RedShelf Moves to 20K Sq Ft in Distressed Chicago Tower

Key Takeaway

• RedShelf relocates headquarters to a distressed 22-story building at 175 West Jackson Boulevard, subleasing 20,000 square feet.
• Move comes amid Brookfield Asset Management's foreclosure lawsuit for defaulting on a $280 million loan on the property.
• Shift to downtown reflects RedShelf's commitment to in-office work and marks a positive note in Chicago’s office sector with over 25% vacancy rates.

A Glimmer of Hope in Chicago's Office Space Saga

In a market overwhelmed by vacancies and the looming shadow of remote work's popularity, RedShelf, a digital textbook company, has made a notable move by relocating its headquarters to the heart of downtown Chicago. This decision not only represents a significant commitment to in-office work but also injects a dose of optimism into the city's struggling office sector. By subleasing approximately 20,000 square feet at 175 West Jackson Boulevard, RedShelf is taking a stand against the trend of shrinking corporate footprints, a move that could signal a turning point for the beleaguered market.

The Deal Behind the Move

The relocation comes at a time when the building's owner, Brookfield Asset Management, faces financial distress, highlighted by a foreclosure lawsuit over a defaulted $280 million loan. Despite these challenges, RedShelf's decision to move into a larger space, previously occupied by WellRight, underscores a broader narrative of resilience and adaptation in the face of market adversities. The specifics of the multi-year sublease remain undisclosed, yet the move is a clear indicator of RedShelf's growth ambitions and its commitment to fostering a collaborative work environment.

Chicago's Office Market at a Crossroads

Chicago's office sector has been hit hard by the pandemic, with record-high vacancies exceeding 25 percent last quarter and a surge in sublease space availability, reaching a record-setting 8.2 million square feet in 2023. RedShelf's expansion comes as a beacon of hope amidst these challenging times, suggesting that not all companies are ready to give up on the traditional office model. This move could potentially inspire other firms to reconsider their space needs, especially those looking to stimulate collaboration and innovation among their teams.

Redefining the Workplace

RedShelf's CEO, Rob Holland, emphasizes the company's shift towards a more flexible and collaborative workspace, aligning with its phase of accelerated growth. This approach not only challenges the prevailing remote-work model but also highlights the evolving needs of businesses in a post-pandemic world. By creating spaces that encourage collaboration while still accommodating individual work needs, RedShelf is setting a precedent for how companies might balance the benefits of in-person and remote work in the future.

Management Quotes

• Rob Holland, CEO of RedShelf:

  "We now have a more flexible space that allows us to have big collaborative areas and still give people quality spaces to work. It aligns with what we’re doing as a company as we enter a new phase of accelerated growth."