If the deal goes through, the NFA would move its headquarters to the 50-story building at 300 S. Riverside Plaza, where its more than 70,000 square foot lease makes it one of the property’s largest tenants. The NFA’s current lease expires in August 2023, and the owner of the Riverside building then markets its space as available to new users, according to real estate information firm CoStar Group.
The lease would represent a valuable victory for co-developers of the BMO tower, Chicago’s Riverside Investment & Development and Convexity Properties. After the duo landed BMO Harris Bank in 2018 as the tower’s anchor tenant and later added law firms Chapman & Cutler and Faegre Drinker Biddle & Reath to their roster, the public health crisis has crippled news leasing activities and ultimately pushed the downtown office vacancy rate to a record high last year.
The tower was completed earlier this year with just under half the office space leased, creating an urgent challenge for developers to fill the building. Now, they’re about to take a key step toward that goal with the NFA, which is set to take up nearly 60,000 square feet.
Spokespersons for the NFA and Riverside declined to comment.
The deal would also underscore the trend for newer and more recently updated buildings to win the bulk of rental activity during the pandemic. About 75% of office moves that took place in the last nine months of 2021 were to a higher quality building, according to data from brokerage CBRE.
Many companies have turned to such buildings as they seek to force employees to work from the office rather than remotely. And the high vacancy rate and low demand have made it more affordable for tenants to consider moving to newer, higher quality spaces.
Yet the NFA is set to leave behind a building that underwent a massive $10 million renovation just a few years ago after JPMorgan Chase moved out and left about half of the property vacant. The upgrades helped Boca Raton, Fla. owner Third Millennium Group secure new leases with Peapod and Evolent Health, among others, bringing the building to 96% leased at the end of 2019.
Cars.com is now the largest tenant in the building, with a lease of nearly 160,000 square feet that runs through June 2031, according to CoStar. A spokesperson for Third Millennium Group could not be reached.
The NFA is poised to stay in a southwest corner of the Loop that has been a magnet for office tenants in recent years, boosted by the nearly $1 billion redevelopment of the dilapidated former post office into a modern office building. This project, which is now almost fully leased, combined with a nearly $700 million renovation of the Willis Tower and the development of the BMO Tower next to Union Station, is expected to transform the once sleepy pocket of the office market in the downtown into an emerging hotspot.
The NFA serves as a watchdog for brokers and trading firms in the derivatives market, helping to police the industry on behalf of the Commodity Futures Trading Commission. The NFA experienced dramatic growth after the global financial crisis, when it began overseeing dealers and major players in the highly secretive swaps market.