Nearly three months after announcing plans to move into a new 400,000-square-foot office in River North---and add 2,000 more jobs---Outcome Health is now backing out of its lease.
Outcome said Thursday that it has terminated its lease at 515 N. State St., a building that was going to be named "Outcome Tower" and hold over 2,000 employees by 2022. Outcome, which provides digital wallboards to doctors offices and makes revenue by selling ads, is facing allegations that it misled advertisers and investors about the effectiveness of those ads.
Outcome's investors, which include Alphabet, Goldman Sachs, and Chicago’s Pritzker Group Venture Capital, have sued the Chicago tech company for fraud.
The lease termination is the latest blow for Outcome, which has been reeling ever since the Wall Street Journal first published details in October that several Outcome employees manipulated advertising data and reported inflated stats. The Wall Street Journal found that Outcome was charging pharmaceutical companies for ad placements on more screens than it had actually installed, and some employees provided misleading data about how well the ads performed.
Outcome, which had around 600 employees earlier this year, gave buyouts to around 200 employees, gutting its headcount by a third. Now, with the company's growth plans halted, it no longer needs the new office space.
“All parties agree this was in their mutual best interest,” said a joint statement from Outcome and the building’s owners, Beacon Capital Partners, Callahan Capital Properties and Ivanhoe Cambridge.
“Our focus right now is on making decisions that will help Outcome Health to continue to be successful in 2018,” Shah added the statement, according to the Tribune. “We appreciate the flexibility of the building owners to work with us in reaching this agreement.”
Axing plans for its new headquarters marks yet another chapter in Outcome's tumultuous 2017. In May, the company raised more than $500 million from investors, making it the most valuable tech startup in Chicago at over $5 billion. Its River North office was a sign of growth for the once-promising tech company.
