Multifamily Experts Voice Confidence at Annual Chicago Confab
- Nov 16, 2015
By Jeffrey Steele, Contributing Editor
Chicago—At the recently-held 2015 Real Estate Forum presented by Lincoln Park Builders of Chicago, an array of Chicago real estate experts convened for the annual panel discussion at Germania Place, voicing cautious optimism about prospects for ongoing strong multifamily sector performance in the Windy City.
The event kicked off with remarks by this year’s Impact Award Winner Steven Fifield, president and CEO of Chicago-based Fifield Companies, which has developed 21 residential and office towers in Chicago’s burgeoning West Loop.
Fifield shared several principles that have guided his career, including the importance of recruiting people smarter than you, delegating relentlessly and never giving up on projects you believe in. Paraphrasing Mario Puzo, he closed with the exhortation to “keep your friends close and your alderman closer.”
Moderated by Jim Jann, president of JAB Real Estate, the discussion featured panelists Ed Woodbury, president of McCaffery Interests; James Darrow, principal of Essex Realty Group Inc.; Robert John Buford, CEO of Planned Realty Group Inc.; Chris Feuer, CEO of Jameson Sotheby’s International Realty; and J. Michael Drew, principal of Structured Development LLC.
One of the first to weigh in with an observation was Feuer, who characterized the rebound in condominium sales as being in the first inning of what he hopes will be a long recovery. Jameson Sotheby’s International Realty is selling from the city’s Gold Coast to the newly emergent near Southwest Side Pilsen enclave. The latter, he said, is luring buyers from the increasingly costly West Loop and South Loop. In Pilsen, they are finding more homes for their money.
Sounding a note that would reverberate throughout the discussion, Woodbury said that around the Loop and River North, “there are lots of cranes in the air, and it looks like there’s almost an over-development. As the downtown area gets full to capacity, the neighborhoods will see the benefits of the economic boom.”
Buford added that the intersection of the Gold Coast, River North and the lake as a highly desirable residential neighborhood is “here to stay.” Driving demand for this area is “fantastic location” close to transit, the lake and the parks.
“We’re the poster child for the nationwide move back into the city,” added Buford, who reports his company is benefiting from marketing units 10 to 15 percent less expensive than those in the brand new buildings, with meticulous upkeep and attentive service being keys to successfully attracting and retaining renters.
Along with Pilsen, one of the big stories of the year is the surging popularity of the Northwest Side Logan Square community, which, like Pilsen, is very well located for quick rides downtown on CTA elevated and subway trains, Darrow remarked. In Logan Square, 960 units are being planned, 500 of them coming on line in the next couple years. They are expected to be easily absorbed.
“Chicago has evolved into a city that has a neighborhood for everyone,” he said. “And it’s the neighborhoods with transportation that are growing faster.”
As for first-time buyers, Feuer noted this breed is integral to condominium sales, and today they are swinging instead toward renting. The share of first-time buyers his company is seeing has fallen from historical norms of 40 to now 33 percent of all buyers. First-timers buyers are tending to fall within the 28 to 36-year-old age group, and springing for residences averaging $510,000.
Many comprising the first-time buyer group have credit scores only slightly above minimums needed to qualify for mortgages, and their average debt is $30,000. “It’s life events—marriage, kids—that get them to buy,” Feuer said.
Drew noted the biggest challenge the city faces is zoning and lack of an updated master plan, the last updating having occurred in the 1960s. Citing several examples of woefully outdated zoning, he noted that 30 contiguous acres of land between Bucktown and DePaul University are going undeveloped, because they are earmarked for the development of manufacturing facilities that are unneeded.
Woodbury added his conviction that antiquated building codes are negatively impacting the economic vitality and competitiveness of the city.
Buford was among those concluding on an upbeat chord. Chicago, he said, has “got the land, people, culture, nightlife. The glass is half full. It competes with other cities in the Midwest, and is winning.”