A company aiming to make Chicago a national model for urban farming is planting roots next to the city’s tallest skyscraper, signing the first of a planned series of long-term leases in downtown office properties.
Farm Zero has leased 9,023 square feet within the 31-story office tower at 125 S. Wacker Drive in the Loop business district, according to CEO Russell Steinberg.
That will become the first long-term home for the vertical farming pioneer, which plans to soon begin growing produce at commercial scale within the office tower owned by Canadian investor Ivanhoe Cambridge.
Farm Zero’s new space sits amid rows of office towers on Wacker Drive. It is across from the city’s tallest skyscraper, 110-story Willis Tower.
Steinberg said Farm Zero can grow more than 100 types of microgreens, leafy greens, herbs and flowers using racking and feeding technology.
Farm Zero’s goal is to address inefficiencies in the national food supply chain, where produce often travels thousands of miles to reach cities such as Chicago. A successful expansion by Farm Zero also could provide a lift for landlords of decades-old offices in need of new, nontraditional users of space as remote-work trends persist five years after the onset of COVID-19.
“There will be a series of simultaneous projects happening as a byproduct of the sensibility and importance of this new healthy food utility,” Steinberg told CoStar News. “It will kickstart a healthy eating ecosystem.”
With the lingering effects of the pandemic on real estate, older-generation office space in Chicago, other cities and suburbs already in recent years has been converted to new uses such as residential, hotel and data storage.
A new twist, urban farming, could meet goals of reducing food miles and food waste, Steinberg said.
“It’s healthy, traceable, high-tech, educational and it is intended to create enough food to achieve what is called food sovereignty, where there are no food deserts and there are no food access issues,” he said. “We’re simply producing it in abundance and making sure it reaches from the center of the bullseye to the inner rings of the bullseye. Hyper-local.”
CoStar News first reported Farm Zero’s plans for Chicago in April 2023. At that time, Farm Zero was in talks for a potential lease in the historic Burnham Center across the street from City Hall.
A deal was never reached there, and Farm Zero has been operating from a temporary office within the 43-story office tower at 30 N. LaSalle St.
Test farm
The LaSalle Street space includes an approximately 1,000-square-foot test farm from which it has grown multiple cycles of produce such as broccoli, red cabbage, arugula, romaine lettuce, basil, spring mix, pea shoots and sunflowers to prove the concept. Farm Zero plans to grow a broader range of produce as it expands.
The LaSalle Street tower is set to be partially converted to affordable apartments as part of an ongoing, city-backed initiative in the city’s longtime financial corridor. Steinberg said it’s possible Farm Zero could retake some space within the redeveloped property.
In the meantime, Farm Zero plans to soon start growing trays of produce within 125 S. Wacker while also seeking out other spaces in and around the Loop.
Produce grown in office towers will be distributed to corporate partners’ nearby offices as part of wellness programs, directly to nearby residents who subscribe and to restaurants, caterers, hospitals and schools, Steinberg said.
Farm Zero has eight employees, including three students at the Chicago High School for Agricultural Sciences, with plans to significantly increase its executive and farming teams in the coming months, Steinberg said.
The space at 125 S. Wacker is ideal because it is on the lower level of the tower, Steinberg said, allowing for deliveries from Lower Wacker Drive below the bustle of rows of trophy office buildings on Upper Wacker Drive overlooking the Chicago River.
Farm Zero’s lease is for five years, with a five-year extension option, he said.
Having a long-term space will allow Farm Zero to demonstrate the operation to healthcare systems and employers interested in ordering locally grown produce for their patients and workers, said Suzet McKinney, a longtime public health executive who is working as a consultant to Farm Zero. McKinney is the former CEO of the Illinois Medical District, and she recently left Chicago development firm Sterling Bay, where she was a principal and director of life sciences.
“Everyone has been open to the concept of Farm Zero, but this concept hasn’t been proven in Chicago,” McKinney said. “To be able to invite them to the farm and let them see and taste the produce will allow them to make informed decisions. The significance of having a space like 125 S. Wacker is that we can open this up to people working in the building or even just walking by the building to get lunch. That’s going to be part of the proof of concept for us.”
The tower at 125 S. Wacker, completed in 1974, is about 23% vacant, according to CoStar data. It is owned by Ivanhoe Cambridge, the real estate arm of Quebec’s largest pension fund, CDPQ, and managed by Houston-based commercial real estate giant Hines.
The two firms are among Chicago’s largest office landlords, at a time when real estate investors in major cities still are trying to overcome remote work trends, corporate cutbacks, high borrowing costs and other challenges.
CDPQ recently blamed its large exposure to office buildings in New York and Chicago for a sizeable drop in its annual return from real estate investments last year.
Ivanhoe Cambridge declined to comment to CoStar News.
National model
Farm Zero believes it can fill holes in office buildings and bring jobs to the central business district while eventually creating millions of pounds of fresh produce annually, creating a model for other U.S. cities.
The modular system uses racks connected to containers with water and nutrients to feed crops, helped by LED lighting.
Large-scale growing in urban settings is relatively untested, meaning there could be unforeseen challenges. But there are clear advantages, including controlled weather conditions, no need for pesticides and lower water requirements than outdoor farming, according to Farm Zero.
Urban farming has been tested in cities including Calgary, Alberta, in Canada and more recently at 30 N. LaSalle in Chicago, but the concept is still in its infancy.
Some vertical farming companies using low-rise structures such as warehouses outside city centers have hit financial stumbling blocks. New Jersey-based AeroFarms filed for Chapter 11 bankruptcy protection in 2023 before reemerging with a restructuring later that year. San Francisco-based Plenty Unlimited filed for Chapter 11 protection in March, also saying it planned to restructure and continue operations.
Steinberg said Farm Zero’s urban model, which creates distribution efficiencies, is a key differentiator.
“Many of those companies, if not all of them, started before COVID,” Steinberg said. “The only real feasible option was to go build something somewhere, a warehouse, an industrial build-to-suit unit, and do it away from where there are people to reduce costs. Post-COVID, after everyone emptied out of the office buildings, suddenly there’s this concentration of very capable space that can support controlled-environment agriculture.”