August 2021 Illinois Real Estate Journal

MARKETPLACE (pg 21):

TAX INCENTIVES BROKERAGE FIRMS CONSTRUCTION COMPANIES/GENERAL CONTRACTORS DEVELOPERS EDCS MULTIFAMILY FINANCE FIRMS

©2021 Real Estate Publishing Corporation August 2021 • VOL.21 NO.4

How flexibility, innovation and strategic foresight helped Chicago’s construction industry push through the pandemic

By AJ LaTrace, Managing Editor

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Photo by Scott Blake via Unsplash

hile industrial development is booming, the construction industry has faced its fair share of headaches and setbacks over the last 18 months with material shortages, volatile pricing, and competition for skilled labor. Lengthy lead times for crucial construction components such as steel, insulation, precast concrete and more, have been major challenges this year, and will continue to be so for the coming months.

But when in a pinch, general contractors have to do more than put on their thinking caps — the pandemic-related supply chain issues and runaway costs have forced the industry to innovate and become resourceful in an era when time is more precious than ever. Whether it’s sourcing different materials or diversifying the project pipeline, there are many different strategies firms are taking to complete a job and keep the books in the black.

CONSTRUCTION (continued on page 14)

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Chicagoland apartment rental market has bounced back from pandemic dip

By AJ LaTrace, Managing Editor

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fter a bleak winter of uncertainty and challenges, the Chicago area rental market has not only shown signs of life in recent months, but in many ways and in many geographic pockets, the region has witnessed a return to pre-pandemic levels of rent growth, occupancy, and general optimism. And investor interest in multifamily properties remains strong as apartment buildings in Chicago neighborhoods routinely trade at big prices.

But what about stories of suburban flight? Or concerns with living in a high-rise during the pandemic? There has been much discussion MULTIFAMILY (continued on page 24)

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ILLINOIS REAL ESTATE JOURNAL

CHICAGOLAND APARTMENT RENTAL MARKET HAS BOUNCED BACK FROM PANDEMIC DIP

ARE YOUR 2021 ILLINOIS REAL 18 HERE ESTATE JOURNAL AWARDS WINNERS

‘MORE TIME WAS PUT BACK ON THE CLOCK’: CHICAGO OFFICE MARKET HANGS ON DESPITE ONGOING PANDEMIC CHALLENGES

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The Chicago area rental market has witnessed a return to pre-pandemic levels of rent growth, occupancy, and general optimism.

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Over 400 real estate professionals from across the Chicagoland metro region convened at the Hyatt Regency O’Hare to attend the 2nd Annual Illinois Real Estate Journal Awards event.

It’s really anyone’s guess as to what exactly will happen in the coming months in regards to the office market.

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HOW FLEXIBILITY, INNOVATION AND STRATEGIC FORESIGHT HELPED CHICAGO’S CONSTRUCTION INDUSTRY PUSH THROUGH THE PANDEMIC

While industrial development is booming, the construction industry has faced its fair share of headaches and setbacks over the last 18 months.

PROGRAM AND NEED FOR MORE QUALITY AFFORDABLE HOUSING

The need for more affordable housing in Chicago has long been an issue, and it’s only become more so in the age of mass job losses and economic uncertainty brought by the pandemic.

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F ROMT H EE DI TOR “The world of commercial real estate

PUBLISHER Mark Menzies menzies@rejournals.com

and all of its many parts depend on

MANAGING EDITOR AJ LaTrace alatrace@rejournals.com

this ending. The government can’t

VICE PRESIDENT OF SALES & MW CONFERENCE SERIES MANAGER Ernie Abood eabood@rejournals.com

keep printing out trillions of dollars in cash and our economy can’t handle

VICE PRESIDENT OF SALES Frank E. Biondo frank.biondo@rejournals.com

additional years of 5% inflation rates.”

VICE PRESIDENT OF SALES John Mickey jmickey@rejournals.com VICE PRESIDENT OF SALES Marianne Grierson mgrierson@rejournals.com CLASSIFIED DIRECTOR Susan Mickey smickey@rejournals.com SENIOR EVENT & MARKETING COORDINATOR Alyssa Gawlinski agawlinski@rejournals.com

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abor Day is quickly approaching, which means kids are heading back to school and the days are getting shorter. A few months back, there was a lot of discussion about Labor Day also being the target date for many companies to return back to the office after having employees working from home full-time for 18 months. There was hope that we could be back to “normal” by this autumn.

However, thanks to the Delta variant and vaccination hesitation from a large portion of the population, we’re witnessing another rise in cases and hospitalizations, and thus, new mask mandates. Governor Pritzker has vowed that state leadership could take tougher measures in the coming weeks if cases don’t start trending down again.

But can our economy and individual workers handle another round of stay at home orders?

1010 Lake St. #210 Oak Park, IL 60301 (312) 933-8559 Website: www.rejournals.com EDITORIAL ADVISORY BOARD TODD ANDRLIK Skender Construction JIM CONNOR Duke Realty Corp.

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Some companies have begun taking a hard line on vaccinations: get the shot or be fired. Sadly, it’s to come to this point that in order for the economy to finally reemerge from the pandemic deep-freeze, private companies have to take almost draconian measures to ensure that their staff are inoculated.

Being a leader means making tough decisions. But now that we’ve seen some companies and local authorities institute this rule, many more are following. It shouldn’t have to be a difficult decision. The choice is between an ongoing and agonizing pandemic or a future where major cities can thrive once again.

Living in a civilized society requires that all citizens do their part for the greater good. American individualism has long been a cornerstone of our nation’s history and character, but at this point, we have to think about how we get through this together. And as residents of a big city, we have to think about our neighbors’ health and safety in addition to our own.

Simply put, the pandemic needs to end. It’s time to return to the office. It’s time to travel and stay at hotels. We need conventions to return. We need the supply chain to get sorted out.

The world of commercial real estate and all of its many parts depend on this ending. The government can’t keep printing out trillions of dollars in cash and our economy can’t handle additional years of 5% inflation rates.

For now, we go back to wearing masks. But this can’t be our new normal. We simply can’t accept it. And we can’t afford it.

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‘More time was put back on the clock’: Chicago office market hangs on despite ongoing pandemic challenges

By AJ LaTrace, Managing Editor

Photo by Alejandro De La Torre via Unsplash

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owards the beginning of summer, it seemed that the increasingly lower COVID cases coupled with higher vaccination numbers provided enough hope that some business leaders were patiently waiting for in order to announce a return to the office. But as Labor Day approaches and cases are back on the rise, it’s really anyone’s guess as to what exactly will happen in the coming months in regards to the office market.

At least, this is what some CRE professionals in the office world are suggesting.

The office market has been deeply affected by the pandemic, and at this point, it’s still uncertain exactly when many employees could see a collective return to the downtown office environment. It’s more or less a “Lucy with the football” type of scenario, says Randy Waites, Principal and Managing Director of the Real Estate Manage-

“We’re a real estate company, we want a robust real estate market and we’ve pushed to have people come in to use our space as often as they can.” ment Services Group with Avison Young in Chicago.

“If you were to look at the end of May or early June, I think we all were thinking that

Labor Day was quite a realistic possibility, and might have even been a little too far off,” Waites says of the situation. “[But now], I think that Labor Day is a stretch, frankly, from what I’m hearing across the

country until people have a sense that the Delta variant is a little more under control.”

And while the Delta variant has led to a renewed indoor mask mandate in the city of Chicago, CRE professionals still believe that ultimately, employers will bring their teams back to the office eventually. It’s certainly a tough situation for all involved in office leasing and property management, but it’s one that will require further patience and resolve to get through.

“We’re a real estate company, we want a robust real estate market and we’ve pushed to have people come in to use our space as often as they can,” Waites says of his team’s effort to utilize their office space as much as possible. “It’s not doomsday or the death of the office and I think people worry OFFICE(continued on page 8)

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OFFICE(continued from page 6)

about sending that message. It’s just more time was put back on the clock.”

One indicator that has signaled continued troubles in the Chicago office market is the high level of available sublease space.

The Chicago office market hit a record of available sublease space towards the end of 2020 when the metro region had just over 9 million square feet of office space for sublet, with nearly 6 million square feet of it in the city’s central business district.

And recent reports are much the same. A June report from CBRE suggests that at a national level, Chicago is lagging many other major metros in its office recovery.

The report indicates that the sublease market is still ample, with 88% more sublease space than there was at the pre-pandemic baseline. An Avison Young report for Q2 2021 puts the total sublet space in Chicago’s CBD at 5.4 million square feet, more or less unchanged from the previous quarter.

However, a report from London-based Savills shows the downtown sublet market still holding steady with the record 6 million square feet of available space. And in

the suburbs, the overall level of all available office space increased in the second quarter to just over 31%, or just around four percent higher than in the same period during 2020.

Leasing activity is also down dramatically in both downtown Chicago and the suburbs as compared to previous years, and it’s difficult to say when the metro could return to its pre-pandemic baseline.

However, the flood of available office space both in the city and the suburbs means that office tenants and brokers are still pushing for concessions and generous rent prices. But ultimately, the continued uncertainty surrounding the eventual containment and control of COVID and its variants means that both office property managers and tenant companies have to remain flexible for the time being.

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“I think in the conversation, there’s a piece of it that has remained constant is that flexibility is key,” says Eric Feinberg, Vice Chairman and Co-Head for the Chicago region with Savills. “If you’re doing a transaction during the pandemic, you don’t know how much space you’re going to need based on the success or failure of implementing a hybrid workplace model.”

“Flexibility is key.

If you’re doing a transaction during the pandemic, you don’t know how much space you’re going to need based on the success or failure of implementing a hybrid workplace model.”

Expansion or contraction options, termination options, and workplace furniture systems are just a few contractual items where flexibility will be crucial, particularly for company heads who are still uncertain about the total amount of needed office space and how it will be utilized, Feinberg adds. And in some ways, flexibility with

these terms and options could be viewed as a concession from the office landlord.

“We’re seeing more willingness to provide operational flexibility to the extent that we have not seen before. Any options like this impact the value of a building and impact

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have indicated both publicly and to their teams, Feinberg says that are a number of crucial variables that are impacted from being in the office, such as company culture, productivity, mentoring, and the mental separation between personal and professional life.

“In general, there’s more consensus than not that the

“In general, there’s more consensus than not that the office is necessary to effectively run a large organization,” he says. “Productivity may have been surprisingly strong over the past 15 months, but I think there’s a doubt that it will be as strong if this lasts 24 or 36 or 48 months with people staying at home.”

office is necessary to effectively run a large organization.” operations,” Feinberg says of the flexibility in terms such as contraction, expansion and termination. “It’s not easy if you’ve got a bunch of options in the building to manage, so landlords are not always happy to give those, but we’ve seen a lot more willingness.”

Perhaps even more complicated are the rules that each company will implement for its workforce in the office space. Some businesses are increasingly taking a hard line with their staff, mandating that team members get vaccinated or lose their job.

But Feinberg suggests that this will remain a tricky situation for office property

managers to navigate as each individual business will institute their own guidelines and expectations for employees returning to the office.

But ultimately, Feinberg believes, there will be a return to the office. As other real estate professionals and business leaders

But for the moment, we will have to continue to wait and see what happens in the coming quarters. All of the moving parts to the pandemic mean that trends can change week-to-week as businesses and individuals continue to press ahead in work and life, so adaptability and flexibility are more important than ever, Feinberg suggests.

“People can surmise and architects can tell you all day long that this is what the future looks like, but there’s really no black and white answer here. No one really knows what the future actually really has in store, so I think flexibility is key.”

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Evergreen’s David Block on Chicago’s INVEST South/West program and need for more quality affordable housing

By AJ LaTrace, Managing Editor

A rendering of the proposed Evergreen Imagine development for Auburn Gresham

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he need for more affordable housing in Chicago has long been an issue, and it’s only become more so in the age of mass job losses and economic uncertainty brought by the pandemic. Earlier this year, Mayor Lightfoot and Chicago Department of Planning and Development commissioner Maurice Cox unveiled a series of new projects in underserved and under-invested communities across Chicago in the INVEST South/West program.

One of the proposals selected, Evergreen Imagine, will feature two new affordable mixed-use residential and retail buildings, with one constructed at 79th and Green streets and the second at 79th and Halsted streets. The development was proposed by a partnership between Evergreen Real Estate Group and Imagine Group. David Block, Evergreen’s Director of Development, explains why affordable housing is not only a worthwhile venture in the world

“We have taken as a kind of a point of pride for ourselves that we work with a pretty wide range of diverse partners and architects and consultants.”

of commercial real estate, but how it’s truly a market that is in high demand.

When the list of INVEST South/West developments were announced in March, what was your involvement in the 838 W. 79th Street proposal for Auburn Gresham?

INVEST South/West was an interesting program to us. We read through all of the initial RFP documents that came out and it kind of hit our sweet spot in a number of different ways. We are primarily an affordable housing developer and many of these proposals call for affordable housing. We do a lot of neighborhood economic devel-

opment work, particularly mixed use type development. And the program was also looking for diverse teams. We have taken as a kind of a point of pride for ourselves that we work with a pretty wide range of HOUSING (continued on page 12)

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diverse partners and architects and consultants. So we ended up teaming up with the Imagine Group and started working through design and a program and assembled a team including Carol Ross Barney in partnership with Nia Architects as the architects. We put a proposal together and, you know, I guess they liked what they saw enough to select us.

In the world of commercial real estate, there is a lot of money in market-rate deals, so why would a developer want to work on affordable housing projects like this?

We at Evergreen have been doing affordable housing for 20 years and I think that it is an interesting little corner of the real estate industry. It’s a corner of the real estate industry that, frankly, I think a lot of commercial developers are a little afraid of because there’s a huge amount of red tape.

You’re really getting into public-private partnerships between the project developer and government agencies, whether it’s the City of Chicago or Illinois Housing Development Authority and a lot of developers are just not comfortable working in

“I’m guilty of being as cynical as the next guy about certain things, but I also believe that there is real value in bringing change to a community that needs it and wants it, and I think that’s what INVEST South/West has done. It has identified areas of the city where the community is really hungry for something new and positive to happen.” that way. Their attitude is, ‘I’m going to do what I need to do to get going and get my building permit then work with my bank and I’ll be on my way.’ And when you work on these projects, it’s a bit of a different attitude, which is that I need to listen and take seriously what I’m hearing from the city, from the neighborhood, and from these

public agencies, who are in most cases providing most of the funding to make these projects work.

When we talk about being deferential or diplomatic, a lot of times at public meetings for proposed developments there’s this language used or idea conveyed that

a developer could have built much higher or bigger but aren’t for the sake of honoring neighboring concerns. Is it simply political where the alderman wants a success story and the developer is along for the ride?

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AU G U S T 2 0 2 1 I L L I N O I S R E A L E S TAT E J O U R NA L I’m guilty of being as cynical as the next guy about certain things, but I also believe that there is real value in bringing change to a community that needs it and wants it, and I think that’s what INVEST South/ West has done. It has identified areas of the city where the community is really hungry for something new and positive to happen and some real investment to happen.

And because Chicago is so big and spread out there are so many opportunities for developers to go in places that have had more investment over the years, but there are also plenty of disinvested corners of Chicago where I think there’s a real kind of fairness argument. It’s an equity argument that says, you know, it’s now the turn of this neighborhood to get its share of investment, and that means construction jobs and that potentially means permanent jobs. And that means new affordable housing that leads to an increase to the tax base.

I think that it’s really the job of political leaders to look beyond cynicism and to say I am going to take a stand, and I’m going to do something, and you can agree with me or not, but this is what I am doing as a leader.

And then there are some other equity themes, you could say about that, too, right? Such as affordable housing doesn’t mean that people can’t have good design, or amenities or things of that sort.

is always looking to push the market rents and say, ‘I think if I offer a dog spa, I can get 10% more than market rent here,’ as where affordable housing developers don’t think that way.

Going forward, how important will affordable housing continue to be in Chicago and elsewhere?

13 I’ve been doing affordable housing for more than 20 years, and it’s only in the last five or six years that there really has been this kind of a conversation in the air about affordable housing. I think it’s maybe a function of the huge income disparities that we’re seeing in this country and the kind of winner take all cities like New York, San Francisco, DC and Boston where people are waking up to realize, ‘Hey, you know, my quality of life is being affected.’ If people

can’t afford to live in my city, who’s going to drive my kids’ school bus and who’s gonna pour my coffee and who’s going to serve as the reading teachers in my kids schools? I think people are beginning to realize that a healthy society requires housing as a good, and it can’t be the kind of thing where only the rich people get to live in the center city.

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Well, that’s absolutely right. And that’s a big part of why I think Maurice Cox, who is also an architect, is so heavily focused on design as part of his approach to the INVEST South/West program. We wanted to send the message in responding to this RFP, to Lori Lightfoot to Maurice Cox, that at Evergreen, we are all willing to step up and be part of the solution. Yes, it’s our business, but it’s also a big part of our civic role as citizens of Chicago that we can help make those positive changes happen.

When we look at affordable housing, how do we view the role of investors in these developments?

There are different motivations for the investors and for the developers in these projects. Conventional equity investors are typically looking to maximize their return, so they will look for ways to do that while minimizing their risk. And for investors in low income housing projects, it’s not that different, in the sense that the investors are looking to create a decent return with minimal risk, but I think the investors in affordable housing projects are even more cautious because they tend to be very large institutions instead of wealthy family offices or pension funds. They are often regulated entities, so there’s only so much they can do with their capital. They tend to be very cautious in how they’re underwriting, so typically, affordable housing projects are very cautiously designed. They’re designed to have expenses increase faster than revenue, they’re designed to have all kinds of reserves as backstops if things go wrong, and they’re designed to offer a discount to market rents, whereas a typical developer

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It’s likely to take at least another couple of quarters, or longer, until the supply chain gets fully sorted out and caught back up to pre-pandemic lead times, but until then, Chicago-area construction firms are proving themselves able to push ahead despite the ongoing pandemic conditions and the disruptions caused by it.

“We’re currently experiencing a shortage of just about anything that goes into our roof, whether it’s the insulation, or the membrane, or even something as

Flexibility and adaptability goes beyond the blueprint

simple as the adhesives that are needed. The bottom

There’s simply no way around the fact that steel and precast concrete lead times are challenging the construction industry as a whole. And the material shortages go even deeper as other pieces to the proverbial puzzle become more scarce. But the longer it takes to obtain materials, the harder it is to predict the total costs and timeline for construction.

line is we’ve got a strong demand and we’re now

“They’re both culprits right now,” Mark Augustyn, co-founder and COO of Principle Construction, says about the steel and precast shortage. “Steel is about 40 weeks out, which is an extraordinary time period as it used to be 14 to 16 weeks, while precast can be 40 to 52 weeks out.”

bumping up against the availability of the product.”

The Rosemont-based builder frequently takes on industrial developments and has had to face the long delays for materials like every other general contractor in the area. But construction crews are bracing for additional shortages and fluctuating prices on these much-needed materials.

Even roofing materials have now been

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added to the list of high-demand and short-supply items, Augustyn explains.

“We’re currently experiencing a shortage of just about anything that goes into our roof, whether it’s the insulation, or the membrane, or even something as simple as the adhesives that are needed,” Augustyn says of the situation. “The bottom line is we’ve got a strong demand and we’re now bumping up against the availability of the product.”

One solution may be changing the order in which the membrane is installed, or perhaps a different solution could be going with another, more readily-available material. But in other cases, builders may have to take an entirely different approach towards the construction, particularly for an industrial owner who is prioritizing speed above all.

“In our industry, we’ve been [constructing buildings] the same way over and over and making small innovations as we go.

Now, because of some of these shortages, we have to go back to the way we built the assemblies and say, hey, maybe we can get a dual purpose out of this particular feature of our roof while we wait for the installation to show up,” he explains.

Some materials can serve double-duty, other materials could be sourced elsewhere or salvaged, and then in some extreme cases, builders can look back to previous methods of construction in order to get a job done as quickly and efficiently as possible.

“What we have to do is say, okay, well how can we build this building and take some of these long leads and or cost items out of the equation? How else can we solve the problem,” Augustyn says. “We stopped building with masonry bearing walls only 20 years ago as the predominant form of our industrial walls, so what if we go with a different wall system and eliminate precast?”

Sorting out the challenges to a building ultimately comes down to what each individual client needs, how much they’re willing to spend and their time to completion target. But at the end of it all, “customers are always looking for delivery,” Augustyn says in a no-nonsense manner.

“I think we’re going to continue to plan to build our buildings in the industrial market as we’ve always done, but so much is dependent on the specific needs of the customer. So we will continue to have to innovate, and come up with solutions on how we can accommodate the needs of our customers.”

Foresight as a strategy to mitigate catastrophe It’s virtually impossible to predict what steel prices and lead times will be six months from now. And it’s also difficult to predict exactly what kind of effects a second wave of business closures and stay-at-home orders will have on the economy and workforce. But one thing construction companies can do is plan ahead by obtaining work that will move forward regardless.

For instance, before the pandemic even hit, executives at Pepper Construction were wondering when the next possible economic dip would come and were preparing for it by lining up government and education jobs, says Jake Pepper, Executive Vice President with Pepper Construction. By doing so, the company’s pipeline remained steady through 2020 even as other companies took a pause.

“We just knew that the cycle that began in 2011-2012 was getting pretty long in the tooth and believed that there might be a slowdown but had no idea what was going to cause it,” Pepper says. “So booking that bond-financed K through 12 work was something that we very much targeted and we won three giant school districts.”

AU G U S T 2 0 2 1 I L L I N O I S R E A L E S TAT E J O U R NA L The districts that the company engaged, and won, in the lead up to the pandemic included Maine Township, Oak Park and River Forest, and Hinsdale, Pepper says.

Later on, Pepper also took on Rich Township in the south suburbs. These contracts added up to $350 million to $400 million of revenue over a period of four years, giving Pepper Construction some much-needed breathing room to focus on getting through the pandemic-fueled recession.

“You look at 2008 or 2009 and financing dried up, so projects disappeared because they couldn’t get financing,” Pepper explains. “During COVID, not a lot of projects disappeared but a lot of them went pencils down, and it wasn’t about money, it was the uncertainty of what was going to happen.”

Lining up a diversified project pipeline and keeping a steady flow of income in the lead up to the pandemic meant that Pepper Construction was also able to keep its teams together through the toughest months. And by not making any major changes to staffing, it better served the company to take new projects head on as COVID cases eased up and state started reopening.

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“I think we gained a lot of credibility with our employees by committing to avoid layoffs. We’re a family-owned company, so we take a long term perspective.”

“I think we gained a lot of credibility with our employees by committing to avoid layoffs. We’re a family-owned company, so we take a long term perspective and it would be really hard to lay everybody off just to have to go find that talent again,” Pepper says of the company’s staffing strategy.

During the pandemic, Stan Pepper, Pepper Construction’s CEO and Jake Pepper’s father, would host weekly town hall meetings over Zoom to keep employees engaged and to answer questions from staff and dispel any concerns. Ultimately, the company came out of 2020 with solid

footing and are now bringing on new teams to take on a growing pipeline of jobs in Indiana and Ohio.

“We missed our revenue targets in 2020 but we did better than maybe what we had expected and I think we’re in a good position. Now, we still have to hire [staff] and have been hiring in Ohio and Indiana because they never really slowed down through COVID — they actually got busier,” Jake Pepper says of the company’s current situation.

Pepper adds that there were of course other key themes that worked in the con-

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struction industry’s favor, particularly the fact that construction was deemed an essential service and jobs were able to carry on even during the bleakest periods of the pandemic, “because if the revenue spigot turned off, then we would have serious issues.”

In the end, Pepper says that he and his team didn’t miss a beat. But ultimately, it was a combination of adapting to the pandemic conditions through virtual work for office staff and mitigation efforts at job sites as well as an emphasis on strategic foresight that allowed the company to continue operating full steam ahead throughout 2020.

“We’ve done some business resiliency planning before COVID, obviously not knowing there was going to be a pandemic, and that that really benefited us going through that,” Pepper says of the situation.

“Every one of our competitors that we know have laid people off or did multiple rounds of layoffs and the fact that we were able to commit and follow through on not laying anybody off was great and we really gained a lot of trust from our employees through that process.”

Office Project 555 W Monroe WINNER! Fulton East 215 N Peoria One South Wacker SOS Children’s Village Redevelopment - Office WINNER! 24 E Washington Street 306 West Erie | Verso BlueCross BlueShield of Illinois Morgan Park Solution Center One South Wacker PROPERTY / PROJECT AWARDS Affordable Housing KLEO Art Residences WINNER! Pullman Artspace Lofts

Redevelopment - Medical WINNER! MetroSouth COVID-19 Alternate Care Facility Quincy Town Center | Quincy Medical Group Adaptive Reuse

Industrial / Manufacturing / Science Redevelopment - Multifamily / Mixed WINNER! Oracle Innovation Industries Use Lab Bell Works Chicagoland SRS Center for Taste Innovation WINNER! Pullman Artspace Lofts Sawmill Station - Morton Grove Industrial - Multi-Tenant The Duncan FLATS® WINNER! Bridge Point Itasca Industrial - Distribution 3501 Brandon Road, Joliet, IL Chariot Logistics Center Northwest Commerce Center WINNER! Pullman Crossings Phase II Route 60 Logistics Center Yamazen Headquarters EXTRA Lease, Joliet, IL Interior Design – Multi-Tenant Office 110 N Wacker Amenity Spaces 1340 S Damen WINNER! Old Post Office Marketing Suite 2E One South Wacker Interior Design – Office / Headquarters CDW Equity Residential Komatsu WINNER! Mondelez International Headquarters Remedy Chicago VSA Partners Interior Design – Co-working WINNER! CommonGrounds Medical Properties WINNER! Esperanaza Health Center Multifamily Albion Evanston Aspire Residences Logan Apartments WINNER! Porte Wolf Point East

Redevelopment - Education WINNER! 33 E Washington Redevelopment - School of the Art Institute of Chicago Retail / Restaurant – COVID/Retro Fit WINNER! Harlem Irving Plaza Make Way for Dining

CORPORATE / CITY AWARDS City / Municipality of the Year Elk Grove Village Village of Downers Grove WINNER! Village of Hoffman Estates Village of Romeoville 2020 Best COVID Plan Development & Construction ACCEND Construction WINNER! Clayco Enterprise Lendlease Redmond Riverside Investment & Development 2020 Best COVID Plan - Property Services WINNER! Bee Line Support Baird & Warner Eastlake Studio Luxury Living Chicago Realty 2020 Technology Pivot BEAR Construction Company WINNER! Parkside Realty, Inc. SITE Technologies SVN | Chicago Commercial Architecture Firm of the Year WINNER! JGMA

Developer of the Year Bridge Industrial CenterPoint Properties Conor Commercial Real Estate WINNER! Riverside Investment & Development Vequity Engineering Firm of the Year CAGE Engineering GEI Consultants, Inc. WINNER! Kimley-Horn General Contractor of the Year Bear Construction McShane Meridian Design Build Mortenson Peak Construction WINNER! Pepper Construction Company PREMIER Skender Ryan Companies

INDIVIDUAL AWARDS 2020 Broker Pivot of the Year Joe Learner, Savills Loren Connell, Baird & Warner WINNER! Paul Cawthon & Angelo Labriola, SVN 2020 Superstar Andrew MacGregor, Accend Beverly Hayes, SVN Chrissy Jensen, Zeller Kimberlee Carr, TAWANI WINNER! William “Bill” Himmelstein, Tenant Advisory Group, LLC

Executive of the Year Aaron Galvin, Luxury Living Chicago Realty John Redmond, Redmond Laura Ellis, Baird & Warner Michelle Mills Clement, Chicago Association of Realtors Nate Thompson, Baird & Warner WINNER! Sam Zeller, Zeller Property Manager of the Year Beth Argaman, Bozzuto WINNER! Bradley Borowiec, Zeller Traci Haskell, WPD Management Real Estate Lawyer of the Year David Arnburg, Gould + Ratner WINNER! Eric Greenfield, Polsinelli Howard Jeruchimowitz, Greenberg Traurig Jessica Lingertat, Gould + Ratner Joseph Q. McCoy Riley, Safer Holmes & Cancila Kate Duncan, Akerman LLP Kathryn Kovitz Arnold, Taft Ronald A. Damashek, Dickenson Wright Woman of the Year Colleen Werner, Lulafit Jamie Henry, Bee Line Support, Inc. Jamie Redmond, Redmond Janelle Moody, RLE Partners Lori Olson, Zeller WINNER! Molly McShane, McShane Companies

TRANSACTION AWARDS Most Significant Investment Sale Transaction WINNER! Takeda Pharmaceuticals Architect of the Year WINNER! Juan Gabriel Moreno, JGMA Sale Altorfer, Inc. Relocation Vesta Lofts Broker of the Year WINNER! Aaron Sklar, Kiser Group Most Significant Lease Transaction Brian Kling/Colliers Chicago, Colliers Jeff Baasch, SVN WINNER! Village of Romeoville – Noah Birk, Kiser Group Wayfair Yolanda Jeffries, Baird & Warner Goldberg Kohn Transaction Emerging Leader of the Year Aaron Sklar, Kiser Group Chris Payne, Riverside Investment & Development Kurt Bender, Bender Companies Lindsey Telford, Zeller WINNER! Liz Butler, Elrod Friedman Maggie Easley, RLE Partners Noah Birk, Kiser Group

Reyes Holdings Lease

2021 ILLINOIS REAL ESTATE JOURNAL LIFETIME ACHIEVEMENT RECIPIENT Joel Carlins Global in scope, Magellan Development Group has earned a reputation as a successful developer, judged not only by the financial performance of its projects, but in the esteem of its international investors, joint venture partners, lenders, renters, buyers, consultants, contractors, as well as government officials.

Since its inception in 1996, Magellan has developed 27 mostly mixed-use communities encompassing over 9,500 residential units, that in aggregate have generated over $6 billion in value. Magellan is perhaps best known for its multi- award winning Lakeshore East mixed-use development in downtown Chicago, Illinois, USA. Joel Carlins, Emeritis and founder of Magellan Development Group LLC, has been instrumental in the company’s growth and continuing success. Carlins experience includes supervising the overall activities of the development group, from acquisition of raw land through financing, property development, design and construction.

To date, more than half of the Lakeshore East development has been completed, including eight (8) high-rise towers including the recently constructed prestigious St. Regis Chicago, a park home community, the Village Market retail center, and extensive infrastructure and landscape features.

I L L I N O I S R E A L E S TAT E J O U R NA L AU G U S T 2 0 2 1

18

Here are your 2021 Illinois Real Estate Journal Awards winners

By AJ LaTrace, Managing Editor

D

uring the evening of Thursday, July 22, over 400 real estate professionals from across the Chicagoland metro region convened at the Hyatt Regency O’Hare to attend the 2nd annual Illinois Real Estate Journal Awards event. And there was certainly cause for celebration after nearly a year and a half since the beginning of the COVID-19 pandemic which took its grip over the global economy, allowing for many of the event’s participants to reconnect in person for the first time in many months.

For this year’s awards, there were 34 categories, with several sub-categories ranging from everything from notable deals, innovative design and even COVID-related accolades. While the commercial real estate market did witness setbacks during the pandemic, the economy is quickly recovering and optimism is high for the remainder of the year.

We would like to thank all of the businesses and professionals who submitted nominations to this year’s award and also extend a sincere congratulations to all of the winners. Until next year’s awards take place, please be sure to keep an eye on the various panel events and mixers scheduled throughout the rest of the year on our website to stay in touch with other industry professionals and keep up with the latest trends and news.

Below is the complete list of the 2021 Illinois Real Estate Journal Award Winners:

Lendlease Redmond Riverside Investment & Development Best COVID Plan, Property Services: Bee Line Support (winner) Baird & Warner Eastlake Studio Luxury Living Chicago Best Technology Pivot: BEAR Construction Company Parkside Realty (winner) SITE Technologies SVN Chicago Commercial Industrial (Multi-tenant):

Komatsu

Bridge Point Itasca (winner)

Mondelez International HQ (winner) Remedy Chicago

Developer of the Year: Bridge Industrial CenterPoint Properties

Industrial (Distribution):

VSA Partners

3501 Brandon Road, Joliet

Interior Design (Co-working Space):

Riverside Investment & Development (winner)

Chariot Logistics Center

CommonGrounds (winner)

Vequity

Pullman Crossings Phase II (winner)

Medical Properties:

Architecture Firm of the Year:

Route 60 Logistics Center

Esperanza Health Center (winner)

JGMA (winner)

Northwest Commerce Center

EXTRA Lease in Joliet

Property and Project Awards

Yamazen headquarters

Medical Redevelopment:

Engineering Firm of the Year: CAGE Engineering

Affordable Housing:

Office Project:

MetroSouth COVID-19 Alternate Care Facility (winner)

KLEO Art Residences

555 W. Monroe

Kimley-Horn (winner)

Pullman Artspace Lofts (winner)

Fulton East, 215 N. Peoria (winner)

Quincy Town Center, Quincy Medical Group adaptive reuse

One South Wacker Multifamily:

SOS Children’s Village

Albion Evanston

Retail and Restaurant COVID Retrofit: Harlem Irving Plaza (winner) Make Way for Dining

GEI Consultants

General Contractor of the Year: BEAR Construction McShane

Aspire Residences

Office Redevelopment:

Logan Apartments

24 E. Washington (winner)

Porte (winner)

306 W. Erie

Wolf Point East

BlueCross BlueShield of Illinois Morgan Park Solutions Center

Multifamily and Mixed-use Redevelopment:

One South Wacker

Bell Works Chicagoland

Interior Design (Multi-tenant Office):

Pullman Artspace Lofts (winner)

110 N. Wacker amenity spaces

Sawmill Station

1340 S. Damen

The Duncan FLATS

Old Post Office Marketing Suite 2E (winner)

Industrial, Manufacturing and Science:

One South Wacker

Village of Romeoville

Joe Learner, Savills

Interior Design (Office Headquarters):

Best COVID Plan, Development and Construction:

Paul Cawthon & Angelo Labriola, SVN (winner)

Oracle Innovation Industries Lab (winner) SRS Center for Taste Innovation

CDW Equity Residential

Education Redevelopment: 33 E. Washington, School of the Art Institute redevelopment (winner) Corporate and City Awards City/Municipality of the Year: Elk Grove Village Village of Downers Grove Village of Hoffman Estates (winner)

ACCEND Construction Clayco (winner)

Meridian Design Build Mortenson Peak Construction Pepper Construction Company (winner) PREMIER Ryan Companies Skender Individual Awards 2020 Broker Pivot of the Year: Loren Connell, Baird & Warner

AWARDS (continued on page 20)

THANK YOU TO OUR SPONSORS!

®

I L L I N O I S R E A L E S TAT E J O U R NA L AU G U S T 2 0 2 1

20 AWARDS (continued from page 18)

Woman of the Year:

Most Significant Lease Transaction:

Colleen Werner, Lulafit

2020 Superstar:

Jamie Henry, Bee Line Support

Andrew MacGregor, Accend

Jamie Redmond, Redmond

Beverly Hayes, SVN

Janelle Moody, RLE Partners

Chrissy Jensen, Zeller

Lori Olson, Zeller

Kimberlee Carr, TAWANI

Molly McShane, McShane Companies (winner)

William “Bill” Himmelstein, Tenant Advisory Group (winner)

Transaction Awards Most Significant Investment Sale Transaction: Altorfer, Inc. Relocation

Village of Romeoville, Wayfair facility (winner) Goldberg Kohn Transaction Reyes Holdings Lease

Takeda Pharmaceuticals Sale (winner) Vesta Lofts

Lifetime Achievement Award Joel Carlins, Magellan Development Group

Executive of the Year: Aaron Galvin, Luxury Living Chicago John Redmond, Redmond Laura Ellis, Baird & Warner Michelle Mills Clement, Chicago Association of Realtors Nate Thompson, Baird & Warner

Think of us for your next Speculative project...

Sam Zeller, Zeller (winner) Architect of the Year: Juan Gabriel Moreno, JGMA (winner) Property Manager of the Year: Beth Argaman, Bozzuto Bradley Borowiec, Zeller (winner) Traci Haskell, WPD Management Broker of the Year: Aaron Sklar, Kiser Group (winner) Brian Kling, Colliers Chicago Jeff Baasch, SVN Noah Birk, Kiser Group Yolanda Jefferies, Baird & Warner Real Estate Lawyer of the Year: David Arnburg, Gould + Ratner Eric Greenfield, Polsinelli (winner) Howard Jeruchimowitz, Greenburg Traurig Jessica Lingertat, Gould + Ratner Joseph Q. McCoy Riley, Safer Holmes & Cancila

UNDER CONSTRUCTION...

Kate Duncan, Akerman Kathryn Kovitz Arnold, Taft Ronald A. Damashek, Dickerson Wright Emerging Leader of the Year: Aaron Sklar, Kiser Group Chris Payne, Riverside Investment & Development Kurt Bender, Bender Companies Lindsey Tellford, Zeller Liz Butler, Elrod Friedman (winner) Maggie Easley, RLE Partners Noah Birk, Kiser Group

Clarius Park Joliet Building 2 Joliet, IL - 907,517 SF ARCHITECT: Heitman Architects CIVIL ENGINEER: Spaceco, Inc.

DESIGN BUILD · GENERAL CONTRACTING CONSTRUCTION MANAGEMENT Please contact us for any upcoming project needs!

847.374.9200 · www.meridiandb.com

AUGUST MARKETPLACE TAX I NC E N T I V E S

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708-710-1448 • FIREPROTECTIONCONTRACTORS.COM B ROK E R AG E F I R M S FRIEDMAN REAL ESTATE

34975 W. Twelve Mile Road Farmington Hills, MI 48331 P: 888.848.1671 Website: friedmanrealestate.com Key Contacts: David B. Friedman, President/CEO; Gary Goodman, Sr. Managing Director-Brokerage Services Services Provided: Friedman offers a full range of real estate services including commercial and multifamily property and asset management, tenant and landlord representation, investment and loan sale advisory, space planning, design and construction and a unique platform of lenderfocused bankruptcy, receivership and distressed asset services. All services are provided in-house, though a single point of contact, which guarantees that clients receive the most timely and efficient service available in the marketplace.

Company Profile: Founded in 1987, Friedman Real Estate is one of the largest privately held commercial real estate organizations in the nation; currently managing over 15M SF of commercial space and more than 15,000 apartment homes located throughout the country.

Friedman’s commercial brokerage team has over 800 current listings with $20 billion in closed transactions.

Notable Transactions/Clients:Notable Transactions/Clients: Hovis Light Industry Park – Dekalb; Poplar Creek Office Plaza – Hoffman Estates; 801 North Route 83 – Bensenville; Crystal lake Office – Crystal Lake; Broadway Village – Pekin; National Railway Equipment – Dixmoor; Daycare Building – Bolingbrook; Freeport Shopko – Freeport

PW COMMERCIAL REAL ESTATE

8725 W. Higgins Road, Ste. 800 Chicago, IL 60631 P: 773.714.9300 | F: 773.714.8253 Website: painewetzel.com Key Contacts: Jerry Sullivan, Principal, sullivan@painewetzel.com; Ed Wabick, Principal, ewabick@painewetzel.com Services Provided: Real Estate Strategy with dependable results in Brokerage, Consulting, Tenant Advisory, Corporate Services, Property Management, Development, Strategic Planning, Research and Construction Management.

Company Profile: PW has been a leader in industrial, office and investment real estate since 1975.

We pride ourselves on offering unparalleled brokerage services and superior market expertise to attain your real estate and business goals.

C ON ST RU C T ION C OM PA N I E S / G E N E R A L C ON T R AC TOR S ALSTON CONSTRUCTION COMPANY

1900 Butterfield Road, Suite 1020 Downers Grove, IL 60515 P: 630.437.5810 Website: alstonco.com Key Contacs: Greg Kolinski, Director of Business Development, gkolinski@alstonco.com Services Provided: Alston offers a diverse background of design-build experience, general contracting and construction management of industrial, commercial, healthcare, retail, and municipal projects.

Company Profile: Alston Construction is celebrating 35 years of excellence in 2021, and we believe our success comes from being a true partner. With 21 offices nationwide, we have market knowledge throughout the country, which provides clients with the best building methods and materials available. Our goal is to provide quality, cost efficient projects that leave a positive experience for our clients and their communities.

Notable/Recent Projects: 1.5M SF Distribution Center for General Mills. John Pennycuff Memorial Apartments 7-story, 88-units. Call Center with open offices with full-service café, gymnasium, and fitness center for Medline Industries. Freestanding Medical Office Building with 33 exam rooms, rehabilitation gym, and support service/diagnostic space for CHI Health and NexCore Group.

21

BUILTECH SERVICES, LLC

425 N Martingale Road, Suite 1050 Schaumburg, IL 60173 P: 847.895.3700 Website: builtechllc.com Key Contacs: Phil Wesbury, Director of Business Development, pwesbury@builtechllc.com Company Profile: Builtech is among America’s fastest growing, nation-wide General Contractor & Construction Management firms. We work with leading developers, operators, REITs, national retailers, asset managers, and private owners constructing cutting-edge environments for various vertical markets across the nation. Our team is equally comfortable completing ground-up construction, acquisition-rehab projects, tenant improvement work, and interior remodels.

Services Provided: 1) Preconstruction - Site Analysis, Entitlement Assistance, Budgeting, Constructability & Design Intent, Cost Control, Scheduling, Procurement Management, Labor Strategy, Bid Packaging, Safety & Partnering; 2) Budget Considerations - Advantages of MEP Design/Build, Subcontractor Risk Mitigation & Labor Management (Union & Merit Shop); 3) Construction – Methodology, Construction Phasing & Quality Assurance/Quality Control.

Notable/Recent Projects: Springs at Canterfield, 328,600 SF, 260-unit, West Dundee, IL; Atria at River Trail, 110,000 SF, 138 assisted living and memory care units, Bolingbrook, IL; Gateway Plaza Shopping Center, 42,000 SF, Sumter, SC; Carolina Pavilion - Floor & Decor, 74,000 SF, Charlotte, NC.

CDI CONSTRUCTION GROUP, INC.

1751 Lake Cook Road – Suite 240 Deerfield, IL 60015 P: 847.948.0635 Website: cdiconstruction.com Key Contacs: Laurie Price, President, lprice@cdiconstruction.com Services Provided: We offer pre-construction, project management, and general contracting services for the commercial, industrial, retail, and healthcare sectors. We will join your team from the early stages of design conception and will remain an integral player through move-in. CDI is a certified WBE by the State of Illinois.

Company Profile: The company was founded in 1992 by Laurie Price, who remains the President today. We listen and interpret our clients’ needs to manage a fluid construction process; we take great pride in our decades long relationships which have been built on a history of trust and satisfaction.

Notable/Recently Completed Projects: We have recently completed Valent Biosciences in Libertyville, Il and CEVA logistics in Des Plaines, IL

CLAYCO, INC.

35 E. Wacker Drive, Ste. 1300 Chicago, IL 60601 P: 312.658.0747 Website: www.claycorp.com Key Contacts: Bob Clark, Executive Chairman & Founder, clarkb@claycorp.com; Kevin McKenna, President - Construction Group, mckennak@claycorp.com Services Provided: Clayco is a full-service turnkey real estate, architecture, engineering, designbuild and construction firm.

Company Profile: Clayco specializes in “the art and science of building”, by providing fast track, turnkey design build solutions in North America for commercial, institutional, industrial and residential building types. Clayco looks “beyond these walls” focusing on helping our clients fulfill their mission.

Notable/Recent Projects: St. Louis – Centene Campus, 100 Above the Park, Benson Hill, Delmar Devine Chicago - Willis Tower Transformation Project, Macy’s Flagship Redevelopment, Fulton East, Upshore ChapterNational – Blue Origin, Dominion, Centene East Coast HQ, Amazon E Commerce, Penn State

GILBANE BUILDING COMPANY

123 N. Wacker Drive, 26th Floor Chicago, IL 60606 P: 312.614.4100 Website: GilbaneCo.com Key Contacs: Karrie Kratz, Vice President, kkratz@gilbaneco.com Services Provided: Gilbane provides a full slate of construction and facilities-related services - from preconstruction planning and integrated consulting capabilities to comprehensive construction management, close-out and facility management services - for clients across various markets.

Company Profile: One of the nation’s oldest construction services companies, Gilbane Building Company began in 1870 and the fourth and fifth generations of the Gilbane family currently manage the company. Gilbane is recognized as an industry leader that delivers innovative construction services – from state-of-the-art sustainable buildings to the latest applications in construction technology for clients in a variety of market segments.

Gilbane’s Notable/Recent Projects Include: • Fresenius Kabi Melrose Park Expansion | Renovation • The Orchard Condominiums • The Lumen at Playhouse Square • Purdue University Third Street North Residence Hall and Meredith South Residence Hall • R1VER Development

22

AUGUST MARKETPLACE

C ON ST RU C T ION C OM PA N I E S / G E N E R A L C ON T R AC TOR S LAMP INCORPORATED

460 North Grove Ave. Elgin, IL 60120 P: 847.741.7220 | F: 847.741.9677 Website: lampinc.net Key Contacs: Ian Lamp, President, ilamp@lampinc.net Services Provided: Design/Build, General Construction, and Construction Management services for additions, build outs, renovations, and new facilities for office, industrial, logistic, technology, and commercial buildings.

Company Profile: Lamp Incorporated has been providing professional construction services for over 80 years. Our commitment of exemplary service to our clients creates projects that are completed early and with exceptional value.

Notable/Recent Projects: Mitutoyo America Corporation North American Headquarters, Aurora, IL. 96,000 SF warehouse addition; 63,000 SF, three-story office addition, which includes high tech showroom, two story atrium, corporate offices/ conference room, cafeteria, and locker rooms.

MCSHANE CONSTRUCTION COMPANY

9500 West Bryn Mawr Avenue Ste. 200 Rosemont, IL 60018 P: 847.292.4300 | F: 847.292.4310 Website: www.mcshaneconstruction.com Key Contacts: Mat Dougherty, PE, President, mdougherty@mcshane.com Services Provided: McShane Construction Company offers over 30 years of experience providing design/ build, design-assist and general construction services on a national basis. The firm’s diverse expertise includes build-to-suit and speculative developments for the industrial, food processing, multi-family, senior and student housing, office, healthcare, retail, hospitality, recreational and institutional markets.

Company Profile: Headquartered in Rosemont, Illinois with regional offices in Auburn, Alabama, Irvine, California, Phoenix, Arizona and Madison, Wisconsin, McShane Construction Company provides comprehensive construction services on a local, regional and national basis for a wide variety of market segments. The firm is recognized as one of the Chicago area’s most diversified and active contracting organizations with a reputation built on honesty, integrity and dependability.

Notable/Recent Projects: 4400 Grove – Chicago’s Bronzeville Neighborhood – Mixed-use, affordable fourstory development now complete totaling 84 rental units with commercial space on ground floor.

MERIDIAN DESIGN BUILD

9550 W. Higgins Road, Suite 400 Rosemont, IL 60018 P: 847.374.9200 | F: 847.374.9222 Website: meridiandb.com Key Contacts: Paul Chuma, President; Howard Green, Executive Vice President Services Provided: Meridian Design Build provides construction and design/ build construction services on a national basis with a primary focus on industrial, office, medical office, retail and food and beverage work.

Company Profile: With a team of in-house professional project managers, Meridian has extensive experience coordinating the design and construction of new buildings, tenant improvements, and additions/ renovations from 15,000 square feet to 1,000,000+ square feet. Meridian Design Build has been a Member of the U.S. Green Building Council since 2007.

Notable/Recent Projects: HSA Shorewood, Shorewood, IL - 757,880 sf speculative industrial facility for HSA Commercial Real Estate. Banner Wholesale, Chicago, IL - 75,000 sf wholesale grocery warehouse and corporate headquarters.

PEAK CONSTRUCTION CORPORATION

1011 E. Touhy Ave., Ste. 100 Des Plaines, IL 60018 P: 630.737.1500 | F: 630.737.1600 Website: peakconstruction.com Key Contacts: Michael P. Sullivan, Jr., CEO & Founder, msullivan@peakconstruction.com; John Reilly, President, jreilly@peakconstruction.com Services Provided: Peak Construction Corporation offers design/build and construction management services through a strategically developed culture, highly regarded for dynamic problem-solving abilities and a network of alliances that allow Peak to bring in experts and partners from a wide spectrum of fields and roles.

Company Profile: Peak Construction Corporation is a privately-held, well-capitalized design/ build firm. For almost 25 years Peak has delivered industrial, hospitality, office, healthcare, retail, multi-family and specialty construction projects on-time and on-budget.

Notable/Recent Projects: Peak’s recent Midwest projects include NorthPoint Development’s Heartland 94 Logistics Center Building 1, IDI Logistics’ Gateway Romeoville, Janko Group’s Bristol Business Park and various tenant improvements throughout Chicagoland.

SUMMIT DESIGN + BUILD, LLC

1036 W. Fulton Market, Suite 500 Chicago, IL 60607 P: 312.229.4630 | F: 312.229.1147 Website: summitdb.com Key Contacts: Adam Miller, President, amiller@summitdb.com; Deanna Pegoraro, Vice President, dpegoraro@summitdb.com: Larry Blouin, Vice President, lblouin@summitdb.com Services Provided: Summit Design + Build, LLC is a provider of full service general contracting, construction management and design/ build construction services for the commercial, industrial, multi-family residential, office/tenant interiors, hospitality and institutional markets.

Company Profile: Located in Chicago’s Fulton Market and with a regional office in Tampa, Florida, Summit Design + Build has been involved in the design and construction of over 330 buildings and spaces totaling more than 7 million square feet over the firm’s 16 year history.

Notable/Recently Completed Projects: TLC Ingredients, 1400 Monroe, Method, 113 E Oak, 1111 W Addison and 448 LaSalle – WeWork

VICTOR CONSTRUCTION

1701 E. Woodfield Rd., Suite 430 Schaumburg, IL 60173 P: 847.392.6900 Website: victorconstruction.com Key Contacs: Zak Schuttler, President, ZakS@victorconstruction.com Services Provided: Victor Construction Co., Inc. manages projects from ground-up site developments to interior build-outs, specializing in retail, industrial, and commercial markets.

Company Profile: Victor Construction Co., Inc. remains a family-owned and operated General Contractor. Having been in business since 1954, our firm has extensive experience managing every aspect of interior construction for the corporate, manufacturing, industrial, and retail sectors.

Notable/Recent Projects: Peppa Pig World of Play - 15k SF Childrens’ amusement center inside Woodfield Mall (former Rainforest Cafe space).

DE V E L OP E R S CENTERPOINT PROPERTIES

1808 Swift Drive Oak Brook, IL 60523 P: 630.586.8000 Website: centerpoint.com Key Contacts: Bob Chapman, Chief Executive Officer; bchapman@centerpoint.com; Michael Murphy, Chief Development Officer; mmurphy@centerpoint.com Services Provided: CenterPoint Properties is an innovator in the investment, development and management of industrial real estate and multimodal transportation infrastructure. CenterPoint acquires, develops, redevelops, manages, leases and sells state-of-the-art warehouse, distribution and manufacturing facilities near major transportation nodes. Our experts focus on large rail, port and trucking infrastructure assets.

Company Profile: CenterPoint Properties continuously reimagines what’s possible by creating ingenious solutions to the most complex industrial property, logistics and supply chain problems.

With an agile team, substantial access to capital and industry-leading expertise, we provide our customers with a competitive edge and ensure their success—no matter how great the challenge.

CONOR COMMERCIAL REAL ESTATE

9500 W. Bryn Mawr Avenue, Suite 200 Rosemont, IL 60018 P: 847.692.8700 | F: 847.292.4313 Website: conor.com Key Contacts: David J. Friedman, President, dfriedman@conor.com; Brian Quigley, Executive Vice President, bquigley@conor.com Services Provided: Conor Commercial identifies and implements the most suitable commercial real estate strategy to yield increased returns for each real estate opportunity. With offices and seasoned real estate professionals strategically located throughout the country, the firm provides the experience and resources needed to develop and stabilize real estate developments that maximize positive returns to investors and partners.

Company Profile: Conor Commercial Real Estate is the integrated real estate development firm of The McShane Companies headquartered in suburban Chicago, Illinois with regional offices located in Dallas, Houston, Irvine and Phoenix. The firm is active on a local, regional and national basis in the development of master-planned industrial and office parks, multifamily properties, medical office developments and built-to-suit projects for lease or purchase.

AUGUST MARKETPLACE CRG

35 E. Wacker Drive, Ste. 1300 Chicago, IL 60601 P: 312-658-0747 2199 Innerbelt Business Drive St. Louis, MO 63114 P: 314-429-5100 Key Contacts: Shawn Clark, President clarks@realcrg.com; Chris McKee, Chief Development Officer, mckeec@realcrg.com Website: www.realcrg.com Services Provided: Development, Site Selection, Site Planning & Cost Analysis, Engagement & Entitlements, Incentive Discovery & Negotiation, Financing, Development Management, Leasing & Administration, Asset Management and Investment Management.

Company Profile: CRG is a privately held real estate development firm that has developed more than 9,000 acres of land and delivered over 200 million square feet of commercial, industrial, institutional and multifamily assets exceeding $12 billion in value. CRG leverages a powerful North American platform with local market expertise and offices in Atlanta, Chicago, Columbus, Southern California St. Louis and Philadelphia. CRG’s philosophy of developing for the future and anticipating the enhanced needs of next generation users led to the creation of its industrial brand, The Cubes, and its multifamily brand, Chapter. For more information, visit CRG’s website at www.realcrg.com.

Notable/ Recent Projects: CRG’s recent Midwest projects include Wildhorse Village, an 80-acre, mixed-use development in Chesterfield, Missouri and NorthPark Distribution Center in St. Louis.

Nationally, the firm has various projects under The Cubes industrial brand, including The Cubes at DuPont near Seattle and The Cubes at Bridgeport in Atlanta

EDCS

LAKE COUNTY, INDIANA ECONOMIC ALLIANCE (LCEA)

440 W. 84th Drive Merrillville, IN 46410 P: 219.756.4317 Website: LCEA.us Key Contacts: Karen Lauerman, President & CEO, klauerman@LCEA.us; Don Koliboski, VP Economic Development, dkoliboski@LCEA.us Services Provided: The LCEA team provides economic development and site selection assistance; business expansion services; community connections with decision makers/elected officials; workforce analysis, demographics, cost comparisons and other critical information.

Company Profile: LCEA is the Lake County Indiana Economic Development Organization representing 20+ communities just minutes away from Chicago. It is the one resource for developers, site consultants and company executives considering relocation or expansion opportunities in Lake County, Indiana.

NAPERVILLE DEVELOPMENT PARTNERSHIP

22 E. Chicago Ave., Ste. 205 Naperville, IL 60540 P: 630.305.7701 | F: 630.305.7793 Website: www.Naper.org Key Contacs: Christine D. Jeffries, President, CJeffries@Naper.org Services Provided: The Naperville Development Partnership promotes the City of Naperville and its many businesses. Whether you are an existing business looking to relocate or a new company, we will take the time to show you what Naperville has to offer.

Company Profile: The Naperville Development Partnership is a public / private economic development organization that promotes business interest in the City of Naperville. Our mission is to enhance the economic vitality of Naperville and maintain its outstanding quality of life. This is achieved through the retention and expansion of existing businesses as well as attracting new business to the community.

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MICHIGAN CITY ECONOMIC DEVELOPMENT CORPORATION

Two Cadence Park Plaza Michigan City, IN 46360 P: 219.873.1211 Website: www.edcmc.com Key Contacs: Clarence Hulse, Executive Director, chulse@edcmc.com Services/Demographic Info: Michigan City has recognized $1.5 Billion in capital investment over the last 8 years, with more deals - $300 Million Multi-family projects on the horizon. We are located on Lake Michigan with easy access to I-94, I-80 and we are 1 hour drive East of Chicago. Michigan City is home to 32,000 residents with 5.6 Million visitors annually.

Incentives: Waterfront Opportunity Zone, 3 TIF Districts, Facade Improvement Program, Taxbased Incentives, Start Up Assistance, and Workforce Training Funds.

Recent CRE Activity: Double Track project ($500 Millions), Luxury 140 Apartment and Townhomes Complex, Waterfront Condominiums 150 Units, 32 Single Family Homes, SullairHitachi Expansion – 80,000 SF ($33 Millions), Shell-Criterion Expansion ($34 Millions), GAF Expansion – 200,000 SF ($30 Millions), Marbach Manufacturing Relocation, and 30 Independent Restaurants in our Downtown.

M U LT I FA M I LY F I NA N C E F I R M S ASSOCIATED BANK

525 W. Monroe Street, Ste. 2400 Chicago, IL 60661 P: 312.544.4645 Website: associatedbank.com/cre Key Contacs: Gregory Warsek, Group Senior Vice President/ Senior Regional Manager, greg.warsek@associatedbank.com Services Provided: Our clients include professional developers of income producing commercial real estate, including multi-family properties, retail, office, self- storage, student housing, industrial, and for sale housing.

Company Profile: Commercial Real Estates offices are located in Chicago, Milwaukee, Madison, Green Bay, Cincinnati, Indianapolis, Minneapolis, Detroit, St. Louis and Dallas. Associated BancCorp has total assets of $35 billion and is one of the top 50 financial services holding companies in the United States.

CHASE COMMERCIAL TERM LENDING

10 South Dearborn, Floor 19 Chicago, IL 60603 P: (844) 853-7814 Website: chase.com/CTL Key Executives: David Fetter, Multifamily Lending Regional Manager; Jake Bade, Commercial Mortgage Lending Regional Manager Services Provided: Chase Commercial Term Lending is the nation’s #1 multifamily lender providing owners the best financing solutions for purchasing or refinancing stabilized apartment buildings, and industrial, office, retail, and mixed use properties.

Description: Our Commercial Real Estate teams provide clients the insights, hands-on service, array of comprehensive financial solutions, and unrivaled certainty of execution they need to be successful throughout the cycle. Clients benefit from our no hassle loan process, simplified documentation, competitive pricing, low fees, exclusive industry insights, and excellent customer service from start to finish. Our goal is to provide the best, straightforward multifamily and commercial property loan financing experience in the industry. Call us today to learn how to put our resources to use on your next deal.

Service Territory: Nationwide

MARQUETTE BANK

1628 W. Irving Park Road, Unit 1D Chicago, IL 60613 P: 312.375.0789 Website: emarquettebank.com Key Contacts: Bill Hinsberger, Executive Vice President, bhinsberger@emarquettebank.com; Patrick Tuohy, Senior Vice President, ptuohy@emarquettebank.com Services Provided: Multifamily/apartment building lending for all Chicagoland. Fast, local decision making. Dedicated local servicing staff. Simple, no-hassle paperwork. Quick close.

Flexible terms. All clients enjoy ZRent – an automated, hassle-free, no-cost way to collect monthly payments from tenants.

Company Profile: Marquette Bank has 20 branches, 2 loan offices and $1.9 billion in assets.

Independently owned/operated since 1945. Offering clients full-service, banking, financing, insurance, trust and wealth management services.

FOR ADVERTISING OPPORTUNITIES IN THIS SECTION, PLEASE CONTACT SUSAN MICKEY AT SMICKEY@REJOURNALS.COM OR 773.575.9030

I L L I N O I S R E A L E S TAT E J O U R NA L AU G U S T 2 0 2 1

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co-founder and Managing Principal of Interra Realty.

MULTIFAMILY (continued from page 1)

about the challenges that have impacted the multifamily market, but the reality, real estate professionals proclaim, is that there are always going to be people who want to live in the city. Even more so, there are many residents who want to be in the heart of the urban core.

“We had a pipeline going into March right at the start of the pandemic that was around $80 million dollars in under-contract stuff and most of it was paused or temporarily canceled,” Morgan says of the early weeks of the pandemic. “But all of it returned shortly thereafter and we wound up getting it all closed.”

Interest in new, upscale rentals continues despite ongoing pandemic conditions “Here’s the headline: demand for urban, new luxury apartments has never been stronger,” says Aaron Galvin, CEO and co-founder of Luxury Living Chicago, which oversees leasing for 3,000 upscale rental apartments across the city. “It is all the way back and we have already exceeded where we were pre-pandemic on leasing percentage, occupancy percentage, and even rent prices.”

The new Panorama apartment building in Lakeview, which reached 70% leased in its first three months. Photo courtesy of Luxury Living Chicago Realty.

And as of late, there’s also been a big push out in the suburbs as the rental market continues to grow outside of the city. “In previous years, the suburbs may have represented 10% to 20% of our total sales velocity,” Morgan says of Interra’s brokerage activity. “But for this year, it’s probably going to represent closer to 20% of our total sales velocity.”

Galvin’s bullishness on the high-end, urban rental market seems almost defiant in the face of the ongoing nature of the pandemic and the uncertainty caused by it, however, at this point, the rental rebound offers optimism and reflects the durability of Chicago real estate, he suggests. And just like many other industries, the multifamily market has had to roll with the punches and evolve with the times.

A key strategy that helped keep multifamily landlords’ rent rolls steady was the use of concessions coupled with longer term leases. The trade for a month or two of free rent and discounted, or entirely reduced fees, was a longer lease period, which provided both the renter and landlord additional time and a stronger sense of security.

“People were getting a once in a lifetime deal, but at the same time, the fact that the millennial or Gen Z demographic, which makes up the majority of the folks who are living in newer downtown buildings, were committing to 18- to 24-month leases gave us a lot of confidence heading into 2021 that the narrative about the death of cities was overblown,” Galvin says.

However, at this point, many of the generous concessions have since burned off and occupancy rates have stabilized. During the peak of the pandemic fallout, average occupancy rates hovered in the mid-80s range, Galvin indicates. But currently, percentages are now upwards of 95% to 100% leased, he adds.

For all intents and purposes, the pandemic marks the end of the last development cycle, Galvin suggests, which saw the delivery of roughly 40,000 new Class A units between 2013 through 2023. And for much of this cycle, these new apartments were absorbed each year, he adds.

The pandemic and economic fallout caused by it is expected to have an impact on new deliveries for the following years, however. Galvin predicts that we may see

Some buyers who put deals on hold at the start of the pandemic ended up paying more in the end on a property after returning to the table, Morgan says. While those weeks seemed uncertain and putting down millions on rentals was a huge risk, many who went through with deals instead of stepping away ultimately ended up playing their cards right while others were starting over during an extremely hot and competitive market.

The vintage 16-unit building at 700 W. Grace sold for $5.73 million this year. Photo courtesy of Interra Realty.

as little as 1,600 total rentals delivered in the next two years. But by 2024 and 2025, those numbers could return to

the number one most requested feature right now for apartment seekers, and I don’t think that’s going to change.”

pre-pandemic levels of witnessing upwards of 4,000 new apartments each year, he suggests.

Multifamily sales remain strong both in the city and suburbs

Going forward, we can also expect to see some changes in apartment floor plans, amenities, and outdoor offerings. The massive shift toward working from home will continue for countless professionals over the following years, and those renters will need extra space in their apartment for a home office. Galvin suggests that newer buildings will likely feature more units with dens and more of a balanced mix between one- and two-bedroom apartments.

Additionally, now more than ever, renters want more outdoor space and communal areas. And in addition to wanting a nook or den for a home office, more buildings will bolster their coworking offerings.

“Green space has never been more important,” Galvin says. “Outdoor space is

Another key aspect of the rental recovery has been the strong demand and sales for multifamily assets, particularly recently remodeled or new construction product.

Recent sale prices on properties throughout popular lakefront communities from Rogers Park to South Shore continue to hedge higher and higher, while trades on assets in high-demand areas like Lakeview and Wicker Park push into new per-unit sales record territory.

But there was definitely a period of uncertainty during the first couple of months of the stay at home order, and some investors paused deals to see what would eventually happen. But once leasing and rent rolls continued to prove strong and government assistance was announced to help struggling renters cover rent payments, buyers and sellers went almost immediately back to the table, says Jon Morgan,

Low interest rates and access to capital have been key drivers of the current residential real estate boom, but the desire to buy and hold hard assets is another important component in the multi-family market, Morgan suggests. The pandemic showcased the volatility in the stock market and more abstract assets such as cryptocurrencies, but a fully-leased multi-unit apartment building offers a greater sense of security for many investors.

“I think as long as interest rates stay at all time lows, investor activity and appetite is going to remain here for a while until you start seeing rates get back up into the fives plus,” Morgan says. “And that could be some time when you look at economic indicators.”

But how would the market fare if another big wave of COVID panic and mandates hit Chicago? And how are investors weighing other issues such as property tax concerns and the omnipresent pension crisis in their calculations on multi-unit properties? And with prices reaching new heights, how much more room for growth is there in the short term?

“What we’re finding is that the more sophisticated investor is getting opinions and they’re basing their offers off of real estate tax counsel opinions,” Morgan explains. “And I think investors kind of move past [the pension issue] typically, because they look at the economic growth, the fact that new companies are still coming here, and they look at the economy as a whole.”

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