Key Take Aways from Chicago’s March 2022 Mastermind Group Meeting!
• Corey Walz, Walz Capital: Corey has seen a shift in what they perceive as volume of viable deals in the market. Deals that they typically would find attractive for their group are being grabbed up by bigger players (who in the past typically didn’t look at them). As a result, the deals that used to be viable are becoming more compressed. It has been interesting for his group because they have to deal with this trend on a per deal basis. A little frustrating but it also means more activity/involvement in the market.
• Lauren Zangl, ECS Midwest – February was essentially a “normal” month, and they are still waiting on the EPA to approve some of the new standards. The labor challenges remain an issue – particularly securing project managers.
• Matt Berry, The John Buck Company: Focuses on capital markets so his emphasis is aligning his pipeline with capital sources. This has meant a profound shift to multi-family vs. office in recent years and mostly outside of Chicago. Chicago still struggles to garner the positive attention and leads the country in corporate relocations. There are a lot of opportunities available and land sellers know this but the timeframe to get appraisals and the other due diligence reports in the 30-day window is next to impossible. Because the turnaround times are taking longer, they find themselves missing out on many opportunities.
• Hart Passman, Elrod Friedman LLP: shared a situation regarding the City of Bellwood. Bellwood is an older community that was built in the pre-war years. Many of the homes were getting older and the existing residents were existing to buy newer homes vs. staying in Bellwood. The city decided to start building houses themselves, so the village started building houses and took the proceeds to buy the next one and have built 24 houses and sold 22 of them. Now they have a builder who is interested in building houses. Lesson translates to creating new opportunities when in a difficult situation and potentially collaborating with the public sector.
• Rick Rembusch, Digital Realty: shared a few highlights of their recent earning season. People are expanding in different ways globally. Everywhere from the U.S. to South Africa to Europe. From a macro economic standpoint, he has seen some share price depression because of the anticipated interest rate hikes and the Ukraine situation.
• Jeremy Chapman, HQO: HQO is a Boston based company; Jeremy is leading the business development efforts in Chicago. They work closely with buildings to help fill their space as well as retain existing occupants and facilitate everything from marketing to planning events in the buildings to bring them to life. Challenges they are seeing but are turning into nice tailwinds, is the great resignation. They are working with employers to help them attract employees while fostering retention of that employer as an occupant of their building.
• Aaron Tucker, Tucker Development: How to deal with construction costs is a big issue for them. In the win category, they got their lender to understand the supply chain issues so they were able to quadruple what they typically store offsite. They gave their contractor the freedom to buy as much as they could, and that strategy is paying off as they have the supplies in stock to complete projects on time. It was a great public-private partnership at the end of the day.
• Kim Stapleton, Ice Miller: Works with CFOs (80% of the time) and General Counsels. Kim shared a recent book she is reading titled Untapped Talent which talks about hiring previously convicted felons. She noted that it is very thought provoking and offers the opportunity to introduce a workforce that the real estate community could benefit from, and the hiring of these individuals also provides several tax credits.
• Katie Mulrenin, ICI: Their biggest challenge has been bringing on new talent. Just secured five strong project managers and have been fortunate to stay busy with several projects and, like most everyone else, staying on top of the supply chain to ensure projects get done timely.
• Lauren Zangl, ECS Midwest – February was essentially a “normal” month, and they are still waiting on the EPA to approve some of the new standards. The labor challenges remain an issue – particularly securing project managers.
• Matt Berry, The John Buck Company: Focuses on capital markets so his emphasis is aligning his pipeline with capital sources. This has meant a profound shift to multi-family vs. office in recent years and mostly outside of Chicago. Chicago still struggles to garner the positive attention and leads the country in corporate relocations. There are a lot of opportunities available and land sellers know this but the timeframe to get appraisals and the other due diligence reports in the 30-day window is next to impossible. Because the turnaround times are taking longer, they find themselves missing out on many opportunities.
• Hart Passman, Elrod Friedman LLP: shared a situation regarding the City of Bellwood. Bellwood is an older community that was built in the pre-war years. Many of the homes were getting older and the existing residents were existing to buy newer homes vs. staying in Bellwood. The city decided to start building houses themselves, so the village started building houses and took the proceeds to buy the next one and have built 24 houses and sold 22 of them. Now they have a builder who is interested in building houses. Lesson translates to creating new opportunities when in a difficult situation and potentially collaborating with the public sector.
• Rick Rembusch, Digital Realty: shared a few highlights of their recent earning season. People are expanding in different ways globally. Everywhere from the U.S. to South Africa to Europe. From a macro economic standpoint, he has seen some share price depression because of the anticipated interest rate hikes and the Ukraine situation.
• Jeremy Chapman, HQO: HQO is a Boston based company; Jeremy is leading the business development efforts in Chicago. They work closely with buildings to help fill their space as well as retain existing occupants and facilitate everything from marketing to planning events in the buildings to bring them to life. Challenges they are seeing but are turning into nice tailwinds, is the great resignation. They are working with employers to help them attract employees while fostering retention of that employer as an occupant of their building.
• Aaron Tucker, Tucker Development: How to deal with construction costs is a big issue for them. In the win category, they got their lender to understand the supply chain issues so they were able to quadruple what they typically store offsite. They gave their contractor the freedom to buy as much as they could, and that strategy is paying off as they have the supplies in stock to complete projects on time. It was a great public-private partnership at the end of the day.
• Kim Stapleton, Ice Miller: Works with CFOs (80% of the time) and General Counsels. Kim shared a recent book she is reading titled Untapped Talent which talks about hiring previously convicted felons. She noted that it is very thought provoking and offers the opportunity to introduce a workforce that the real estate community could benefit from, and the hiring of these individuals also provides several tax credits.
• Katie Mulrenin, ICI: Their biggest challenge has been bringing on new talent. Just secured five strong project managers and have been fortunate to stay busy with several projects and, like most everyone else, staying on top of the supply chain to ensure projects get done timely.
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