Central States Renews 172,000 SF At Riverway Central

ROSEMONT, IL-Central States Pension Funds has signed an 11-year lease renewal for 172,000 square feet at Riverway Central. The employee retirement and benefits provider has been headquartered out of the 313,500-square-foot office building since it was originally built for them in 1989.

The new lease represents an almost 40,000-square-foot downsize for the company, which, at one time, occupied the entire facility. Central States has decreased its space there gradually in the past two decades since moving in; until recently, occupying 211,000 square feet, according to Steve Schnur, SVP with building owner Duke Realty Corp.

“The location works fantastically for them, and our relationship had a great deal to do with it because they enjoy being a tenant in a Duke building,” Schnur tells GlobeSt.com. “I don’t think they wanted to go through the headache of a move, but we had to cut a market deal to get them to stay.” The asking lease rate in the Riverway complex is around $18.50 per square foot, net, he says.

The office complex consists of three buildings, Riverway East, West and Central, which offer about 875,000 square feet in total. Located in the O’Hare submarket close to Interstate 90, the complex is about 90% occupied overall, while Central States’ building, Riverway Central, is around 85%. Duke bought the Riverway complex in 2005 from Simon Property Group in a deal sources valued at nearly $162 million.

Occupancy rates in the O’Hare office submarket average around 78%, with asking lease rates around $29 per square foot gross, according to Cushman & Wakefield’s year-end market report.

“The O’Hare submarket’s occupancy is about average with other markets,” Schnur says. “The vacancy gets higher as you move down in class, which is good for us because class A office vacancies are in the low to mid-teens. But as you go down, vacancies get higher and class B and C buildings are really struggling.”