The Merchandise Mart is losing one of its oldest tenants to Fulton Market, as more companies flock to the trendy West Side neighborhood.
Global furniture maker KI announced this week that it’s leaving the Mart and setting up a Chicago showroom at 1045 on Fulton, taking up the entire eighth floor of the office property at 1045 W. Fulton St. KI anticipates moving in mid-2026, after its lease in the Mart ends.
1045 on Fulton was developed by Intercontinental Real Estate Corp. and Fulton Street Companies.
The Wisconsin-based manufacturer is the second tenant to announce its departure from the Mart in recent weeks. Tech incubator 1871 announced in February that it’s closing its space at the Mart due to financial pressures and a shifting business landscape since the COVID-19 pandemic.
KI Chief Sales and Marketing Manager Tony Besasie said the company had been in the Mart for about 50 years. The Mart has more than 250 design showrooms, including KI’s.
“We’ve had a great run at Merchandise Mart,” Besasie said. “They’ve been very good to us over the years, and this was just kind of a strategic decision for us.”
Manufacturers like KI have been moving to Fulton Market as the neighborhood develops new, trendy office buildings. Fulton Market Design Days, an event that includes an array of showrooms, pop-up activations and a welcome center, have also contributed to “a very contemporary and attractive culture for the design community,” Besasie said.
KI has seen many of its peers move to Fulton Market, Besasie said, further facilitating the move.
Its new space will include a showroom and double as an office for the local sales team and designers. Besasie said it’s roughly the same size as KI’s space in the Mart but features 360-degree windows and rooftop access.
The showroom will also include products from the company’s KI Wall and Pallas Textiles brands. KI is preparing to launch an outdoor line and hopes to showcase some of those products at 1045 on Fulton’s rooftop, Beasasie said.
“It’s got a lot of elements that we really like,” Besasie said, of 1045 on Fulton. “It’s not just a showroom in a building — it’s a storefront in a community.”
He said the company doesn’t anticipate any immediate new hires with the move.
“Our immediate focus right now is to make sure we have a great NeoCon — it’s our last NeoCon at Merchandise Mart — and then really prepare for the showroom,” Besasie said. NeoCon is one of the leading commercial design trade shows.
The Mart is home to PayPal, Motorola Mobility and health care incubator Matter, as well as Conagra Brands, Allstate, Medline Industries, Beam Suntory, Avant and Grainger.
Downtown Chicago’s office vacancy rate hit a record high of 23.2% in the fourth quarter of 2024, up from 22% at midyear, according to real estate firm Bradford Allen.
The Mart’s vacancy is lower than downtown Chicago, with occupancy at 80.1% as of Dec. 31, 2024, according to the landlord Vornado Realty’s fourth quarter earnings.
Contributing: Amy Yee