Google plans to buy the spaceship-like James R. Thompson Center in Chicago, a deal that will further the tech giant’s growth in the city and provide a much-needed boost to the Loop business district.
The Mountain View, California-based search engine provider, Illinois Gov. J.B. Pritzker and Chicago developer Prime Group announced the plan Wednesday, saying Google would buy the building after it’s renovated.
Google has not said how many employees it plans to add in the Thompson Center, but the modernized building will have enough space to accommodate thousands of workers.
Wednesday’s announcement confirms a CoStar News report in June that Google was negotiating to buy the glassy, Helmut Jahn-designed building at 100 W. Randolph St.
The state of Illinois last year struck an agreement to sell the 17-story building to Chicago developer Prime Group, led by Mike Reschke, for $70 million.
Reschke planned a $300 million renovation of the 1.2 million-square-foot structure, including plans to change the glass exterior of the retro-yet-futuristic building.
The state agreed to move back into 427,000 square feet of office space in the building, which it would either buy back after it was renovated for $148 million or lease for $258 million over the next 30 years, at which time the state would own it.
Under the newly completed deal, Prime Group bought the entire building for $105 million and will renovate it for Google, which will buy it for an undisclosed amount when the overhaul is completed, the developer, Pritzker and Google said Wednesday.
The Thompson Center, named for a former Republican governor, has been home to state offices since it opened in 1985. The state already has begun moving some workers to other buildings, including another one it bought last year at 555 W. Monroe St. in the Loop.
‘Transformative’ Transactions
Google, which has almost 2,000 employees in buildings in the city’s Fulton Market district, said it plans to move workers into the Thompson Center in 2026.
“When we bid to acquire the Thompson Center, we were committed to transform the building to be a world class office building with the best available building components, systems and technology,” Reschke said in a statement. “With one of the top locations in downtown Chicago, we knew after the planned renovation that the iconic building would attract world class tenants. These transactions are transformative for the state and the city and will create key anchors for the future success of Chicago’s downtown district and LaSalle Street for many more generations.”
The state will receive $30 million in cash. For the other $75 million, the state will take ownership of a nearby office building at 115 S. LaSalle St., part of a two-building complex that Reschke’s firm is in the process of buying and plans to renovate. The building the state will own has 591,845 square feet of rentable space, according to the state.
Renovations of that space will take about 18 months, the state said, with partial occupancy beginning eight months after Prime Group’s purchase of that property is completed.
The deal is part of the governor’s yearslong process to consolidate Chicago office space and cut real estate costs.
“This transformative agreement will save our taxpayers nearly a billion dollars over the next thirty years — and further Chicago’s reputation as one of the great tech hubs not just of the United States, but of the world,” Pritzker said in a statement. “I want to thank Google and the Prime Group for investing in their future by investing in ours. Together, we are bringing a 21st century vision for the LaSalle Street corridor to life.”
BMO Harris Bank is moving out of the LaSalle Street building for its recently opened BMO Tower near Union Station.
BMO is among several large tenants that have moved out of older buildings in the heart of the Loop in recent years for new towers along the Chicago River or in Fulton Market. Other large departures have included Bank of America, the namesake tenant in a new skyscraper at 110 N. Wacker Drive on the river.
COVID-19 and the work-from-home trend that followed have further challenged the city center, where office vacancies have increased and businesses that depend on heavy foot traffic from office workers have struggled.
Chicago also has sustained some high-profile headquarters losses recently, with Boeing moving to Arlington, Virginia, and hedge fund Citadel shifting to Miami. Caterpillar is moving its headquarters from Chicago’s suburbs to Irving, Texas.
Now the Loop is gaining an expansion by one of the world’s best-known companies, part of parent company Alphabet, despite Google’s plans to cut back on hiring overall.
“The LaSalle Street corridor, which is at the heart of Chicago's central business district, has become an attractive location for residents, visitors and businesses alike,” Chicago Mayor Lori Lightfoot said in the statement. “With this exciting announcement, we will be able to further reinvigorate this important, economic center and continue showing the rest of the world that our city is more than ready for catalytic investment. I thank Governor Pritzker and his team for enabling the Thompson Center to become such an important corporate campus project and look forward to seeing the corridor become even more of an asset to our city and region.”
The state has for years, under multiple governors, sought to sell the Thompson Center, complaining that it was inefficient and in need of hundreds of millions of dollars in repairs.
Before striking the deal with Reschke’s firm, Pritzker had said he didn’t care whether a buyer redeveloped or demolished the Thompson Center, as long as the sale was a good deal for taxpayers.
The Thompson Center’s central location, huge footprint, eye-catching design and connection to several CTA train lines are advantages that ultimately spared it from the wrecking ball.
“The Thompson Center gives us a presence in the central business district, enabling us to get in on the ground floor of revitalizing the Loop with its unparalleled access to public transit, which is so important to today's hybrid workforce,” Google’s Chicago leader, Karen Sauder, said in a statement. “This will help our business, our product development and create a great environment for our employees. We're proud to continue being an active part of Chicago's diverse and vibrant community.”
Fulton Plans
Google did not say how its upcoming Loop presence will affect the company’s other office space in Fulton Market, where it leases more than a half-million square feet in its Midwest headquarters at 1000 W. Fulton and in a nearby building at 210 N. Carpenter St.
CoStar News reported in April that Google was negotiating a lease of about 200,000 square feet in the Fulton Labs building at 400 N. Aberdeen St. It’s unclear whether that deal will move forward now that Google plans a major Loop expansion.
The Thompson Center will be the first Chicago building owned by Google, which has gobbled up billions of dollars’ worth of buildings throughout the world.
Google’s Thompson Center deal isn’t the first blockbuster move to shake up Chicago real estate.
The company signed a deal in 2012 to move the headquarters of Motorola Mobility, which Google owned at the time, into more than 600,000 square feet in the Merchandise Mart. By the time the move from Libertyville took place in 2014, Google no longer owned the phonemaker, but the deal sparked a series of high-profile leases in the massive riverside building.
In 2015, Google moved its Chicago office from River North to Fulton Market, which at the time was known as a meatpacking district. The move into the former Fulton Market Cold Storage building, now known as 1KFulton, helped the area evolve into today’s mix of office, apartment and hotel towers.