Level Office buys five-storey building in Chicago
Level Office, a coworking startup based in Chicago, has spent $5m to acquire a five-storey River North loft building, with plans to turn it into a coworking space. It is the company’s third space in the city, alongside other locations in Dallas, Charlotte, Seattle, Jacksonville and Houston. Level Office faces stiff competition from rival coworking businesses such as Regus and WeWork, but founder Bill Bennett, who buys his buildings to pass on the savings to his clients, said: “Other people can't break even at the rents we charge”.

Level Office, a co-working firm, has bought a River North loft building that it plans to convert into shared office space, its fourth location in the city.

The Chicago-based company said it paid $5.2 million for the five-story building at 420 W. Huron St. and has already begun marketing it to prospective tenants. Level Office is one of several businesses in the fast-growing co-working market, where entrepreneurs and professionals pay membership fees to work in stylish and amenity-rich shared office spaces. The firm's River North building will include local beer on tap.

Founded in 2013, Level Office now has three spaces in Chicago: one in the West Loop, at 318 W. Adams St., and two in the Loop, at 73 W. Monroe St. and 211 W. Wacker Drive. The company is almost at capacity in Chicago, and it began hunting in River North—ultimately looking at more than 30 buildings in the neighborhood—after hearing from tenants who said they wanted to be there, founder Bill Bennett said.

Bennett has ambitious plans for Level Office, which has 10 locations nationwide, in Charlotte, N.C., Dallas, Houston, Seattle and Jacksonville, Fla. He aims to expand to 50 by 2019, though he doesn't have any immediate plans for more locations here.

In Chicago, Level Office competes with bigger rivals like WeWork, Regus and Industrious. But Bennett contends that Level Office has an edge because it owns its spaces instead of leasing them, allowing it to charge prices 30 to 50 percent below its rivals'. Level Office memberships start at $199 a month.

With more people working on a freelance basis and others seeking more flexible work environments, Bennett expects demand for shared office space to keep growing. In Chicago, however, the industry has expanded so aggressively that there's more space than the market needs right now, he said.

“All the trends have been in co-working's favor, but it all comes down to supply and demand,” he said. “There could be some pain in the future.”

But that statement doesn't apply to Level Office, according to Bennett.

“I'm the low-cost player,” he said. “Other people can't break even at the rents we charge.”

A WeWork spokesman declined to comment. Regus and Industrious representatives were not immediately available.

Level Office bought the 34,000-square-foot River North building, which was built in 1918, from an affiliate of Cushing, a printing firm that plans to move out.