Key Take Aways from Chicago’s December 2021 Mastermind Group Meeting!
- Matt Berry – The John Buck Company – Shared that he is seeing softness in the office market. Return to office has not occurred at the rate anticipated six months ago. Question if absorption will keep up with development pipelines. Distress in the marketplace is yielding opportunities. However, the Omicron variant adds to the market instability.
- Lauren Zangl – ECS Midwest – The Air Quality impact assessments Lauren reported on last month, imposed by the City of Chicago, are beginning to move forward.
- Corey Walz – Walz Capital – Seeing continued strength in medical industry regarding profits. However, local regional credit where they previously found good return, has now been compressed.
- Hunter Cannon – Colliers International – 80% of his business is representing ownership. He is seeing an explosion in fast casual restaurants.
- Dan Brennan – Laurie & Brennan – Shared that most recently on the development side they have been busy with affordable housing projects and senior housing. Most projects are not in Chicago. Activity is in Denver, Texas, D.C., Nashville, and Pittsburgh.
- Hart Passman- Elrod Friedman LLP– Addressed the recent news regarding the Chicago ward map. The deadline to pass a new map has passed. The issue is how the map will reflect the changing demographic breakdown in the city. There is a chance that a map may be presented by way of a referendum next spring if 41 Alderman do not align.
- Chris Metcalf – Inland Bank & Trust – Chris is the head of commercial real estate lending. Lends to all asset classes. Currently he is the interim Manager of “work-outs.” Chris shared that he recently closed on a retail property in Lake County with a cannabis tenant. The bank won’t lend to the dispensary owner but will lend to the landlord.
- Ryan Morris – Bellwether Enterprise Real Estate Capital – Current high level of liquidity is creating tension in the capital markets.
- Shabbir Chandabhai – Burhami Design Architects –This is an exciting time in development around the city of Chicago. He is seeing a shift from downtown to the south and western sides of the city. Specific focus on small and mid-sized neighborhood projects. Developers are looking for existing space to repurpose, mostly for entertainment purposes. Seeing increased activity near the Obama Center as well. Overall, a shift from central city to neighborhoods.
- Richard Scanland – CBIZ – In the beginning of 2021, there were questions regarding 1031 exchanges. CBIZ continues to work with clients to strategize and prepare should 1031 go away. Future of 1031 is still uncertain.
- Joe Grody – Cornerstone Commercial Partners – The firm is opening an office in Florida due to increased activity in the state. End cap drive-thru space is at a premium. Staffing continues to be an issue with restaurants. Supply chain is the greatest hurdle for retail. Michigan Avenue going through a re-invention phase as retailers vacate. Anticipates up to 10 years before Michigan Avenue recovers. State Street is becoming the new downtown shopping center. Randolph Street is also attracting Michigan Avenue type retailers.
- Joshua Kohlenbrener – Green Courte Partners–They have investments in parking, and a portfolio of active adult and senior housing, including land-lease developments. Increased senior housing activity in the sun belt. Cottage style senior housing is a new trend. Chicago does not currently allow pre-cast/manufactured housing. Codes and union influence make it cost-prohibitive in Chicago.
- Heather Morrison – MAP Strategies – Founder and CEO at MAP Strategies (MAPS), a compliance partner that works with developers and successfully manages large-scale projects. Heather manages the pre-construction process to navigate codes, regulations and permits, to save time and money for clients, and to make design better. Currently she is working on Lincoln Yards South and recently completed the Tribune Tower project.
- Sachin Batra – VRB Capital – Managing Partner at VRB Capital, a private real estate investment firm focused on investing in notes/loans secured by multifamily and hotel properties nationwide. Goal is to provide consistent returns with passive cash flow for partners. He is noticing that banks want to get rid of retail they have on paper, especially in NY.
- John Skalla – Transwestern –Noted that it is difficult for investors to see the initial costs of datacenters. Heavy on the equity up front. Opportunity is in secondary and tertiary markets. Seeing increase in crypto mining space.
Speaker: Stacie Young – President and CEO at Community Investment Corporation (CIC), a non-profit working in Metro-Chicago. CIC is the Chicago area’s top lender for the acquisition and rehab of affordable multifamily housing in low- and moderate-income communities. To date, CIC has provided over $1.6 billion to rehab and preserve 64,000 units of affordable rental housing.
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