CHICAGO (Reuters) - FOR LET: 36,000 square-foot (3,345 square-meter) cave in central Chicago. Three-story ceilings, cutting-edge fiber optic feeds, historic art deco setting. Ten pits available, perfect for lounging. Jackets not included.
When CME Group Inc’s futures pits in the cavernous trading floor at the Chicago Board of Trade building fall quiet next month, real estate broker Holly Duran will be working overtime to find a tenant to occupy a storied piece of America’s financial history.
Prospective candidates could include big trading companies like BP Plc, whose hundreds of Chicago-based traders now occupy another former CME trading floor two blocks away, or tech firms like CoCo, an incubator that brought tents and beanbags onto the floor of the former grain exchange in Minneapolis.
“There’s not a lot of high-ceiling unique office space in Chicago,” said Duran, who has advised CME Group on its property holdings since 1980.
July 6 will mark the end of more than eight decades of open-outcry grain futures trading at the landmark Chicago Board of Trade Building, the art deco masterpiece housing the raucous trading pits that came to be seen as a symbol of turbulent capitalism reshaping the world. CME is closing the pits due to the rise of electronic trading.
Now, the vast space once filled with thousands of arm-waving, hoarse-voiced traders, runners and clerks will be home to as-yet unknown new inhabitants lured, perhaps, by a super-fast, sophisticated telecommunications network, or the retro charm of 10 octagonal pits - with steps up the outside and then down into an arena-like space in the middle - where trading was conducted.
At an asking price of $30 a year per square foot, the 36,000 square-foot exchange floor - plus overhanging viewing galleries with another 15,000 square feet (1,394 sm), and 27,000 square feet (2,508 sm) of related space on the upper floor - could go for more than $2 million a year.
“Depending on the user, the space may warrant a premium,” said Duran. If a business needs more space, there is another 100,000 square feet (9,290 sm) or more available in the building. Financial services, social media, the startup world, advertising or the financial-technology industry are all potential clients, she said.
Agricultural futures such as corn and wheat have been traded in downtown Chicago for a century and a half, and moved into the existing building when it was built in 1930. The floor that is now being shut down dates back to 1982, a time when the Chicago Board of Trade was growing with the explosion of financial futures contracts as well as commodities.
The CME sold the Chicago Board of Trade building in 2012 to a consortium including GlenStar Properties, and then signed a 15-year lease-back on the agricultural trading floor and other office space in the building, even though the faster and more efficient electronic matching of bids and offers meant that only 2 percent of futures volumes were floor-based. Keeping the floor open gave customers time to adjust to the volume shift to the screen, CME said.
The three-story interior space has the feel of a sports arena, but darker. Glassed-in galleries look down on the floor, and massive electronic price boards flicker red, green and yellow on all sides. On a recent visit, the pits were still active, though less frenzied than in years past. Dozens of traders still stood in the pits, wearing laptops supported on harnesses around their necks, talking on cell phones, flashing their distinctive hand signals and shouting out orders.
The CME is among the last big exchanges in the world to shut down its pits.
Another exchange trading floor in the same CBOT building was taken over by investment firm Peak6 for its in-house trading operation; one smaller commodities exchange a few blocks away became a gym.
CME also had a large exchange floor on Chicago’s South Wacker Drive, which was completely made-over for oil company BP, for its own trading floor, after CME merged with CBOT in 2007 and consolidated all of its Chicago exchanges into the CBOT building at LaSalle and Jackson.
“The large volume of space and the lack of windows created our toughest challenge,” said Lisa Adkins, a project manager for Gensler architects who worked on the design for BP. They created mezzanines to extend workplace areas over the big room, and added an undulating ceiling for visual interest, she said.
Some renovations are also in order before new tenants arrive at the CBOT as soon as the fourth quarter, Duran said.
Contractors will block the large open passageway that leads from the grains floor onto CME’s financial derivatives trading floor, which is staying open. Most of the pits will be filled in, leaving one as a casual meeting area for employees, according to a mock-up created by New York architects CannonDesign.
And windows long covered by vast price boards and displays will be revealed.
“It’s like night and day once you pop in windows. You have this soaring height,” said Duran.
Additional reporting by Christine Stebbins in Chicago; Editing by Jonathan Leff and Matthew Lewis