6/3/21 Chicago Mastermind Group Meeting

Key Take Aways from Chicago’s June 2021 Mastermind Group Meeting!

• Brandon Svec: Multi-family – Seeing some strong trends downtown after a rough winter (up about 10%). Retail – store closures are slowing and leases are improving. Industrial continues to hit new record highs. Office is the only sector that haven’t seen a substantial rebound yet. They anticipate this to improve as corporations start to commit and make longer term decisions. In the meantime, there is a ton of available space and it will take time to fill that space.
• Todd McCollister – Todd’s firm is at pre-pandemic levels. They recently worked on a unique project that involved an automotive dealership built over landfill materials in Tennessee and the project is still ongoing.
• AJ Jacobs: Escalations in prices continues to be the hot topic in construction. Trying to determine how long it will last and how contractors can mitigate their risk. His firm’s opinion is there will be six more months of this bubble and should start to go down some time in 2022.
• Corey Waltz: Seeing a lot of product hitting and leaving the market quickly. A lot of cash offers and short due diligence; people are now hedging more risky investments. Seeing a lot of brokerage houses (medical specific) moving some of their profits into the investment space as an opportunity to get into the medical market but with a brokerage arm.
• Lee Utke: Currently in the process of evaluating and assessing 200 sites around the country. They are a cash buyer and their goal is to purchase 150-200 sites a year (they purchase portfolios). Very competitive market.
• Hart Passman: Still not a lot of development that requires zoning relief; owners and investors are still not willing to tie up money when not sure of the outcome. Hoping to see this turnaround soon. This past Monday ended the end of the spring legislative session in Springfield. There was a proposal to amend the TIFF statue that was highly debated.
• Dan Brennan: Dan’s practice focuses on project inception to dispute resolution. Most of his work is on the owner development side. Has also done a lot of work in the medical/hospital space as well. Whether clients are owner developers or contractors, supply chain interruption, price escalation, etc. is a real headache right now. He has been through this before when it was one or two commodities, but now there is like ten or fifteen commodities (or materials) that are unpredictable or unreliable regardless if it is related to the pandemic or other demand factors.
• Jack McKinney Jr.: Stream Realty is prominent in Texas but are now making their presence in the Chicago market. They focus on leasing but tend to be a developer and owner too. They have not seen the optimism we are feeling now since February of 2020 and the loop appears to be stirring back to life too. Despite the narrative a year ago about the flight to the suburbs, and the death of the office, they are not seeing any of that happening now. A few companies have left Chicago but many have not.
• Mike Spirovski: Hearing rumblings on the equity side whether developments or acquisitions. He is seeing more hotels coming into the marketplace (some due to a distressed situation) as well as new development. Overall Mike is bullish and is seeing volume pick up.