Uber Technologies is putting another big chunk of office space on the Chicago sublease market, adding to a glut that has expanded since the pandemic first upended work routines. The move reflects how companies across the country are rethinking their office needs.
The ride-hailing company said it upped its sublease availability by another 86,000 square feet at the Old Post Office. Combined with the 65,000 square feet it put on the secondary leasing market ahead of the COVID-19 crisis, Uber is looking for others to sublet a total of 150,000 square feet at 433 W. Van Buren St.
That follows other subleasing decisions Uber has made nationwide in recent months as it wrestles with the economic vagaries and overall shift in consumer habits brought on by the pandemic. Uber closed or consolidated as many as 45 offices around the world, including its San Francisco headquarters and sizable offices in Dallas and New York last year in tandem with 3,000 layoffs.
In Chicago, Uber’s sublet space represents more than 30% of the 463,000 square feet the firm had planned to call its second corporate headquarters when it signed the deal in mid-2019. At the time, it gave Uber anchor-tenant bragging rights to the $800 million redevelopment of the sprawling Old Post Office in the city’s Loop.
The 150,000 square feet expands Chicago’s list of available sublease property. Last week, Yelp announced it was adding nearly 60,000 square feet to the city’s inventory.
At the end of last year, Chicago hit a record 91 million square feet of vacant space, equal to nearly 18% of total inventory, according to CoStar research. The total amount of sublease property in the city jumped by 3.7 million square feet to finish the year at a historical high of 10.4 million square feet. And that was before Uber's and Yelp’s additions.
Uber had planned to consolidate its Uber Freight, Uber Eats and Uber Ride divisions all under one roof at the Old Post Office that was expected to open Jan. 5 of this year.
That has changed for Uber, like it did for many corporate office users, as the pandemic rewrites the concept of workspace. As city and state mandates shuttered office buildings, shopping centers and entertainment venues, workers took to performing their job activities at kitchen tables, in bedrooms or in little nooks and crannies in their homes.
As work-from-anywhere has evolved, more and more companies are considering allowing employees to work from home permanently or creating some sort of rotating office/home setup that could lead to sharp cutbacks in tenant space needs.
And though vaccinations are rolling out nationwide with a promise of a return to whatever defines “normal” soon, the future of remote work is still in limbo. Chief executives, however, are still overwhelmingly confident they will need fewer square feet of office space in the future, according to a joint survey led by Fortune magazine and Deloitte last month.
The early January survey was basically a repeat of one the two directed in September. The results also widely echoed themselves: In September, a whopping 76% of CEOs said they see their space needs falling, some said dramatically.
“The number is so high one might assume it’s an outlier,” Fortune wrote. “But in our January 2021 survey, 75% of CEOs still say they’d need less office space in the future.” Of those respondents, 20% said they’d need a “lot less” space, according to the survey.
As for Uber, it remains dedicated to Chicago with hopes of expanding eventually, as well in San Francisco and other nationwide offices.
“Uber’s commitment to Chicago remains unchanged,” the company said in a statement to CoStar News. “Construction will be starting at the Old Post Office space later this spring, and we are looking forward to opening sometime in the fourth quarter of 2021.”