Chicago’s Past Will Seed its Future

Welcome to the first edition of my blog that will be addressing real estate issues and shared perspectives on Chicago.  I do intend, in future editions, to include discussions, not only with my colleagues, but also with respected Chicago real estate icons, on their perspective of this current economic cycle, and its effect upon our commercial real estate marketplace.

 

I was reminded yesterday, during a visit to 35 East Wacker Drive, what a world class, and architecturally diverse city Chicago truly is, and how pleased I am that it became my choice for a new home and extension of my career in the winter of 2000.  As I looked north out of windows I saw the contrast between the Wrigley Building and the representation of 21st century modern architecture, as defined by the Trump Tower, a significant new addition to our unique skyline. I then looked east to another part of our architectural history defined by the Carbon & Carbide Building.  The multiple choices of where we can live and where we work will continue to make Chicago a choice that is second to none in US cities.

 

Yes, we are in a period of great adjustment that may well have started in the housing and financial sectors, but by the time we reach the bottom of this current cycle it will have touched upon every type of industry, and perceived real estate fundamentals will once again be significantly changed.  However, after spending my entire career in this industry, spanning three world-class cities, Chicago, San Francisco and London, transitioning through at least four recessionary periods, I have always felt we significantly learn from these downturns, and install new adjustments to our fundamentals.  I am never more convinced that there are many more smart people than fools, in our industry who quickly adapt to opportunities presented to them, and we will once again see the harvesting of those opportunities in the next few years, based upon the folly and greed of a few.

 

The incidence and change in up and down cycles appears to be happening more frequently, and those that plan for the worst will be positioned to regain momentum quickly as the cycle once again turns.  It is my belief that Chicago has many of the fundamentals to weather this latest severe recession.  It is truly a 24 hour city with a great transportation network and diversity of industry sectors.  Chicago is geographically a hub for commerce and a regional draw for higher education.  Back in the early 80's I read that the cities that will survive, and thrive, into the next millennium will be centered around an urban 24 hour appeal, and house leading centers of higher education that replenish the need for skills of new industries.

 

I also believe that we have a discipline, maybe for the first time in twenty years, on the supply of new commercial buildings in the foreseeable future, all of which support less of an imbalance in supply and demand. 

 

In future blogs I intend to address some interesting subject matters:

 

– How soon will we see a convergence of revised pricing and availability of debt to stimulate our current and dormant investment sales market place?

– What type of product would you most like to own today– a high rise on

Wacker Drive or a building with smaller floor plates in the central loop?

– Will the next few years see a tenant driven marketplace or one that it focused upon renewals, for shorter terms, in their existing buildings.

– Do you believe in the importance to the recovery of Chicago by hosting the 2016 Olympics?

– How does Chicago attract more corporate relocations?

– How much of our recovery will be fueled by small business, and the spin off of talent from fallen companies that have yet to be identified?

 

This will be more interesting if I can attract your input – you live and work here, and each one of you can have an impact of this city’s future real estate viability – I look forward to sharing your viewpoints on the future of our industry.