Friday, August 21, 2020

Digital arts school looks to sublease Loop home

 

Digital arts school looks to sublease Loop home

Flashpoint Chicago is moving its downtown campus to Roosevelt University as it looks to cut costs amid the COVID-19 crisis.

DANNY ECKER  

The Burnham Center at 111 W. Washington St

 


Flashpoint Chicago has put its Loop campus up for sublease, joining the crowd of downtown tenants trying to offload real estate amid the coronavirus pandemic.

The digital arts and media school this month listed its nearly 38,000-square-foot classroom and studio space in the Burnham Center at 111 W. Washington St. after recently announcing a deal to move its campus to Roosevelt University's building at 425 S. Wabash Ave.

 

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Formerly known as Tribeca Flashpoint College before it was acquired in 2018 by Los Angeles-based film and arts school Columbia College Hollywood, Flashpoint restructured its space at the Burnham Center less than a year ago. It vacated the fifth floor at the historic building but retained the sixth floor on a lease that runs through August 2027. But with classes running virtually this summer because of the COVID-19 crisis, Columbia College Hollywood President and CEO Bill Smith announced July 28 that the school had reached an agreement with Roosevelt to move its Loop campus to the Wabash building but remain an independent institution.

"It's partly economic and partly strategic," Smith said of the effort to offload its Burnham Center space, adding that he expects virtual classes will continue "at least through the end of the year."

"Every institution in higher education has been upended thanks to the pandemic," he said. "As the world changes, you're just trying to be as efficient as you can."

Flashpoint's move underscores both the struggle colleges are enduring as the coronavirus jeopardizes their ability to hold classes in person and the pandemic's impact on a downtown office market that is suddenly awash in available space for sublease.

As of early this month, the amount of sublease space on the downtown market had risen by 26 percent since April 1 and 47 percent since the beginning of the year to 4.1 million square feet, according to brokerage CBRE. That helped drive up the overall downtown office vacancy rate to its highest mark since 2011, CBRE data shows.

Many of the secondary market listings are gently used spaces, creating formidable competition for landlords hunting for tenants. In one new offering, construction firm Skender listed its 38,000-square-foot headquarters at 1330 W. Fulton St. in the Fulton Market District, where it moved when the building was completed in 2017.

Flashpoint, which offers bachelor's degrees in cinema, graphic design and visual effects among other liberal arts programs, has housed its Loop campus at the Burnham Center since it was founded in 2007 by Chicago entrepreneur Howard Tullman. With enrollment of about 600 students in 2012, the school signed a 15-year lease extension in the building that would have allowed it to expand to as much as 150,000 square feet and give it room to double its student capacity.

But enrollment has shrunk since then: The school has about 200 students for its summer 2020 session and expects to have close to 300 in the fall, Smith said.

Higher education institutions have historically seen enrollment rise during economic downturns as the unemployed hunt for new career training. But Smith said it's "anybody's guess" whether that will be the case with the circumstances presented by the pandemic.

"Some of these students are making so many choices—taking time off, taking classes remotely, taking less classes," he said. "It has impacted us in a number of ways."

With expenses mostly unchanged, however, tuition for Flashpoint Chicago remains the same at around $25,000 per year despite classes running virtually.

Flashpoint's space at the Burnham Center stands out from many other offices on the sublease market with its built-in sound design and music recording space, said Michael Richwine of brokerage @properties Commercial, which is marketing the space on behalf of Flashpoint Chicago.

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