9/9/21 Chicago Mastermind Group Meeting

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

• AJ Jacobs – WE O’Neil focuses on larger construction projects as a general contractor. Seeing a trend towards projects focused on the short-term, “band-aid” case-by-case approach to moving forward with projects. There is a kicking the can mentality, as much as possible, due to the volatility of different markets and availability/cost of materials.
• Hunter Cannon – Colliers focuses on retail advisory, sales and leasing. Industrial real-estate has blown up and Colliers is a major player in that area. When asked about the status of retail in Chicago – vacancy rates are up. There are new users in the market that are expanding, which provides a promising outlook.
• Hart Passman – Elrod Friedman LLP in the area of Land Use & Municipal law. Performs a lot of zoning and development work. Questions he is being asked: what is going to happen to office? Suburban office markets are different. In part because suburban municipalities are slower to respond – more reactive than proactive. What is going to happen to work in the suburbs? Overall, there is not much interest in suburban office space. Downtown office is leaning towards “mass flexibility” – work where you want/when you want. Office in general is more susceptible to market shifts.
• Kevin Lewis – IG Consulting focuses on early development surveying and site development through civil engineering plans. Works in both the commercial, residential and institutional/industrial segments. Commercial retail market has dried-up, similar to how the residential market dropped in 2008. Expects the suburban residential market will continue to be stronger than the urban market. Beginning to see a lot of foreclosures on retail property.
• Dennis Moynihan – The Horton Group is the largest employee-owned commercial insurance group in Illinois. Personally owns 165 apt. units. Soon to add another 75. He is seeing multi-family increases in rent. It is a good time to be in the multi-family space as the value has gone up along with the residential market.
• Matt Brodsky – Bellweather Enterprise Real Estate Capital – a Commercial Broker working with Freddie and Fannie loans. Both are pulling back this year due to annual caps, making it challenging to get deals done this calendar year. Q42021 will open up as those deals will close in 2022 and therefore don’t fall in the current cap.
• Nick Yassan – Rany Management is a multi-family investor with on-site retail units. Seeing opportunity in value-add mixed-use buildings. There are good deals on the retail portion, which offsets the residential. A differentiator – he does the white box build-out for the tenant. Very bullish on Chicago. Just need to be in a position to weather the storm.
• Jim Dash – Carlson Dash is a general business practice law firm, with a concentration in business construction and design, including dispute resolution. What he is hearing from his clients: backlogs are declining, but they are not digging deep for business, yet. Directly he sees is a change in the volume of agreements and disputes. Not seeing economically induced project failures. But he expects they are coming.
• Joe Calvancio – J2C Valuation is a is a full-service property valuation and advisory service firm with over 35 years of national experience and local expertise. Heavy emphasis in property taxes and appeals. Also does estate tax work and litigation support. Supports attorneys in Chicago doing property tax appeals. Seeing a lot of opportunity for property tax appeals at the local level. However, there is 3-year backlogs in state courts for property tax reviews.
• Duk Kim – Stantec Architecture in the Buildings Group. Concentration on architecture and interiors. Chicago focus on multi-family and hospitality. The pandemic only exacerbated/sped up the trend that was already in place regarding retail and office. Seeing volatility in most sectors. Developers were waiting for bottom to drop, but it hasn’t happened. Now they are being forced to make moves. Construction costs are impacting this volatility. Current projects are scrambling due to supply chain and cost issues. Leisure market on fire. Hospitality still struggling.