Michigan Plaza’s New Outdoor East Plaza Has Major Tenant Appeal

Chicago, IL | September 22, 2022

Even before the pandemic, outdoor amenities were increasingly a lure for tenants. While new developments are futureproofing their tenant appeal with outdoor spaces, older buildings have to find creative ways to invest in nature-focused amenities. Solutions for buildings without outdoor space include balconies and terraces, rooftop gardens, and outside plazas. Michigan Plaza, 205 and 225 North Michigan Avenue, invested in a full floor of new amenities and an impressive lobby upgrade before settings sights on a new outside location for tenants to utilize. Michigan Plaza’s new East Plaza is a superb example of an older building getting it right when it comes to adding a touch of the great outdoors.

Construction on the two-tower Michigan Plaza finished in 1985, and the distinctive swooping red canopy that visually sets the property’s Front Plaza apart from other Michigan Avenue buildings was added in the early 2000s. The Front Plaza, which is on the southwest corner of the property, is now accompanied by the new East Plaza on the east side of 205 North Michigan Plaza. The Front Plaza welcomes thousands of visitors entering Michigan Plaza each day and offers the public and tenants alike ideal benches among distinctive foliage. But the building’s new East Plaza, an acre of robust outdoor space, is proving to be a worthy investment with an exclusive focus on tenants. The response from tenants since its opening in the fall of 2021 has been nothing but positive, according to Steve Hennessy, MBRE senior vice president and general manager of Michigan Plaza.

“Tenants say they love it,” Hennessy said. “We get constant compliments on the finished product and have yet to have one complaint. It really did turn out the best we could have hoped for.”

The one-acre outdoor terrace is a social hub ideal for casual meetings and after-work hangouts. The terrace contains a putting green, a fire pit, a cornhole court, and a bocce ball court. A large, bronze pergola on one end of the plaza has cozy patio seating and a large flatscreen television. The middle of the plaza includes modern, polyethylene resin furniture molded into gentle curves that are both eye-catching and comfortable. The East Plaza’s sections are cradled by thoughtful landscaping, with pleasant strips of raised greenery running throughout the space. The East Plaza is also conveniently placed, connected to other renovated and improved spaces within Michigan Plaza, including the updated tenant lounge, 14,000-square-foot fitness center, and lobby. Building out the space was a no-brainer.

“More and more prospective and current tenants were looking for other areas in the building where their employees can work remotely or take their lunches, have meetings, or just get away from the office for a time,” Hennessy said. “Even better if these spaces can be outdoor areas.”

MBRE Executive Vice President and Director of Leasing Mark Buth, one of MBRE’s brokers representing Michigan Plaza, said that the popularity of outdoor space downtown is similar to the demand for green-friendly buildings in recent years—Michigan Plaza obtained LEED Platinum certification in 2017. Viable outdoor space, Buth said, is a continuation of the “amenities arms race.”

“Tenants are more focused on natural light, employee well-being, access to fresh air, and other health and wellness initiatives,” Buth said. “And landlords want the environment of their buildings to be as enticing as possible. Everyone’s looking at their amenities, everyone’s raising the bar, and outdoor space is a continuation of that. Since a lot of buildings do not have outdoor space, it can really set a property apart.”

The benefits of an outdoor space like Michigan Plaza’s East Plaza are numerous. The most obvious: tenant retention. Employers have realized that they need incentives to get employees back into the office, and a premium outdoor space that’s easily activated is a big incentive. From meetings to work parties, there are a lot of ways to utilize an outdoor space like the East Plaza. The tenant amenity program has even hosted some fitness center activities outside, like yoga classes.

As Buth put it, “To get people back to the buildings, you need to offer unique amenities. There needs to be a reason why you leave your home and commute. The East Plaza is a tenant-specific amenity, too. You’ve got this unique access that’s for no one else. Tenants in other buildings are envious—there are definitely some jealous neighbors.”

The size of an outdoor space like the East Plaza, and its ability to accommodate large numbers of tenants, is another boon.

“Imagine your average tenant lounge. Even nice ones, if indoors, can often only fit 50 or 60 people. These days, if people peek into an indoor lounge and see that it looks crowded, they might pass,” Buth pointed out. “With an outdoor area like the East Plaza, which is roughly 40,000 square feet, we can accommodate 500 people. Come by, get a beer, putt a few balls—the space won’t be crowded, making it much more inviting.”

MBRE Vice President of Leasing Services Ashley Harrison, another MBRE broker representative for Michigan Plaza, elaborated further about the importance of making a space like the East Plaza easy to activate.

“We have a bocce court, a putting green, a fire pit, a lounge area with a TV that tenants can reserve. We’ve been able to elevate our tenant events,” Harrison said. “Before, if there was an event, like a Cubs game, that would be inside. Now, something like a Cubs game can be elevated by having it outside—the turnout on a beautiful day is great.”

The East Plaza is a big draw for prospective tenants, too.

“If outdoor space is a requirement for a tenant, you’re going to see more velocity and leasing,” Harrison noted. “Building outdoor space is being seen more and more in new buildings. Almost all of the new buildings in Fulton Market have it. But for the majority of pre-existing buildings, it’s a harder thing to achieve. Michigan Plaza now offers an excellent example of outdoor space, and it sets us apart.”

Simply adding some green in front of your building won’t cut it. Michigan Plaza’s 12-million-dollar investment into the East Plaza outdoor space speaks to the building’s commitment to exceeding tenant expectations.

“The nature of outdoor space has changed in the past five years. You can’t just put landscape in and call it an outdoor space. You have to make an effort to make it more inviting, or it won‘t get used,” Buth explained. “Part of that is adding activity zones. To have a combination of activities, to feel like you’re sitting in a park, it’s worth it.”

Less than a year after it opened, Michigan Plaza staff and tenants agree: the East Plaza buildout has been worth it.