Avenue, following in the footsteps of marketing industry peer Publicis Groupe. The latter listed 350,000 square feet of office space at 35 West Wacker Drive earlier this year, the largest sublease offering in the city. PayPal and Omnicom did not respond to requests for comment.
Transwestern found that as tenants adjust their office space needs to accommodate the continued hybrid and remote working trend, the amount of new sublease space on the market exceeded leases, hitting an all-time high of more than 8 million square feet.
A little more than 226,000 square feet of sublease space has been leased through secondary transactions through 2023, compared with 1.4 million square feet of new sublease space on the market so far this year, the report said.
According to Transwestern, the West Loop is the submarket with the most sublet space, accounting for about 40 percent of the market’s total square footage, or more than 3.2 million square feet. Central Loop accounts for approximately 21 percent of available sublease space, approximately 1.7 million square feet.
Several companies, including Cars.com, ArentFox Schiff and the YMCA of America, have pulled chunks of available sublet space off the market after failing to attract any buyers.