Coca-Cola is in talks to lease office space in a Chicago building that was the original Schwinn bicycle factory in the late 1800s, a deal that if completed would cause a developer to shelve plans to convert the six-story building into a boutique hotel.
The soft-drink giant is eyeing a deal to move into 40,000 square feet or more in the Lake Street Lofts building at 910 W. Lake St. in the Fulton Market district, according to people familiar with the deal.
Negotiations to lease a large block of the building unexpectedly emerged after CoStar News in May reported that Chicago-based developer Fulton Street and its partners were planning to convert the vacant building into a 140-room, Drift-branded hotel.
Coca-Cola’s negotiations are ongoing, and the deal still could fall apart.
If a lease with Atlanta-based Coca-Cola is completed, Fulton Street will pivot back to its original plan to convert the vintage structure into offices with an atrium connecting to its larger, ground-up office development at 919 W. Fulton, according to people familiar with the deal.
It also would be a relatively rare example of an office tenant adding space.
Coca-Cola’s lease would allow the company to bring together two nearby offices in one larger space, the people familiar said. The company currently leases 7,400 square feet at 1201 W. Lake along with the entire 16,700-square-foot building at 1001 W. Adams St. for its Chicago-based dairy products subsidiary Fairlife, according to CoStar data.
The potential office deal at 910 W. Lake is the latest twist for the Chicago developer that turns heads by landing a $233 million construction loan to kick off the more than 360,000-square-foot office project next door at 919 W. Fulton. Funding for the 11-story building was a national rarity amid historically low demand from corporate tenants, high borrowing costs and a dearth of financing available for ground-up office projects.
Fulton Street and investor Shanna Khan overcame those obstacles because of a large lease with Chicago-based real estate investor Harrison Street Real Estate Capital for that company’s headquarters, and by simplifying its development plan. That included shelving plans to connect the new building to Lake Street Lofts space converted to offices.
Khan is the daughter of Shahid Khan, who owns auto parts supplier Flex-N-Gate and the NFL’s Jacksonville Jaguars.
The development team held a groundbreaking ceremony for the 919 W. Fulton project in late 2023, and the building is expected to open next year.
Century-old structure
The brick-and-timber structure at the corner of Lake and Peoria streets was completed in the 1880s, and in 1895 it became the original factory of the Arnold, Schwinn & Co. bicycle maker. A venture led by local architect Pat FitzGerald in recent years converted it into an 89-unit apartment building before Fulton Street bought it for $49 million in December 2022 with plans to include it in the office project.
Fulton Street later pivoted to the hotel plan with investors Khan and Weldon Development Group, with Drift lined up to manage and invest in the hotel.
Now that plan is in limbo with one of the world’s most recognizable brands eyeing an office deal.
Fulton Street declined to comment. Coca-Cola did not respond to requests for comment.
While much of downtown Chicago and office markets nationally have struggled to overcome the aftereffects of the arrival of COVID-19 in early 2020, Fulton Market has performed relatively well.
A CoStar analysis in late 2021 found the former meatpacking district to be the fastest-growing urban office market in the country by total supply of space. Arrivals of new restaurants, retail, apartment towers and hotels have contributed to the area’s vitality.
Fulton Street and its investors have been active, including plans to build more than 1,500 apartments across three towers west of 919 W. Fulton. The new office building also will include an Equinox fitness club and two Gibsons Restaurant Group concepts.
For the record
The tenant is represented by CBRE brokers Lisa Konieczka and Brian McDonell. The landlord is represented by Madison Rose broker Matt Pistorio.