Lessen Signs Lease in 27-Story Tower After Acquisition of Chicago-Based SMS Assist Last Year
A real estate technology firm plans to move its Chicago office to a Loop tower across the street from where Google’s renovation of the James R. Thompson Center recently began in an early sign that the search giant’s pending arrival could have a halo effect on the surrounding area.
Lessen has leased about 77,000 square feet in the 27-story tower at 203 N. LaSalle St., the company told CoStar News.
That is far less than the approximately 114,000 square feet that SMS Assist leased in Prudential Plaza less than three years ago. Chicago-based SMS Assist, whose investors included billionaire Illinois Gov. J.B. Pritzker’s former venture capital fund, was acquired last year by Scottsdale, Arizona-based startup Lessen.
That deal brought together two companies that provided property owners and managers with contractors and maintenance providers.
In a statement via real estate brokerage JLL, which represented Lessen in the relocation, Lessen indicated that Google’s massive overhaul of the formerly Illinois-owned, Helmut Jahn-designed Thompson Center was a key factor in choosing 203 N. LaSalle.
“With this relocation, we’ll be elevating the work experience for our Chicago employees in a recently modernized, Class-A office property, with best-in-class amenities and prime access to mass transit,” Lessen founder and CEO Jay McKee said in the statement. “Google's announced move into the Central Loop is establishing LaSalle Street as a premier tech corridor within Chicago, and this location situates us perfectly for the next chapter of our corporate expansion.”
Google, state and local officials recently held a groundbreaking celebration marking the early stages of the major overhaul of the 17-story Thompson Center.
That followed another hopeful sign for the Loop as JPMorgan Chase announced it would renovate and stay in its 60-story namesake skyscraper rather than move to a new tower.
Lessen follows the trend of companies cutting office space since the onset of the pandemic in early 2020, but the deal is a win for the central portion of the Loop, which has lost large tenants such as Bank of America and BMO Financial to new towers to the west along the Chicago River and in Fulton Market.
Chicago officials have hoped that the Google and JPMorgan commitments, as well as planned conversions of some office space to apartments, can revitalize the area on and around LaSalle.
The tower at 203 N. LaSalle is now almost 80% leased, according to Transwestern, which represents Japan-based property owner Sumitomo Corporation of Americas.
“We are working with our new landlord to design a dynamic, collaborative workspace that will be ready for move-in by Q1 of next year,” McKee said in the statement. “The building's large floor plates enable us to optimize our layout, allowing us to reduce our physical footprint while accommodating our existing Chicago employees with room for future growth.”
Deal Never Completed
Sumitomo, in late 2022, explored a potential sale of the tower, which it bought for about $117 million in 2014, but it never struck a deal amid a sluggish property sales market. At the time the building went up for sale, it had recently undergone a $22 million renovation to areas including the conference and fitness centers and tenant lounge, according to a JLL brochure.
“The Lessen team will enhance the already vibrant culture at the building. 203 N LaSalle is a Class A asset offering an incredible location, a full set of tenant amenities, and is debt free,” Sumitomo executive Takuma Sasako said in an emailed statement to CoStar News.
Like the Thompson Center across the street, 203 N. LaSalle is directly linked to nearly every Chicago Transit Authority train line and the underground Pedway.
“Lessen will add to the roster of exciting tenants recently committing to the Central Loop along with leading technology and financial services leaders,” JLL’s Brian Means, one of the brokers who represented the tenant, said in the statement. “Lessen will also benefit from an accessible transportation location for all employees and enjoy increased collaboration opportunities by consolidating to two large floor plates."
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Lessen, which has about 500 Chicago-area employees, did not say in the statement what it plans to do with the space it moved into in 2022 in the One Prudential tower along Millennium Park. That space previously was home to the Chicago Tribune after the newspaper moved there in 2018 after 93 years at Tribune Tower on North Michigan Avenue.
Lessen is expected to pay a $7.5 million termination option to leave its current office, according to people familiar with the situation.
Prudential Plaza’s leasing broker, Dan Heckman of Riverside Investment & Development, declined to comment to CoStar News on the cost to terminate, but he confirmed that Lessen has until the end of August to exercise the option, which is effective in early 2026.
If Lessen uses that option as expected, Pru Plaza owner Wanxiang America Real Estate — the Chicago-based real estate investment arm of a Chinese auto parts manufacturer — will pocket dollars to use toward an ongoing turnaround effort in the massive office complex.
Wanxiang previously said it would invest more than $50 million in upgrades to fill vacancies, which will include the pending move-out of namesake tenant Prudential. Architecture firm HOK recently signed a lease to move its Chicago office to the 41-story One Prudential tower.
Lessen’s space is on the lower four floors, connected by interior stairways and with its own entrance on Stetson Avenue. Combined with other available low-rise space, the landlord can accommodate a tenant of up to 250,000 square feet, offering naming rights for the complex and building-top signage for a large tenant, Heckman said.
“We are sad to see a tenant leave, but we are excited about the opportunity it presents to market one of the most dynamic blocks in the city of Chicago with unparalleled opportunities for branding,” Heckman said.