News from the Chicago Chapter

IREM Chicago Panel Agree: Major Asset Classes Continue Robust Performance Midway in 2017

Five Chapter 23 Members Installed at June Chapter Luncheon and Mid-Year Market Review

The upsurge of leasing and development across the four major commercial property asset classes in the metropolitan Chicago market should continue well into 2018 and perhaps longer, a testimony to the resiliency of the region and its diverse economy.

Four CRE professionals shared this perspective while serving on the panel at the IREM Chicago June Chapter Lunch and Mid-Year Market Review held June 28. For the second consecutive year, panelists at this popular Chapter 23 presentation were exceedingly optimistic about the outlook for the Chicago market.

The discussion was moderated by Danny Nikitas, principal of Avison Young. Here are capsule perspectives from the panelists:

  • Gail Lissner, CRE, SRA, Vice President at Appraisal Research Counselors.  Delivery of new apartment units in downtown Chicago has been on a record pace, with 3,800 new units for lease in 2016, 4,500 projected for 2017 and 3,500 by year-end 2018. Developers have also tapped into the burgeoning neighborhoods north and northwest of the Loop, with some 2,700 units under construction. Apartment development in the suburbs, is also on the upswing, with 2,700 new units online last year and an equal number projected for this year.

  • Rawly Lantz, Executive Vice President at Cawley Chicago. A “Top 6 List” of current trends for the office market included: Some uncertainty regarding the prospect of 2017 representing the end of the sector’s upward cycle, challenges in capitalizing on co-working office spaces, and owners asking for higher rental rates. The list rounded out with: A large amount of construction activity, uncertainty over bus transportation services offered by some suburban landlords, and the growing impact of technology.

  • Deena Zimmerman, Vice President of Sperry Van Ness. “Retail is here to stay!” Zimmerman proclaimed, citing major industry developments like the Amazon purchase of Whole Foods as an example of the sector’s resiliency. National retailers like Target will continue to open new stores, but with a smaller footprint of 15,000 to 20,000 square feet. Discount retailers like Nordstrom Rack and TJ Maxx remain strong in both the city and suburbs, and shopping center landlords are filling space with fitness centers and yoga studios.

  • Susan Bergdoll, Vice President at Duke Realty. The Chicago industrial sector remains strong, having experienced its 20th consecutive quarter of positive absorption. And, the outlook for growth could continue into 2018. One concern: A sizable percentage of big-box industrial space remains under development and will take months or years for delivery. This factor may lead to an oversupply by 2019. The biggest local project: A 1.5 million-square-foot build-to-suit development for General Mills in Wilmington’s RidgePort Logistics Center.

Prior to the panel discussion, the Chapter installed these member for earning IREM designations:

  • Gloria Fay, CPM®, Related Companies
  • Veekash Sharma, CPM®
  • William Tyler, CPM®, Roosevelt University
  • Jennifer Valentini, CPM®, Blue Star Properties
  • Paul Crump, ARM®

Also, June McCrory, CPM® and Katelin Dorsey, CPM® noted that $2,600 was raised at the June 15 fundraiser for Camp I Am Me, the Chapter’s 2017 official charity, and many members and volunteers participated Fun Fair June 21. Foursomes were sold out for the Golf Outing August 7 at Kemper Lakes Golf Club. Members were asked to donate tickets, electronics and other items to the Silent Auction, with all proceeds benefiting Camp I Am Me.

Angela Aeschliman, CPM®, thanked the CCIM Institute for supporting the meeting and luncheon, and she recognized these Industry Partners as sponsors: