AT&T is dialing up efforts to shrink its corporate real estate across the United States, with the listing of an entire Chicago office building for sublease.
The Dallas-based company is looking to offload its space at 2401 West Grace St. on the city's North Side, AT&T confirmed with CoStar News, a nearly 93,100-square-foot property at which it has occupied the entirety of for nearly a decade.
The decision extends a streak of similar offloading moves the company has made nationally in recent years, all part of a broader effort to reduce its operational expenses and consolidate its real estate portfolio.
”We regularly evaluate our real estate footprint to align office space with how our teams work and the long-term needs of the business," an AT&T spokesperson told CoStar News. "We are currently assessing our presence at 2401 W. Grace Street.”
Similar to a cohort of tenants elsewhere across the country, AT&T's Chicago sublease decision is ultimately a result of reevaluating spatial needs and eliminating anything that has since become extraneous.
AT&T's real estate changes over the past several years have coincided with the implementation of a strict in-office mandate that requires employees to be on site for the complete Monday through Friday workweek. The heightened attendance policy took effect early last year, shedding its earlier pandemic-era flexibility that allowed employees to show up at least three days per week.
That shift has prompted the company to concentrate its presence in some cities across the nation and offload space in others, often requiring employees to make the choice between relocating or taking a severance package.
Optimizing space
Some of those recent changes include a deal it recently signed to significantly shrink its San Antonio hub, vacating its namesake building downtown and relocating to a suburban campus on the far west side, a move that ultimately cuts about 300,000 square feet from the company's regional footprint.
It has also closed call centers and smaller offices throughout the United States, reducing the number of its help desk centers from 22 outposts down to six.
Yet the company is also ramping up investments in the physical real estate it is choosing to maintain.
It put out spatial requirements in Charlotte, North Carolina, in a move that reverses years of downsizing in the region. It also signed a lease last year in Texas for about 186,000 square feet spanning seven floors at 2221 Lakeside Blvd. in Richardson, a suburb on the outskirts of its downtown Dallas headquarters.
The move was aimed at consolidating several call centers it had in the area under one roof, and was "part of a companywide initiative to optimize our real estate footprint, reduce costs, and modernize our workspaces," an AT&T spokesperson previously told CoStar News.
All the while, AT&T is preparing to relocate its headquarters from Dallas to a campus roughly 20 miles away in Plano, Texas. The move will allow it to consolidate all of its Dallas-Fort Worth space under one roof, a critical element in the company's decision-making as the nature of its work has evolved over the past couple of decades.
AT&T is expecting to spend $1.35 billion to build the future 2 million-square-foot Plano campus, an investment for which it received a $20 million incentive package earlier this year.
Last year alone it closed offices in Redmond, Washington, and Pueblo, Colorado, but even so still has a considerable office presence in major markets throughout the U.S. It continues to fill about 1.2 million-square-feet in Chicago's 10 South Canal St. tower along with large hubs in New Jersey, the Dallas area, the San Francisco Bay Area and Atlanta.
All told, the telecommunications conglomerate's office space is still considered to be hefty, even in the face of its broader consolidation push. CoStar data shows the company leases or owns about 30.5 million square feet of office real estate around the world.
AT&T has enlisted help from brokerage JLL to market the Chicago availability, the terms for which have not been made publicly available. The phone carrier last renewed the multi-floor deal in 2022, according to CoStar, a commitment that spans all four floors of the West Grace Street property.
The company signed on for the North Side building in 2017. It is unclear how much of the space is currently occupied on a regular basis or how many employees are based there, all of whom are now mandated to adhere to a strict attendance policy.