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871, a Chicago-based tech incubator, is leaving its longtime office at Vornado's Merchandise Mart due to the economic fallout of the pandemic and the rise of remote work. The move marks a significant shift for the organization, which had relied on steady rental income from tenants using its coworking and office spaces.

    The incubator occupied 120,000 square feet at the Merchandise Mart but will vacate the space by May 1. Despite being a driving force behind Chicago's startup boom, attracting companies like Google and Yelp to the area, 1871 found it financially unsustainable to continue leasing such a large space in light of decreased demand for physical office space.

    As remote work became more prevalent, 1871's tenant roster shrunk from 52 to 15, slashing rental income by over half. The nonprofit paid $3.1 million in rent at the Merchandise Mart in 2022, which accounted for about a third of its expenses. With annual revenue of $6 million, 1871 is confident it will maintain stability once free of the lease.

    The 25-story Merchandise Mart has remained relatively resilient compared to other office buildings, securing tenants like Medline and Grubhub following a major renovation. Chicago's office vacancy rate has climbed to 26.3 percent, leaving landlords with numerous unleased spaces.