Industry Experts Debate Chicago’s Multifamily Future
Real estate professionals gathered last week to discuss the Windy City’s biggest real estate challenges and opportunities during the Lincoln Park Builders of Chicago’s annual Real Estate Forum.
The opportunity to learn from experts was as rich as ever last Thursday evening, when the Lincoln Park Builders of Chicago convened its annual Real Estate Forum in a new locale, the recently renovated Theater on the Lake, off Lake Shore Drive on Chicago’s Near North Side.
There’d be no beach volleyball on this bone-chilling November eve. But that didn’t mean an absence of volleys, those of the conversational variety. The highlight of the night as always was an energetic panel discussion involving five veteran real estate professionals.
Moderator Sam Goldman, founder and principal of Chicago-based Arbor Investment Management LLC, opened the discussion by prohibiting his quintet from mentioning two topic areas. Though seniors and the Generation Z cohort were fair game, panelists were barred from uttering the word “Millennials.”
“Second and tougher to adhere to, there will be no baseball analogies,” Goldman announced, to laughs from the huge audience. “No home runs, no eighth-inning rallies.”
Asked by Goldman to name the Windy City’s biggest real estate opportunities over the coming decade, the panelists served up widely varying responses, from transit-oriented development to solving education inequality to what the new mayor might deliver.
But the panel was less divided on the issue of how a changing business economy would impact real estate development. “There’ll be a slowdown, but not a recession,” opined Tom Weeks, executive general manager of development at Lendlease Corporation. ”The doomsday predictions have been proven wrong.”
Added Jeff Elowe, CEO of The Laramar Group, “We’ve not recently experienced a rising-rate environment. There is change coming. But we’re not at the end yet.”
Panelist Katrina McGuire, co-chair of real estate land use at Chicago’s Thompson Coburn, asserted next year’s most favorable real estate climate won’t arrive until after April’s big mayoral election to choose a successor to Rahm Emanuel.
Exploring the unknown
Asked what is not well known “on the street,” McGuire said it is the fact it’s easier to get 200 units approved than it is 20 units.
“Mega projects have momentum driving them forward,” she said, noting community organizations make it tough to get smaller projects approved in neighborhoods.
Panelist Chris Fifield, founder of Fifield Construction and Realty, argued Chicago’s strength is in its 77 neighborhoods. “And you can get the same rent in Lakeview you can in River North, with the right product,” he added.
Like many cities, Chicago needs more affordable housing. “It’s challenging,” said John Bucksbaum, CEO and founder of Bucksbaum Retail Properties. “The city has to be a partner. If you’re going to build affordable, the land basically has to be given you.”
In the end, general agreement was forged that the city must address taxes. Fifield noted one problem is there is little rationale in how some real estate taxes are determined. Added Bucksbaum: “The incoming assessor is looking at other cities, where there is greater (taxing) clarity . . . You have to continue estimating higher. It’s a big concern for everyone.”
Image courtesy of Taylor Johnson