After getting a new owner last year, fast-growing credit-card software company Braintree Inc., will soon have a new — and much bigger — headquarters.
Chicago-based Braintree, which was acquired in 2013 by PayPal parent eBay Inc., is more than doubling its headquarters space in a move from the West Loop to the Merchandise Mart. The company signed a long-term lease for about 60,000 square feet in the building, confirmed the company's broker, Henry Lee, a vice president at Chicago-based real estate firm Jones Lang LaSalle Inc.
Braintree, which will move in the third quarter, was growing fast even before the $800 million sale to eBay. Just two years ago, the company more than tripled its space in a move to 27,000 square feet at 111 N. Canal St. in the West Loop.
When the sale to San Jose, California-based eBay was announced, Braintree CEO Bill Ready said employment would continue to grow in the company's offices in Chicago, New York and the San Francisco Bay Area. Braintree now has 300 employees, the Chicago Tribune recently reported.
MART CHANGING RAPIDLY
Mr. Ready, whose firm's technology processes online payments, did not respond to requests for comment.
Like Braintree, the Merchandise Mart also is undergoing rapid changes. Once known exclusively for its showrooms, the River North building continues to evolve as a home to technology-based office tenants.
Motorola Mobility recently moved into 604,000 square feet in the Mart, becoming the building's largest tenant and joining the likes of startup hub 1871, digital marketing agency Razorfish and health care technology companies Allscripts Healthcare Solutions Inc. and GoHealth LLC.
Braintree considered several other options, including expanding in its current building, but chose the Mart because it provides room for further expansion, Mr. Lee said. The company also looked at office space next door to the Mart at the former Apparel Center, now called River North Point, as well as at 175 W. Jackson Blvd. and the Sullivan Center on State Street, said Mr. Lee, who represented the firm with JLL Vice President Phil Geiger.
PAYING PREMIUM FOR FLEXIBILITY
"We could have doubled in space across the hall (at 111 N. Canal), but that would have only been a short-term solution,” he said. “They didn't want to be on multiple floors, because they are highly collaborative. Even though it was more expensive to go to the Mart, they were willing to pay a premium for the flexibility to continue to grow. The floor plates are the Mart are 200,000 square feet, and we worked out a deal with the Mart that allows us to continue to grow contiguously.”
Braintree is leaving another wide-floored building, where it has about four years remaining on its lease with Chicago-based owner Sterling Bay Cos. Because that Canal Street building also is a destination for tech tenants, including the soon-to-be-headquarters of in-flight wireless provider Gogo Inc., Braintree expects to be able to quickly sublease its space there, Mr. Lee said.
The 4.2-million-square-foot Mart, along the Chicago River between Orleans and Wells streets, is more than 95 percent leased, according to real estate data provider CoStar Group Inc. River North had the smallest proportion of vacant office space downtown, 10.1 percent, at the end of the first quarter, according to Los Angeles-based CBRE Inc. That compares with 14.7 percent vacancy for all of downtown.
A spokesman for the Mart, which is owned by New York-based Vornado Realty Trust, had no comment. The Mart was represented in the lease by Andrea Saewitz and Wendy Katz, executive vice presidents at Chicago-based J.F. McKinney & Associates Ltd.
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