The Chicago “Google Effect”
Chicago’ Fulton Market has become the “hot-spot,” for start ups, yet there’s a hefty price tag to go with.
Last June, Google announced their new location in Chicago’ Fulton Market. Google signed a lease at 1000 W Fulton for a 200,000 square foot space built to hold 500 employees. The announcement has since caused a migration frenzy among tech companies, startups and entrepreneurs following the path of the technology giant.
Fulton Market is attracting many that want to be in on the buzz of the Midwest’s version of Silicon Valley. However, setting up camp in the shadow of such a mogul inevitably comes at a hefty price tag. Due to the rapidly changing neighborhood, there has been a concerted effort to accommodate all of the new found foot traffic.
“Given all the businesses and people moving to the area, the rental prices are skyrocketing, jumping by as much as $3-$5 (price per square foot) in just a year,” states William D. Himmelstein, Founder and CEO of Tenant Advisory Group. “As this area starts to price out the tech startups and entrepreneurs, they will look for the next hot “up-and-coming” location. An educated guess would lend toward the South Loop and surrounding areas filling that void.”
Despite the big move being scheduled for 2015, there have already been major adjustments to the size with an increase of 157,000 square footage of the space. As the ever-expanding company continues to rapidly increase its workforce, it seems to be only a matter of time before Google outgrows the new space and will eventually have to relocate again.
For Google’ size, their continuous relocation and expansion is inevitable. However, smaller startups and tech companies have to think long and hard before packing up and following the latest trend. Being in on the “buzz,” comes with a price. The necessary allocation of resources required to move locations would be much more wisely spent on finding an area that has not reached the height of its price hike.
Chicago Business Image of what’s cooking on the near west side.