CRE N Illinois

Chicago 2020 focus from the Chicago Real Estate Forecast

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(From left to right:) Dan Ryan, James D. Letchinger, Andrea Zopp, Kent Swanson and Keating Crown.

There is so much about the City of Chicago that is vibrant and good—including the investment the commercial real estate and related business communities continue to make across all areas of the city. At the same time, there is much that requires further focus, clarity and vision to make the city second to none—not just in 2020, but for decades to come.

For the 16th annual Commercial Real Estate Forecast conference on January 17, REjournals assembled a panel of experts to take a closer look at Chicago’s positioning as a world class city, the recent accomplishments that reinforce that status, the aggressive commercial real estate initiatives that can help to maintain that positioning and the areas in which it needs to improve to remain a destination for residents and corporations alike.

Dan Ryan, president, central region at JLL, moderated the panel of business, civic and community leaders. Joining the discussion were Keating Crown, principal at Sterling Bay Companies; James D. Letchinger, president and founder of JDL Development; Kent Swanson, executive vice president at Riverside Investment & Development and Andrea Zopp, World Business Chicago’s president and CEO.

In terms of growth in the downtown core, the panel agreed that the high-profile corporate relocations into Chicago are due to the city’s many attractive features, including low cost of living, strong talent pool, central national location, robust infrastructure and culture. Zopp, Rahm Emanuel’s former deputy mayor of Chicago, highlighted a number of metrics that the city has improved on recently, including stabilizing finances and pension funds, better CPS student performance and a reduction in crime rates.

According to her, there is a direct correlation between these improvements and investment availability. “We’ve been the leading city for the past five years for foreign direct investment,” Zopp said. “It’s about continuing to build on the things we have done.”

While Chicago has many ideal traits with which to promote, state finances, specifically the impasse over pension funding, may hold back some progress. “I think it’s incredibly important this election cycle that we demand our leadership address and have honest conversation about the compromises and issues that have to happen to get us on track,” said Swanson.

Illinois’ fiscal state—and the dearth of a plan to address it—is creating uncertainty in the marketplace, which might scare off companies and investors. “I think unknowns are what scare corporations,” Swanson said.

The panel also discussed the impact of market disruptors. While gig economy companies like Airbnb and Uber receive a lot of attention, the panel recognized other agitators to the commercial real estate market. An aging population, for example, will change what buildings we erect and in what manner. People living longer means second careers, more senior housing and other considerations.

And while Uber is certainly a factor (the service is driving developers to include more curb cuts and drop-off areas approaching office and residential buildings), there are other infrastructure and parking concerns. When designing large-scale parking garages, Crown said they are reconsidering how to design the top few floors. “We’re looking at adding a foot or two to ultimately convert those down the road if they’re unnecessary or not needed,” he said.

Overall, the panel sees a rosy forecast for Chicago’s economy and real estate market, to 2020 and beyond. “Anybody who grows up in Wisconsin, Indiana, Ohio, Michigan, Kansas and Missouri, they strive to move to Chicago,” Letchinger said. “We are the economic driver of the Midwest.”