Boeing is moving its headquarters out of Chicago in another blow to the office market

Boeing Headquarters with Boeing CEO Dave Calhoun (Boeing, Flikr via Ian Abbott, iStock)

In another blow to Chicago’s struggling office market, aerospace giant Boeing is set to vacate its West Loop headquarters after 21 years of anchoring the building.

The company will move its headquarters to Arlington, Va., The Wall Street Journal reported, citing people familiar with the matter.

The departure from Boeing comes after the expiration last year of a package of tax breaks and other incentives worth more than $60 million that Chicago, Cook County and Illinois provided. to the company when it moved to 100 North Riverside Plaza, just west of the Chicago River from the Loop.

In 2005, four years after Boeing moved into the building on a 15-year lease, it bought the 36-story, 770,300-square-foot tower from the Florida state pension fund for $200 million, a reported the Chicago Tribune at the time. The company then occupied more than a third of the building.

If the company reduced its footprint in the building, the departure would further hurt Chicago’s central business district, which is already facing a record vacancy rate of 21.2%, according to CBRE. The recent rise in the vacancy rate was driven by new supply in the market rather than tenants moving out of offices, but the pandemic has reduced demand for downtown workplaces outside of more recent developments .

Last year, Boeing insisted that major operations were still taking place at its Chicago headquarters, even as remote working arrangements left the building virtually empty amid the pandemic. The company also took steps last year to shed real estate from its portfolio, but the company rejected a suggestion that it would exit its Midwest base, Reuters reported in October. “Chicago is strategically important to Boeing’s U.S. and global operations,” a spokesperson told the outlet. “As with other companies, we have adapted to hybrid ways of working amid the global pandemic to engage with our employees, customers and other stakeholders.”

More Boeing executives have worked in its Washington, D.C.-area offices in recent years, the Journal reported. In 2017, the company announced it would move its defense unit headquarters to Arlington from St. Louis to be closer to lawmakers and Pentagon officials, government affairs and other personnel also working from the complex. offices opened in 2014.

A formal announcement of the company’s move is expected next week, the Journal reported.

[WSJ] – Sam Lounberry

Jose C. Birney