CRE N Illinois

Tech advances are accelerating transactions for Chicago real estate pros

The first physical store for digitally native shoe brand Koio, which recently opened on Armitage Avenue in Chicago’s Lincoln Park. The first physical store for digitally native shoe brand Koio, which recently opened on Armitage Avenue in Chicago’s Lincoln Park.
High visibility and market fundamentals, backed by hard data, drove Koio to Lincoln Park for their first physical location. High visibility and market fundamentals, backed by hard data, drove Koio to Lincoln Park for their first physical location.
Based on data showing great neighborhood fundamentals in the area around Mariano Park, a property at State and Cedar was able to command high rents. Based on data showing great neighborhood fundamentals in the area around Mariano Park, a property at State and Cedar was able to command high rents.

Mike Demetriou runs a power brokerage in Chicago retail real estate circles. More precisely, he runs an empowered brokerage.

Few firms, if any, have a better grasp of the retail market than Baum Realty Group, which represents retailers and retail investors across the U.S.

Demetriou doesn’t just rely on his own memory, voluminous as it is, to advise clients. He and his team aggregate a treasure trove of data from a variety of sources and access it on demand using Apto, a cloud-based software service for commercial real estate brokers.

Be it retail store sales volumes, lease rates, sale prices, traffic counts, demographics or information specific to a particular property or submarket, Demetriou’s team weighs it all. So whether they’re helping longtime client Tao Restaurant Group, one of the highest-grossing restaurant operators in the nation, or jewelry giant Kay Jewelers, Baum professionals are armed with the information they need for clients to make the best location decisions.

Location, location, location

“The right corner matters in retail,” Demetriou said, “and some corners are simply better than others.”

Demetriou cites two recent transactions to illustrate the point. In the first case, Baum Realty represented a sophisticated landlord in Chicago’s tony Gold Coast neighborhood. “The landlord was focused on making the most of their crown jewel asset, a once in generation corner available at State and Cedar overlooking Mariano Park.

“We were able to command a higher rent for this asset because we had the data to back up the marketing narrative painting State and Cedar as the epicenter of remarkably high retail store volumes, intense daytime traffic and exceptional neighborhood demographics,” Demetriou said. “We connected the landlord with online luggage phenomenon Away Travel, which will open a store there later this year.”

The second case was for Koio, a digitally native shoe brand which opened a Chicago store last week. “Koio had a very simple requirement which was to find a marquee corner with high visibility that also combined killer neighborhood demographics and thriving daytime traffic,” Demetriou said. “Centered in the middle of Chicago’s Lincoln Park, and visible from the ‘L,’ our internal data helped us encourage the location of Koio’s first physical store at the corner of Armitage and Bissell.”

Technology informs property pricing decisions

Pricing decisions also are increasingly informed by information technology, according to Annie Koch, director of operations at STREAM Capital Partners, which facilitates net-lease and sale-leaseback transactions.

“Cloud-based services are the standard and norm today to help establish and reinforce pricing,” Koch said. Her firm consults CoStar, LoopNet, Crexi and other sources for insight on sold properties, leased space and on-market property pricing, and maintains historical information in Apto on transactions her company has facilitated.

The depth of analytical data gets deeper every day, says Matt Jones, associate vice president of multifamily investments for Colliers International in Grand Rapids, Michigan.

“We’re not just talking population and demographics but information on the migration of people and businesses and capital, including what institutional players are doing and how they are allocating capital…who’s going where, what they are doing with their money when they get there,” Jones said. “The granularity of available data and the intelligence it provides is amazing.”

Another implication of the magnitude of available data, which is continually updated: landlords can set asking rents in real time based on market dynamics including the shifting balance of supply and demand.

Powerful as the data is, Koch says her firm relies on other forms of intelligence as well to help clients succeed. STREAM uses drone-based photography to see physical attributes of properties and to assess the proximity and condition of nearby sites and key infrastructure, be it another income property, residential, a highway or transit stop. Drone photography is easier and cheaper to obtain than traditional aerial photography.

Online deal rooms bring parties together

Not only are transaction outcomes better as a result of today’s technology and information services, they also are happening faster.

Jones uses Apto to manage his pipeline of new prospects, including buyers and sellers who may be interested in specific property types in specific locations. “The technology helps me track prospects, match prospects with properties, and target more likely prospects based on their behavior, past interest and expressed interest,” he said.

Jones also uses Real Capital Markets’ online deal rooms, which integrate with Apto, to facilitate transactions once a buyer and seller have been matched.

In an online deal room, parties on all sides of a transaction can share, view, store and sign documents in a security-protected environment. The host controls who has access to the information, and has visibility on where a deal stands at any moment. He or she gets notified when a document is signed or even reviewed, and can be reminded of next steps on the road to closing.

Confidentiality agreements, offering memorandums and all manner of due diligence materials can be stored in an online deal room.

“The facility speeds the whole transaction,” Jones said, “by reducing friction and eliminating headaches. You don’t have to remember who’s viewed which document or who’s signed what…it’s all tracked and stored by the system, so you’re continually aware of the transaction status and what to do next.”