Groupon signs big expansion at HQ
(Crain’s) — A couple Chicago office buildings have managed to land something Google Inc. couldn’t: a deal with Groupon Inc.
The fast-growing daily-deal website company, which last week spurned a reported $6-billion offer from Internet goliath Google, is expanding its headquarters at 600 W. Chicago Ave. by about 57,000 square feet.
The expansion, a jolt of good news to the beleaguered office market, brings Groupon’s total footprint at the former Montgomery Ward & Co. Catalog House to about 140,000 square feet, a company spokesman says.
The firm plans to take three new spaces, including one on the first level of the complex’s northern portion beneath the condominiums at 900 N. Kingsbury St., as well as on the third and seventh floors of 600 W. Chicago. The spaces are to be ready in the next few months.
Groupon also is negotiating for additional 13,000 square feet in the sprawling, eight-story former Ward’s complex, which hugs the North Branch of the Chicago River, the spokesman says. The 1.56-million-square-foot property has become a hotbed for Internet and technology firms in recent years and is now 97.5% leased, according to real estate data provider CoStar Group Inc.
Brad Despot, a senior-vice president with Jones Lang LaSalle Inc. who leases 600 W. Chicago, declines to comment.
Groupon, which has been widely touted as the fastest-growing company ever, recently moved its 200-plus editorial team to temporary digs in an East Loop office tower while awaiting completion of the expansion space at 600 W. Chicago. The company has its staffers in about 1½ floors at 303 E. Wacker Drive, about 48,000 square feet, on the 23rd and 24th floors of the building, part of the Illinois Center complex.
“Our intention is to move everybody back (to 600 W. Chicago),” the Groupon spokesman says. “It’s definitely our preference that we’ll all be in the same building.”
Groupon needed the new space in a hurry to accommodate recent growth, and 303 E. Wacker was able to deliver. The building’s leasing agent, Michael Watts of J. F. McKinney & Associates, confirms Groupon is now a tenant but declines further comment.
Some of that space had previously been leased to Brewer Investment Group, which this summer moved into a portion of the 24th floor temporarily while its permanent space, the entire 30,919-square-foot 25th floor, was being built. The Chicago firm, however, was hit Oct. 28 with a civil lawsuit from the Securities and Exchange Commission alleging fraud.
The SEC alleges in its suit that beginning in June 2009 Brewer raised about $5.6 million from at least 74 investors for promissory notes that were to repay certain debts, but instead “funneled cash to (Brewer Investment) and one of its subsidiaries when the entities were under significant financial distress.”
It’s unknown whether the firm is now occupying the 25th floor, which it had leased for 11 years, but the SEC lawsuit says Brewer Investment failed to make payroll in August.
A spokeswoman and two Brewer executives named as defendants in the SEC’s lawsuit, Steven Brewer and Adam Erickson, didn’t return calls Tuesday seeking comment.
John Pletz contributed to this report.
