Teragonia, a Chicago-based AI firm, has locked in a seven-year sublease for the fourth floor at 318 N. Carpenter Street in Fulton Market, taking roughly 16,000 square feet from logistics tenant Flock Freight. The deal lets the company move out of a coworking setup and build a permanent local hub as it works to scale its Chicago team over the next two years.
According to The Real Deal, Teragonia is taking about 16,000 square feet of the fourth floor on a seven-year term after Flock Freight put its two-story, roughly 31,000-square-foot footprint on the sublease market in 2023 but chose to hang on to the fifth floor. The arrangement highlights how smaller tech and AI outfits are leaning on subleases to land in high-end West Loop and Fulton Market buildings without jumping into full direct leases.
About the building
318 N. Carpenter is marketed as a seven-story office property with roughly 96,000 square feet of workspace and approximately 16,000-square-foot floor plates, according to the building’s listing. Murphy Development and Creek Lane Capital are credited with owning and developing the project, which they delivered in 2020, as detailed in a CBRE release covering lease activity at the address.
Sign of a tightening sublease market
The Teragonia deal lands at a moment when Chicago’s second-hand office inventory has retreated from its pandemic-era highs. Transwestern’s 2023 market fact sheets tracked roughly 8 million square feet of sublease listings across the city, while brokerage research from Bradford Allen pegged available sublease space at about 5.3 million square feet by the end of 2025. That drop helps explain why landlords and brokers say well-located, move-in-ready suites in Fulton Market are drawing renewed interest.
Brokers and Teragonia on the choice
Industry brokers have framed Teragonia’s move as a textbook example of how tenants are using subleases to snap up high-quality space on a faster timeline. According to The Real Deal, CBRE broker Tony Coglianese said the setup "positions [Teragonia] to scale efficiently while maintaining cost discipline per employee," while Stream Realty’s Phil Geiger noted that "moving subleases is not easy" and calls for aggressive marketing.
Teragonia CEO Thomas T. Thomas told the outlet the company "only looked in Fulton Market" as it recruited talent, and said the new office will support plans to roughly triple its Chicago headcount from about 25 employees over the next two years.
The company describes itself on its website as a provider of analytics and AI services to private-equity-backed firms in sectors such as distribution and health care. The Fulton Market location gives Teragonia a standalone address in a neighborhood known for restaurants, transit access and a deep hiring pool, which the CEO cited as the reason the company wanted to put down roots there.
