Loft Offices And Boutique Buildings Can Pave The Way For The Return Of CBD Office Workers

The Pritzker administration’s ruling that office workers could return to their workplaces this month resulted in a slow trickle back downtown. Many landlords and tenants say they are going to take it slow, and learn how well offices can function with the necessary health and safety restrictions before they hit 50% capacity, the current limit mandated by the state.

As the downtown repopulates, owners of its loft-style buildings, along with developers of new, boutique offices, say workers will find it easier to come back to their properties. Cramming onto elevators is not required, and with keyless access points, tenants can get in and out each day with a minimum of personal contact. The low-rise buildings also provide more light and air than traditional office towers.

“You can walk out by hustling down a few stairs, instead of getting in an elevator and having to walk through a lobby, so people will feel more comfortable coming back to our buildings than ones with thousands of people,” North Wells Capital Principal of Asset Management Tony Lindsay said.

His Chicago-based firm, the investment management affiliate of Urban Innovations, which in the 1980s pioneered the use of River North lofts, owns 10 buildings in that neighborhood and has a total of 145 tenants.

If workers in loft offices return at a quicker pace, their experiences may provide lessons as other companies across the central business district attempt to rebuild their own office environments, Lindsay said. 

Other landlords heavily focused on health and wellness agree.

“I don’t think there’s any doubt the experience of what we’re doing will influence others,” Parkside Realty Chairman and CEO Bob Wislow said.

Although many corporate leaders were pleasantly surprised by how easily employees adapted to working from home, the majority of workers do want to return to the office, according to a new report from JLL. The company surveyed 3,000 office workers from around the globe, and 58% said they missed the office. Reconnecting face-to-face with co-workers is especially popular with tech workers, 69% of whom want to return, as well as younger employees. Of those 35 and under, 65% said they wanted to go back.

Wislow's firm is readying Fulton East, a new 12-story office building at 215 North Peoria St. in Fulton Market. The 90K SF structure was set to open in July but Parkside pushed that back to August, and spent the past few months upgrading existing health and safety features and even adding others.

“The size of our building allowed us to pivot, and we were also fortunate to be at a stage where we could still do that before opening,” Wislow said.

Infectious disease experts say what air you breathe is the most important factor when assessing coronavirus risk, and loft and boutique spaces have an advantage over massive towers with centralized HVAC systems. Within the North Wells Capital-Urban Innovations portfolio, the occupants typically have their own HVAC systems, and don’t have to breathe the same air as thousands of other office workers, Lindsay said.

Since Fulton East is a boutique building with relatively small floor plates, Wislow said users can easily occupy entire floors and avoid crowds. In addition, floor-to-ceiling windows let natural light flood the entire space, and each floor includes a 9-foot x 27-foot outdoor balcony, so fresh air and space to social distance is available.

“They’re big enough to be conference rooms,” Wislow said.  

Lindsay estimated its portfolio was roughly 12% occupied last week, and by Monday it rose to 18%.

“Quite candidly, it’s been a slow trickle back, and I expect there to be a slow increase throughout the week,” he said. “A lot of people are still uncomfortable using public transportation.”

The company has a simple strategy.

“Let’s see what it looks like, how to navigate it, and then we'll bring in a few more people next week,” he said. 

Parkside Realty plans to use several of its new safety features to entice prospective tenants, Wislow said. Those who don’t want to climb the stairs can use the new “toe-to-go,” a hands-free system that allows users to summon elevators by pressing buttons with their feet. The developers will begin installing it next week.  

Other recently added safety features include UV lights in the building’s ductworks, and wall-mounted cold-plasma devices, both of which can kill airborne pathogens.

As the company sifted through various options to protect tenants from any possible spread of the coronavirus, it looked at what methods have been adopted by major hospitals, Wislow added. And with the threat expected to last for an extended period, developers will from now on have to do likewise.    

“This is a seismic shift in our industry, and it’s going to be a big learning experience for everybody,” Wislow said.