Freight logistics firm eyes hiring spree at new River North office

Trucking company U.S. Xpress Enterprises is planning a hiring spree in Chicago and has leased a big new office in River North to make room for its growing local team.

In an expansion and relocation of its downtown office, the Chattanooga, Tenn.-based freight logistics firm has inked a 10-year deal for 40,000 square feet at 306 W. Erie St., the company and building owner North Wells Capital announced. U.S. Xpress will be the anchor tenant with three floors of the recently-expanded loft office property when it moves in early next year, relocating from a roughly 6,000-square-foot space it leases today at 216 W. Ohio St.

The deal stands out as a sizable new commitment to downtown office space amid a COVID-19 pandemic that has pushed many companies to rethink their workspace needs and, in many cases, shrink their office footprint after adjusting to life with remote workers. Companies during the first three months of the year collectively posted the worst quarter of downtown office demand in 11 years, pushing the downtown office vacancy rate to a record high, according to brokerage CBRE.

It's unclear how many people U.S. Xpress plans to hire in Chicago, but the firm said in a statement the new office has the capacity for around 150 employees. The firm is expected to hire tech-savvy workers locally for Xpress Technologies, its growing freight brokerage division, which contracts with third-party carriers for shipment. The company is also ramping up its technology arm to use artificial intelligence to more efficiently manage its fleet of thousands of trucks.

The publicly-traded company, which reported $1.7 billion in revenue last year, is the latest in a long line of third-party logistics and freight technology firms expanding in Chicago, a group that includes names like Echo Global Logistics, Coyote Logistics, FourKites and Project44. San Diego-based startup Flock Freight recently leased 15,000 square feet in a new Fulton Market building and plans to hire as many as 150 workers over the next year.

The 306 W. Erie building "offered an excellent opportunity to bring more of our skilled professionals together in the nation’s foremost transportation and logistics hub," Xpress Technologies President Joel Gard said in the statement.

The building, he added, "provides the open space necessary to design a modern workplace conducive to the hybrid style of individual work and onsite collaboration we believe post-COVID life will entail," the statement said.

U.S. Xpress will have signage on the 94,000-square-foot building, which North Wells completed in January as an expansion of the 45,000-square-foot existing building next door.

The lease is especially valuable for North Wells, which owns a bunch of loft office buildings in River North but has historically been a landlord for early-stage tech companies that have left for larger properties elsewhere in the city as they've grown. One of the reasons it expanded the Erie property in the first place was to have a place that could be a destination for companies rather than a stepping stone for nascent businesses that may or may not survive.

"Our entire thesis was we were so sick of underwriting all of these tenants (for which) you could barely figure out credit and whether they're going to be able to honor the lease," Lindsay said. "To have a publicly-traded company sign a 10-year, 40,000-square-foot lease is enormous for our development plans going forward."

Those immediate development plans include a 155,000-square-foot office building North Wells aims to develop next to the Erie building at 311 W. Huron St. Lindsay said conversations with prospective equity partners to finance that project "have gone from speculative to formative" since it signed the U.S. Xpress deal.

The U.S. Xpress deal brings the 306 W. Erie St. building to 85 percent leased, according to Lindsay. Co-working firm Workbox recently leased the building's third floor.

CBRE First Vice President Dan Persa represented U.S. Xpress in negotiating its new lease.

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