Cleverbridge Relocates to River North

November 2013

Growing e-commerce firm Cleverbridge A.G. is consolidating its U.S. headquarters into about 30,000 square feet in a vintage River North office building, yet another example of 21st-century technology workers seeking early-1900s real estate.

Cologne, Germany-based Cleverbridge signed a 10-year lease at the 101-year-old Thompson Building, 350 N. Clark St., confirmed Craig Vodnik, a co-founder who leads Cleverbridge's U.S. operations. The firm's 95 Chicago employees are leaving about 10,000 square feet each at 360 and 333 N. Michigan Ave., a move that will be completed by late this month, he said.

“As we've matured as a company, it's become desirable for our employees to be in a more hip neighborhood,” Mr. Vodnik said. “The average age of our employees is about 28. River North is a perfect place for that age group. Not one of our employees drives to work.”

That is a similar refrain in the technology sector, which believes what's old is new again when it comes to offices. River North, with its stock of vintage loft-style structures, had 10.7 percent overall vacancy in the third quarter, lowest of all downtown Chicago submarkets and far below the overall rate of 14.9 percent, according to Los Angeles-based CBRE Inc.

“A 30,000-square-foot space in River North is very hard to find,” said Brad Serot, a senior vice president at CBRE who represents tech tenants but was not involved in the deal. “You have a couple of Class A office buildings that were built in the last six years, but those aren't the type of buildings or the rents that tech users want. The supply is very limited, especially because the buildings are so small.”

Building owner Albert Friedman, known as the “mayor of River North” because most of the 50 buildings his Friedman Properties Ltd. owns are in the area, estimates his office properties have 3 percent vacancy.

As tech-oriented employers seek untraditional spaces, owners of smaller structures in River North have thrived by emphasizing their quirkiness and by topping them with features such as penthouses and rooftop decks that can't be added so easily to modern skyscrapers, Mr. Friedman said.

'CHANCE TO DO SOMETHING REALLY SPECIAL'

“These older, low-rise buildings give people the chance to do something really special for their employees, even more so for youthful companies,” Mr. Friedman said.

Friedman Properties bought the 110,000-square-foot building at 350 N. Clark in 2006, paying $19 million for Mesirow Financial Holdings Inc.'s headquarters.

When Mesirow moved across the street in 2009 to a 45-story tower at 353 N. Clark St. that it developed with Friedman Properties, 350 N. Clark was vacant. Now, with Cleverbridge moving in, the seven-story building is fully leased, with tenants including restaurants Piccolo Sogno Due and Protein Bar.

Friedman Properties was represented in the deal by Gary Kostecki and Nikki Kern, senior vice presidents at Chicago-based Jones Lang LaSalle Inc. Cleverbridge was represented by Craig Braham, CEO of Chicago-based Advocate Commercial Real Estate Advisors, LLC.

The lease is for all of the seventh floor, including a mezzanine area, and a new penthouse and outdoor area atop the building, as well as part of the fifth floor, Mr. Vodnik said.

Cleverbridge started in 2005 in Cologne, with Mr. Vodnik opening a small U.S. office in the Monadnock Building in early 2006. After expanding several times in the historic building at 53 W. Jackson Blvd., Cleverbridge moved to 360 N. Michigan in 2009 and added the space at 333 N. Michigan in 2011, the Bensenville native said. Cleverbridge also has offices in Tokyo and San Francisco.

The firm is an e-commerce provider to companies that sell software and software as a service, with clients including Dell and Malwarebytes.

It had about $365 million in gross sales in 2012, with a projected annual growth of 20 percent, Mr. Vodnik said. The new space will accommodate at least 25 new employees in Chicago over time, he said.

Source:  Crain's Chicago