Key Take Aways from Chicago’s August 2022 Mastermind Group Meeting!
- Hart Passman, Elrod Friedman LLP: Seeing development happening in the city and suburbs despite hearing otherwise from others in the industry – the narrative seems to be contradictory. Local developers are still invested, but out-of-state developers are not investing. Likewise, local developers are struggling with out-of-state investors. Chicago’s tight regulatory environment creates hurdles. Hart noted that he continues to do zoning approvals in the city. Chicago is offering new incentives for development near transportation. The program is modeled after NYC, which has been successful.
- Hunter Cannon, Colliers International: Has been focused on the growing trend for MedTail (medical retail). MedTail has grown due to the need for specialized, affordable, and convenient access to healthcare. Hunter also noted that he is seeing health retail activity in Chicago – mostly national retail chains. Also seeing mixed use retail and adaptive use.
- Michael Mitro, Royal Oak: The banking industry is pulling back. Cost of capital is going up – cap rates were 5-6, now 6-7. Office cap rates are up to 8%. His company is still interested in Chicago. It’s a process, but once you navigate through, it becomes easier.
- Jody Nord, J2C Valuation: The cannabis growth market is creating competition with industrial developments, by purchasing vacated large box stores. Jody expressed concern over the impact of Amazon on industrial developments
- Patrick Ainsworth, Village of Wheeling: Village offers a grant program to help launch food and beverage businesses using TIF regulations to administer the program. They are having success reactivating properties to productive use. Encourages developers to share intel with government officials – help them understand – co-create opportunities.
- Mark Mockus, Norr: Retail architect, currently focused on restaurants. Company based in Toronto with office in Chicago for past15 years. As a retail architect, the trend has always been that he is busiest during a recession. Seeing huge delays in first review and permitting, which is impacting funding. He has a “side hustle” building net-zero passive single-family homes.
- Lauren Zangl, ECS Midwest: One of her clients is redeveloping property into a truck depot and asked ECS to do a mini assessment to help address community concerns at a public meeting. The process may result in a new offering to industrial developers. Phase I continues to be backlogged nationwide. Not seeing a slowdown, yet.
- Jake Marmulstein, Groundbreaker: Helps real estate operators modernize their fundraising process. Provides the investor portal. Investors login and see available deals. Transactions and documents are managed through platform. 80% of multi-family are less than 10M. Seeing influx of people getting into multi-family deals.
- Steven Vance, Chicago Cityscape: Tailors data and policy information for Chicago.
TOD/ETOD – Equitable Transit Orientated Development
Significant revisions to previous TOD policy
- Promote higher density and mixed-use development near transit
- Diminish car use
- Within four blocks of CTA or Metra station
- 50% parking reduction as of right (allows up zoning)
- Bonuses tied to accessibility & affordability
- Deconversions banned in large swathes of the city – goal is to retain existing housing stock and affordability
Cityscape platform provides easily accessible data and mapping on TOD status. Deconversion status. TOD went into effect immediately. No publication period.
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