JPMorgan Chase bets big on Loop with plans to refurbish tower for 7,200 workers

JPMorgan Chase said Monday it will modernize its downtown Chicago office tower, from its top floors down to its plaza, to make it a better place to work and show its faith in doing business in the central Loop.

The bank, Chicago’s largest in market share, said the renovation will benefit its 7,200 employees who work in Chase Tower, 10 S. Dearborn St., and support nearly 1,000 construction jobs. The 55-year-old tower will be made more friendly to remote work that has dealt a staggering blow to the office market and to downtown businesses that rely on foot traffic.

The decision amounts to corporate Chicago’s biggest vote of confidence in the Loop since Google’s announcement that it will buy and occupy the Thompson Center, the state government’s former nerve center.

“I think between Google and ourselves, there’s a lot of good that’s going to be accomplished here,” said Tony Maggiore, chairman of the Midwest leadership team at JPMorgan Chase.

JPMorgan Chase

The decision to stay put contrasts with other firms, including Bank of America and BMO Financial Group, moving to new buildings in the West Loop or Fulton Market, often to shed space in the process. Real estate experts said JPMorgan Chase considered a similar move but found that anchoring a new building was next to impossible.

Bank of America and BMO hatched their relocation deals before the pandemic hit, making construction of trophy-style high-rises a prohibitive financial risk.

Andy Davidson, executive managing director at Transwestern, said it would have been tough for JPMorgan Chase to move in Chicago and then try to sell its current tower. Property values have plummeted by 40% or more because of declining rental income, he said.

Davidson said moving to a new tower would involve at least a 15-year lease for JPMorgan Chase. “This is a tough environment for making long-term [leasing] decisions,” he said. “No one really knows if this is permanent or if three years from now people will be back in the office.”

He said many office tenants are signing short-term lease renewals but cutting space needs by at least 30%. His firm did not advise JPMorgan Chase.

Maggiore declined to discuss other sites the bank considered. He focused instead on Chase Bank’s local profile, including a pledge to provide $800 million by 2025 in loans and philanthropy for homeowners and small businesses on the South and West sides.

“We wanted to honor the history of Chase Tower and the history of our investment in Chicago,” he said.

The New York-based bank’s local connections go back to the First National Bank of Chicago, founded in 1863.

Before its absorption by out-of-state rivals, First National built the 60-story tower in 1969. The architects were C.F. Murphy Associates and Perkins & Will.

‘Creative combustion’

Design firm Gensler will reconfigure the layouts to reduce the number of private offices and increase collaborative space, Maggiore said.

He promised new looks for the lobby and mezzanine. The lobby will still have retail banking, but the rest of it will get amenities for those who work in the building, such as a fitness center and improved food hall.

JP Morgan Chase

Many details are to be worked out, and the bank did not disclose estimated costs. Maggiore said work will begin soon and take about two years to complete.

He said the sunken plaza, currently a hardscaped space, will get landscaping and a new seating design, with improved public access to “The Four Seasons” mosaic by Marc Chagall.

The bank announced its plans Monday at a news conference that included Mayor Brandon Johnson. The mayor hailed the work as revitalizing a prominent skyscraper while generating substantial job opportunities.

Maggiore said many of the bank’s employees visit the office three days a week. He said the new features will improve collaboration, which JPMorgan Chase Chairman Jamie Dimon likes to call “creative combustion.” Like many managers, Dimon has been looking for ways to get employees back together.

Chase Tower includes nearly 2 million square feet, some of it allotted to office users other than the bank. Exelon has its corporate office there. The improvements also will benefit the tenants, Maggiore said.

Real estate analysts agree that office vacancy rates downtown are at or near record highs. CBRE reported that at year-end 2023, vacancies in Chicago’s downtown were 21.1%, up from 15.5% a year earlier. It said space available for sublease, empty offices for which landlords are still getting rents, would add another five percentage points to that figure.

“I personally think vacancies will continue to increase. We’re not out of this yet,” Davidson said.