“The building is iconic in its own way,” said Michael Berretta, vice president of network development for Americas Spaces. “Everybody in Chicago knows it as the Sports Authority building. We like that kind of recognition. In time, it will be known as the Spaces building.”
Another well-known feature of the building, handprints of famous Chicago athletes on the building’s interior and exterior, could live on, said Marc Blum, president of Next Realty, the building’s landlord.
Many of the handprints have been removed to make way for interior demolition and the addition of windows to the structure, Blum said. The handprints are stored in Next Realty’s Skokie office as the tenant and developer consider whether to incorporate them into Spaces’ offices, he said.
The tradition of adding handprints of athletes, such as Michael Jordan and Walter Payton, began when the River North building was home to Morrie Mages’ local sporting goods chain, which he sold to MC Sporting Goods in 1987.
The lease by Spaces comes as real estate vacated by struggling retailers is repurposed throughout the country. In a recent example locally, Macy’s on Tuesday confirmed plans to sell the top seven floors of its State Street flagship store to Toronto-based Brookfield Asset Management, which plans to convert the floors to offices.
Next Realty had been seeking an office tenant to fill the building at LaSalle and Ontario Street, while also considering replacing it with a taller structure. The landlord also weighed hotel and apartment uses before deciding on the office conversion, Blum said.
Spaces was represented in the lease by Bill Rogers and Kerry Gilar of Jones Lang LaSalle. The landlord was represented by Michael Kazmierczak and Kerry Middleton of CBRE.
Spaces plans upgrades that will include a barista-staffed lounge for members on the ground floor and a new roof deck.
Spaces is a new player in Chicago’s increasingly competitive co-working space. Its first two locations here will open at 1500 N. Halsted St. in the Clybourn Corridor on March 26 and at 159 N. Sangamon St. in the Fulton Market district on April 2. The LaSalle Street building will be the largest location for the company, which plans to add more locations over the next 18 to 24 months, Berretta said.
Spaces is part of Swiss company IWG, which globally has more than 3,000 workspaces. Its other brands include Regus, Open Office and Color.
Co-working companies own buildings or sign long-term leases and typically rent out the spaces on shorter-term commitments. Clients range from one- or two-person startups to large teams of workers from Fortune 500 corporations.
There was nearly 2 million square feet of co-working space in the Chicago area in 2017, according to statistics from Newmark Knight Frank and Chicago Creative Space. That’s more than triple the total space three years earlier. By the end of 2018, the total is projected to be about 2.6 million square feet.
Next Realty has roots in the sporting goods industry, and also has experience repurposing shuttered Sports Authority stores. Next CEO Andy Hochberg formerly led his family’s Sportmart chain, which merged with Gart Sports in 1998. That combined company merged with Sports Authority in 2003.
Next owns other buildings once leased to Sports Authority, including a Lakeview store at Clark and Halsted streets now leased to an Advocate Medical Group outpatient clinic. At suburban properties Next owns, the landlord has filled former Sports Authority spaces in new leases with Value City Furniture in Schaumburg and with Big Lots in Niles.
“It was challenging,” Blum said of Sports Authority’s demise. “But good real estate gets re-leased to better tenants and better operators.”
