Meet the First Tenant for Willis Tower Expansion
June 13, 2017
By: Ryan Ori
Soon after starting work on a $500 million addition to the base of Chicago's tallest building, Willis Tower's owner has leased out a big chunk of the new space.
New York-based Convene, which provides corporate meeting and event space, said it has leased about 55,000 square feet of what will be the top floor of a three-level retail podium extending out from the base of the Wacker Drive tower.
It is the largest lease, and the first outside the East Coast, for the company that has a combined 13 retail locations in New York, Philadelphia, Washington and Boston, Convene co-founder and CEO Ryan Simonetti said. The company, founded in 2009, also manages amenities for owners of some office buildings, he said.
It is also the first tenant Blackstone has announced for the 300,000 square feet of new space it plans to complete in the skyscraper by 2019. Blackstone unveiled plans for the $500 million addition in February. It bought the 110-story tower for a Chicago-record $1.3 billion in 2015.
Convene's lease is part of building owner Blackstone Group's broader effort to add amenities to serve the 15,000 people who work in the building and to attract more visitors. The new space also is expected to include entertainment, restaurants and bars, topped by a 30,000-square-foot outdoor deck and garden.
"This was the first anchor that we wanted to lock in," said David Moore, senior vice president and portfolio manager for Blackstone's Equity Office unit.
"(Prospective) tenants that we are talking to now are extremely excited about this, having a large enough space to support a large event once a year," Moore said. "We're able to provide a large conference center at the doorstep of our tenants, which bolsters the value of the property."
Equity Office was represented in the lease by Todd Siegel, Phil Golding and Kim Wiskup of CBRE. Convene was represented by Craig Coupe and Corey Siegrist of Jones Lang LaSalle.
Convene, founded in 2009, is eyeing a second Chicago location that Simonetti declined to identify, and the company eventually could have several spaces here, he said. Convene also is planning its first two West Coast locations, in Los Angeles.
The company is growing at a time when many office tenants are looking to reduce the amount of office space they lease, while also wanting more amenities in their building, Simonetti said. Rather than including large board rooms and conference centers into their leased space, many companies — including many in the Fortune 500 — prefer to lease Convene spaces as needed. Some corporations book several meetings in a year, Simonetti said.
Convene has on-site chefs and provides hotel-style services such as coffee, meals, snacks, concierge services and robust technology. Convene signs long-term leases with landlords, divides the spaces into a range of meeting sizes, and rents them to companies for events such as town hall meetings, product launches and board meetings.
Convene competes for business with co-working providers such as WeWork, hotels and companies such as Breather that offer short-term meeting space. Investors in the company include two major commercial real estate investors, Toronto-based Brookfield Property Partners and New York-based Durst Organization.
Convene's typical deal includes concessions from the landlord, which gets a cut of profits, Simonetti said.
The company chose Chicago for its first space outside the East Coast in response to requests from existing clients, many of which already have made commitments to book Chicago space, Simonetti said. "Chicago's also a big convention town, and we think we'll attract some of the breakout meetings that happen during a convention," he said.
Convene plans to open the Willis Tower space in late 2019 or early 2020, Simonetti said. The space will include 11 meeting and event areas of varying sizes, with the ability to accommodate events attended by up to 600 people.
Willis Tower's owner recently began preliminary work on the building's retail expansion, Moore said. Later this summer, Skydeck visitors will begin using a new entrance on Franklin Street, after the current entrance on Jackson Boulevard is closed to make way for construction work.