The Chicago River Could Get The Green Flowing — And Not Just On St. Patrick's Day
When Torque Founder Eric Masi stepped onstage to moderate a panel at a recent Bisnow event on development along the Chicago River, he wasn’t just joined by the six other scheduled speakers. He brought theatrics as well.
Brandishing two mason jars of green water he collected after the city’s annual St. Patrick’s Day river dyeing, Masi drew a direct line between the internationally acclaimed event and how the river and its surrounding developments anchor the city and fuel its economic engine.
The Chicago River serves as a distinctive asset for the city and for developers along its shores, with bankside offices historically seeing lower vacancy rates and higher rental rates than the balance of the central business district.
It also boasts portions of a riverwalk that many hope will one day connect all of the river’s branches and make the natural resource an even more vital city centerpiece, said panelists at Bisnow’s Turning the River Green — CRE Along The Chicago Waterfront event held Tuesday at Swissotel Chicago.
“It's unique in that it borders the downtown submarkets, and there's no other submarket in America that has that as a natural amenity,” said Hines Managing Director John Tomlinson. “You get this incredible corridor where you get light and air and view corridors that you wouldn't get anywhere else.”
To compare riverside office property to the entire CBD, Lendlease Development Director Jonathon Cordell referenced a report he contributed to in 2022 when he worked at CBRE. The report found the CBD had about 24% total vacancy including sublease space, whereas office space along the river had roughly a 9% vacancy rate, he said.
As of December 2023, the same held true, with a city report finding that riverfront properties accounted for some of the “most stable office product downtown,” with a vacancy rate of about 7% versus the mid-teens to 30% elsewhere in the CBD.
“Historically, the river does outperform from an occupancy and rental rate perspective,” said Paul Purewal, who handles real estate development for the Onni Group. “You’re able to walk out your front door and be in a natural environment and not be in the belly of the beast.”
Panelists clamored for the city to turn its focus to extending the Riverwalk, a path adjacent to both sides of the river at various points in the city, and connect more of its fragmented portions together.
Versions of a proposed expansion have been floating around for years. By getting it done, the city could make the river a destination in the same way Lake Michigan has become, boosting retail along the water, Cordell said.
“We need to galvanize and get that done,” he said. “To fix the Riverwalk [in the West Loop] and connect that entire walkway to our south bank where we have our Riverwalk between Harrison and Polk, let's just get that through and make it happen.”
Future Riverwalk extensions should not only connect its varying pieces but link with other pedestrian thoroughfares throughout the city, said Murray McQueen, former president of Tribune Real Estate Holdings. He believes it’s a development that will organically happen over time.
As the Riverwalk expands, Tomlinson said the area will continue to become more attractive to capital partners.
“We will continue to invest along the river and bring investors to Chicago," Tomlinson said. "It only gets better from here, and it all becomes more active with the Riverwalk.”
Buildings on the river have many advantages over their urban, in-shore counterparts, said McGuire Engineers President David Brooks. It's a lot easier to get natural light and quick access to fresh air in buildings on the river because they have an entire side not blocked by any other properties, which can help improve the buildings’ “balance,” he said.
With the right permits, developers can also utilize the river to help cool the building and save on energy costs, Brooks said.
Purewal said Onni Group has looked into using the river as a cooling mechanism for its four-skyscraper mixed-use development at 700 W. Chicago Ave. in River West, adding that the permitting process and associated costs are “intense.”
But as developers continue to craft a vision for what the future of the riverfront looks like, they need to keep the impact of their developments on the natural resource in mind, Tomlinson said.
“The river was there before we were, and so as we develop, it's important to think about the way that the developments have an impact on the river, both positive and negative,” Tomlinson said. “[It’s important to] think about the ways that we can integrate with the environment rather than just pushing back.”
