An area once notorious for its prostitutes and dilapidated warehouses has now become one of the hottest office markets in the United States. Chicago’s River North was an industrial and storage …
An area once notorious for its prostitutes and dilapidated warehouses has now become one of the hottest office markets in the United States.
Chicago’s River North was an industrial and storage hub for more than half of the 20th Century. In the 1960s, though, the area began to lose its importance in the industry, eventually becoming a skid row wasteland in the ’70s.
It was around that time, when the area was full of drug dealing and prostitution, that developer Albert Friedman began to buy buildings there, renting them first to artists and photographers. He was even the one who gave the area its new name — River North — in an attempt to make potential buyers forget the area’s seediness.
“There used to be a time when you didn’t want to walk through River North after dark,” said the business association’s chief executive officer Sharon Romack. “Now River North is the place to be after dark.”
Over time, the North River area transformed into one of the trendiest spots not only for living, dining, and entertainment, but also for tech companies. Today, its mix of refurbished industrial buildings and new construction include apartments, condominiums, nightclubs, cafes, hotels, and office spaces. Yelp Inc. — the San Francisco-based business directory and review site — is only one of the latest tech companies to lease a space in the area.
North River’s drastic metamorphosis is due largely to the nation’s technology boom, as the industry’s job growth is increasing demands for office spaces. Tech startups and expanding firms alike are drawn to the area’s historic buildings, which are not only aesthetically pleasing and close to mass transit stations, but are quite functional, also. Many of the buildings have been refurbished, allowing tech companies to easily maintain the proper temperature and humidity of the facilities — an all-too-crucial requirement for IT system reliability.
Now, the area has the lowest number of vacancies in downtown Chicago. River North office rents leaped 26% over the past two years, and are now the priciest for a high-tech submarket behind only Redwood City in the San Francisco area and Manhattan’s midtown south.
“The River North activity is just off the charts,” said commercial brokerage Savills Studley Inc.’s senior managing director Tiffany Winne, who has represented technology tenants in Chicago.
Around 22% of Chicago’s new office jobs in the past two years were in the technology industry. According to CBRE data, employers added 11,795 positions. Even better, hiring is expected to continue to increase and prop up the real estate market.
“Our employees have reiterated time and time again they love the area and want to stay,” said Brandon Cruz, president of online health insurance finder GoHealth. “We think it’s the best place in the city, and that’s why we’re there.”