It’s good to be the tortoise: Stability still reigns in the Midwest multifamily sector
By Dan Rafter, Editor
Multifamily markets across the Midwest rarely see the soaring monthly rents and surge in new construction activity that Sunbelt and coastal markets often do. And to the commercial real estate professionals working in this part of the country? That’s good news.
As they say, being the tortoise is better than being the hare: Slow and steady is a recipe for success, with Midwest multifamily assets still attracting a steady stream of renters and investor dollars, even with the uncertainties surrounding the U.S. economy.
We spoke with multifamily professionals across the Midwest about the state of the region’s apartment market. Their consensus? This year should see measured, but steady, rent growth, no big uptick in occupancy rates and an increase in investment sales activity.
In other words? A typical Midwest performance. And that’s just fine.
Here is some of what these multifamily specialists had to say.
Senior Director | Real Estate Finance
Walker & Dunlop Birmingham,
Michigan
The multifamily sector has long been a top performer in the CRE industry. Can you go through some of the reasons why demand from renters remains so high for multifamily units?
Charles Krisfalusi: This sector has been resilient. If you think back to after 2008, that post-recession time, we were underwriting multifamily properties with 10% vacancies. That is a little tight for underwriting, but it is not dangerous. And ever since then, vacancies have been very low, very stable in multifamily.
The multifamily sector in Michigan has been a nice resilient market. Demand has remained high in Michigan for apartment units. That has kept the vacancies here low. We haven’t seen an oversupply of new units coming online in Michigan. That has helped to keep that demand high. MULTIFAMILY (continued on page 20)
INDIANAPOLIS
Forget the hospital: Patients demanding treatment at medical offices, freestanding clinics
B
y Dan Rafter, Editor
It’s not a new trend, but it’s one that’s showing no signs of slowing: Patients today are demanding more care in medical office buildings, freestanding clinics and ambulatory care centers. The goal? Avoid the hassles of seeking care in a sprawling hospital campus.
This evolution in patient expectations – which, again, is only gaining in strength – has caused
Charles Krisfalusi
Image by LEEROY Agency from Pixabay
Good to be the tortoise? Stability still reigns in the Midwest multifamily sector: Multifamily markets across the Midwest rarely see the soaring monthly rents and surge in new construction activity that Sunbelt and coastal markets often do. And to the commercial real estate professionals working in this part of the country? That’s good news.
Forget the hospital: Patients demanding treatment at medical offices, freestanding clinics: It’s not a new trend, but it’s one that’s showing no signs of slowing: Patients today are demanding more care in medical office buildings, freestanding clinics and ambulatory care centers.
The rising cost of borrowing? It means another quarter of higher cap rates in net-lease sector: In what has become a long-term trend, cap rates in the single-tenant net-lease sector continued to rise in the first three months of the year, marking the 12th consecutive quarter in which cap rates increased for this key commercial sector.
Ready for the boom: Southern Indiana to become defense and aerospace manufacturing hub with new ACMI Properties project: The Southern Indiana community of Bloomfield is poised to become a hub for defense, aerospace and advanced manufacturing thanks to a major project by ACMI Properties.
A century of big builds: Chicago’s W.E. O’Neil celebrates 100 years in business: Building a successful small business is no easy task. And one that lasts a century? That’s especially impressive. And it’s what Chicago’s W.E. O’Neil Construction has done.
Momentum is trending in the right direction for commercial real estate industry: Investors still view commercial real estate in the United States as a top outlet for their investment dollars. At the same time, commercial real estate professionals are optimistic about the state of the industry in the early stages of 2025.
40 Commercial Services 1 12 30 24 26 28 1 8 10
Office leasing activity on the rise in Milwaukee, still sluggish in Minneapolis: Josh Krsnak, chief executive officer of Hempel Real Estate, has an interesting view of the Midwest office market.
Women’s History Month: Notable Women in CRE: March was Women’s History Month, a time to honor the achievements, resilience and contributions of women throughout history. In recognition of this, REjournals spotlighted six female leaders making an impact in the commercial real estate industry.
Women in Construction Week 2025: A look at three leaders from Chicago’s Leopardo: Women in Construction Week began March 2 of this year. The goal? To honor those women who are making an impact in the commercial and residential construction industries.
COLUMNS/DEPARTMENTS
6 Editor’s Letter
32 Will the great uncertainty accelerate or derail the great reset?
33 Top five investment trends in healthcare real estate
34 Developers and builders seek infill sites for premium multifamily development
36 Making room for industrial infill
38 The Promise and Peril of Using Artificial Intelligence in Communications
39 The new face of law offices: Designing spaces that work for hybrid professionals
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When it comes to convenience stores vs. fast food? The convenience stores are winning
By Dan Rafter, Editor
Remember when a convenience store meal meant a bag of chips, stick of beef jerky and a bottle of pop? You can still get all that. But you can also nab prepared meals, hot sandwiches, salads and wraps. And these increased offerings are hitting fast-food chains.
Coldwell Banker Commercial in its latest Trend Report focused on how convenience stores have shifted from a place for consumers to stop quickly for snacks and fuel to popular food destinations. This shift has made these stores an increasingly attractive asset class for commercial real estate investors, according to the Coldwell Banker Commercial report.
These stores are especially popular for investors in the net-lease market.
“The convenience store industry is evolving to meet changing consumer needs,” said Dan Spiegel, senior vice president and managing director of Coldwell Banker Commercial, in a statement. “With smaller households, more urban locations and evolving food preferences, the sector is undergoing significant transformation. Given their frequent visits, convenience stores must stay closely connected to shifting consumer lifestyles to remain competitive in the retail market.”
Convenience store product mix drives growth
The report highlights how convenience stores have evolved from fuel and snack retailers into quick-service food and grocery alternatives.
This shift is most evident in the type of products that convenience stores offer. According to Coldwell Banker Commercial’s report, the sales of prepared food at convenience stores have risen 12.2% year-over-year.
In bad news for the country’s fast-food restaurants, the report also found that 56% of consumers now consider convenience stores to be viable substitutes for fast-food chains.
“As convenience stores continue to add to their food offerings, their real estate needs are expanding.”
This growth, fueled by consumers’ demand for convenient, affordable and healthier food options, has added to the sector’s stability, even though profit margins remain narrow at around 5% to 7%. Coldwell Banker Commercial reported that the high turnover of products and steady consumer visits overcome the tight margins, making convenience stores a reliable source of income for investors.
The shift in consumer behavior–especially as inflation raises grocery prices–has positioned convenience stores as an attractive alternative for those seeking fresh food at affordable prices, according to the trends report.
Changing real estate needs
As convenience stores continue to add to their food offerings, their real estate needs are expanding.
In its report, Coldwell Banker Commercial points to chains like QuikTrip, Casey’s General Stores, RaceTrac and Wawa. These chains are investing in larger store formats to accommodate their expanding food preparation areas.
Many operators are also opening new locations in urban centers and exploring non-traditional spaces such as college campuses and downtown loca-
tions. These provide new opportunities for real estate investors.
Investment 0pportunities for convenience stores
Even though 60% of convenience stores are independently owned, the sector is seeing significant consolidation. Major players like 7-Eleven plan to open 500 new stores in the United States and Canada by 2027, while regional chains such as Wawa, Sheetz and Buc-ee’s are expanding into new markets.
This consolidation creates opportunities for investors to acquire properties with stronger tenant profiles and more predictable cash flows.
The sector’s strong position, driven by convenient locations, long-term leases (up to 20 years) and low vacancy rates, makes this asset class a stable investment option in the net-lease market. These factors, combined with steady demand, make the sector appealing to net-lease investors seeking reliable, long-term returns.
Image by freepik.
The rising cost of borrowing? It means another quarter of higher cap rates in net-lease sector, according to The Boulder Group report
By Dan Rafter, Editor
In what has become a long-term trend, cap rates in the single-tenant net-lease sector continued to rise in the first three months of the year, marking the 12th consecutive quarter in which cap rates increased for this key commercial sector.
That’s one of the big takeaways from the first quarter Net Lease Market Report released April 7 by The Boulder Group.
According to The Boulder Group’s research, overall cap rates in the single-tenant net-lease sector rose to 6.78%, a modest jump of two basis points from the fourth quarter of 2024.
Single-tenant cap rates increased to 6.56% for retail assets, a jump of four
“The persistent upward trend in net lease cap rates now spans three years. This is reflective of sustained high borrowing costs and inflationary pressures.”
basis points from the fourth quarter of last year; 7.80% for office properties, which represented an increase of two basis points since the fourth quarter
of 2024; and 7.23% for industrial. That industrial cap rate was unchanged from the last quarter of 2024.
Randy Blankstein, president of The Boulder Group, a national net lease CRE firm with offices in Wilmette, Illinois, and Denver, said that the most recent
Photo courtesy of The Boulder Group.
increase in cap rates should not have been a surprise to anyone following this sector.
And the reason behind these cap rate jumps shouldn’t be a surprise, either. It’s all about how expensive it is to borrow money today.
“The persistent upward trend in net lease cap rates now spans three years,” Blankstein said in a statement. “This is reflective of sustained high borrowing costs and inflationary pressures.”
The number of net-lease properties rose in the first quarter, too, according to The Boulder Group’s research.
The net-lease report said that property supply in the single-tenant sector increased by more than 5% when compared to the prior quarter. This, too, is a trend: During the past two years, the supply of net-lease properties has surged by nearly 30%.
The reason behind this? The Boulder Group points to a slowdown in transaction speed and a pricing gap that still exists between buyers and sellers.
“Of all the net lease subsectors, the drug store sector is experiencing the slowest transaction volume and a glut of supply.”
The increase in supply, though, isn’t hitting all net-lease sectors the same.
“Of all the net lease sub-sectors, the drug store sector is experiencing the slowest transaction volume and a glut of supply,” said Jimmy Goodman, partner with The Boulder Group, in a statement.
Recent news regarding private equity company Sycamore Partners’
acquisition of Walgreens further compounded the slowdown in sales activity in the drug store category, The Boulder Group reported.
Uncertainty over Sycamore’s longterm strategy has deepened the sub-sector’s supply and slowed deal flow. Not surprisingly, cap rates in the drug store sector increased by 44 basis points from the last quarter of 2024 to the first of this year.
Higher interest rates, as they have with all CRE sectors, have also impacted net-lease sales activity.
According to The Boulder Group, the net-lease market continues to adjust to the higher interest-rate environment experienced in recent years. Transaction volume increased in the fourth quarter of last year, and The Boulder Group is predicting a slight uptick in sales volume in 2025.
There is still caution, though. The Boulder Group said that investors will be carefully monitoring the capital markets following the Federal Reserve Board’s decision to hold interest rates steady during its March meeting.
If short-term rates continue to drop in the near term and uncertainty remains in the overall financial markets, netlease activity is expected to increase, said The Boulder Group. But the CRE firm says that even with an increase, activity in this sector won’t rise close to the heights in pricing or transaction volume that it saw during the peak times of 2020 and 2021.
Two different office markets: Leasing activity on the rise in Milwaukee, still sluggish in Minneapolis
By Dan Rafter, Editor
Josh Krsnak, chief executive officer of Hempel Real Estate, has an interesting view of the Midwest office market. Hempel Real Estate operates offices in Eden Prairie, Minnesota – serving the Minneapolis/St. Paul market – and Milwaukee. Krsnak, then, has an up-close view of one downtown Midwest office market that remains resilient and one that continues to struggle.
The market with a resilient downtown office sector? Milwaukee. The struggling one? Minneapolis/St. Paul.
What’s the difference between these two markets? Hempel said that government officials are encouraging business development in the Milwaukee market. It’s easier to run a successful business here.
In the Minneapolis market? Government bodies aren’t quite as pro-business. And that makes a difference, Hempel said.
“Milwaukee is performing better than Minneapolis,” he said. “We are getting more deals done in Milwaukee than in Minneapolis, especially in downtown
Milwaukee compared to downtown Minneapolis. Milwaukee is just more friendly toward business development today.”
As an example of this, Krsnak points to Fiserv, which in March of last year moved its global headquarters from suburban Brookfield, Wisconsin, to downtown Milwaukee. Krsnak said that one of the reasons why Fiserv moved into the 170,000-square-foot facility was that the Milwaukee Common Council approved a TIF package to lessen the costs that the company would face.
While this move did cost the city money, it also helped bring a key employer to downtown Milwaukee.
“Milwaukee gave them a TIF, money that Fiserv needed to help build and remodel the space they moved into,” Krsnak said. “In return, Fiserv has required that their employees be in the office three days a week.”
That helps bring more activity to downtown Milwaukee, a benefit for the surrounding retailers and restaurants.
Photo by Leroy Skalstad
Another big office move in downtown Milwaukee? Northwestern Mutual’s downtown office tower redevelopment hit a key milestone this March, the topping off of the 18-story building.
Northwestern Mutual expects the $500 million redevelopment project to wrap up in 2027. The company is moving about 2,000 employees from an office in Franklin, Wisconsin, to the downtown location.
This development is partly fueled by $30 million in TIF funds. The Common Council approved this TIF in 2023. As with Fiserv, Northwestern Mutual is requesting that its employees work in the downtown office three days a week.
“I’ve signed 202,000 square feet of leases in downtown Milwaukee in the last couple of years,” Krsnak said. “The reason why? Everyone is committed to doing what it takes to get companies to locate in the city’s downtown.”
That isn’t always the case for downtown Minneapolis, Krsnak said. For one thing, it’s extremely difficult to get exterior signage on an office building in downtown Minneapolis. That seems like a small nuisance, but it does keep some companies from locating in the center of the city, Krsnak said.
Minneapolis isn’t as generous with TIF programs either, Krsnak said.
“The big difference between Minneapolis and Milwaukee is that people are not as likely to move to downtown Minneapolis because they are not getting the same opportunities as they are in other cities,” Krsnak said.
Krsnak said that in the past as he traveled the country, people frequently told him how much they loved Minneapolis. The city’s reputation, though, has taken a hit since COVID, the murder of George Floyd and the riots that followed that crime.
City officials need to recognize this and make it easier and more attractive for businesses to locate in downtown Minneapolis, Krsnak said.
“Minneapolis has lost some of its cache,” he said. “We have to start acting like we are an underdog, not like we are the city that everyone is trying to replicate.”
While downtown Minneapolis’ office sector is sluggish, Krsnak said, leasing activity is stronger in the city’s surrounding suburbs. Part of the reason? Hempel points to signage. Tenants can place their names on the exteriors of suburban office buildings more easily.
“There is no question about it, we are seeing more office transactions in the suburbs,” Krsnak said. “All my buildings in the suburbs have exterior signage. Downtown, that is a more contentious issue. It might change. I’m hoping it does.”
Krsnak points to a 15,000-square-foot office lease his company recently closed in suburban Eden Prairie, Minnesota. Krsnak said that the firm moved in partly because it can have its name on the building. That was a key factor in addition to the property’s easy access to the interstate.
“Everyone likes to see their name in lights,” Krsnak said. “It’s free advertising to put your name on the building.”
This doesn’t mean that downtown Minneapolis hasn’t improved since the tough days of 2020. Krsnak said that the city’s downtown is far busier today than it was back then. Activity levels downtown aren’t quite as high as they were before the pandemic, but they are stronger than they were in 2020 or 2021.
The biggest challenge for downtown Minneapolis? Major employers Target and Hennepin County have not required their employees to come back to their downtown offices on a frequent basis yet.
And without the workers from those two major employers, downtown Minneapolis still looks quieter than it did before the pandemic.
“The county, especially, needs to step up,” Krsnak said. “They are only hurting themselves. When you don’t have enough workers downtown, that downtown ecosystem gets off balance. I would argue that if county employees don’t want to come back downtown, you should find employees who do. If you must pay them more, so be it.”
In Milwaukee, Milwaukee County recently signed a lease for 25,000 square feet in the city’s ASQ Center.
“They are eating their own cooking in
Milwaukee,” Krsnak said. “In Milwaukee County, they are putting their employees downtown. In Minneapolis, that is not happening.”
And what about those office spaces that aren’t modern enough to attract tenants today? Or those that lack the amenities that workers and tenants both want?
Krsnak said that conversions will play a role in taking older, outdated office spaces off the market. The challenge remains that not enough older office buildings are candidates for conversion. To convert an office building to multifamily, for instance, developers need both the right building and the right location.
Conversions are expensive, too, further limiting how many older office buildings can be transformed into other uses.
Still, even with these hurdles, Krsnak said, it makes sense for developers to convert as many undesirable office buildings as they can.
“We need less office inventory. It’s a supply-and-demand issue,” Krsnak said.
Hempel isn’t adverse to removing older office stock from the market. Krsnak said that the company earlier this month purchased a 40,000-square-foot office building in St. Louis Park, Minnesota, that the company will tear down. Hempel will build an apartment building on that site.
Hempel is also building a new office building on land across the street.
“Why are we tearing down the building we just purchased?” Krsnak asked. “The way these older buildings are designed and functioning today don’t match what employers want. The more of these outdated office properties that get repurposed, torn down and utilized in new ways, the better. But you need TIF districts and tax credits or the economics don’t work. If you don’t get that help, the math doesn’t pencil out.”
Ready for the boom: Southern Indiana taking the steps to become defense and aerospace manufacturing hub with new ACMI Properties project
By Dan Rafter, Editor
The Southern Indiana community of Bloomfield is poised to become a hub for defense, aerospace and advanced manufacturing thanks to a major project by ACMI Properties.
Construction is set to begin on the National Security Industrial Hub in the second half of 2025 in Bloomfield, Indiana. The 1,100-acre site is positioned near the Naval Surface Warfare Center – Crane Division, the world’s third-largest naval installation. The goal is to attract defense, aerospace
and manufacturing companies to the site.
Prometheus, a U.S.-based supplier of solid rocket motors, will be the site’s first anchor tenant. The company will establish its headquarters and production facility on 550 acres of
the National Security Industrial Hub. Prometheus is scheduled to open its facility here in phases starting in 2027.
And this should just be the beginning, said JLL executive managing director Steve Schwegman, who along with fellow JLL executive managing direc-
Image by wirestock on Freepik.
“For the most part, it’s the same thing we would do for any project that we are marketing. It’s always about the real estate 101 marketing. We had to get smart about who are the manufacturers that would be interested in a project like this and who are the vendors for those manufacturers and suppliers. The big difference has been that we have added to our list of perspective tenants and occupiers.”
tor Brian Seitz, is representing landlord ACMI Properties in leasing space at the new development.
Schwegman said that he expects a steady stream of defense, high-tech and aerospace tenants to seek space in the hub. More companies are seek-
ing to open manufacturing space in the United States, a trend that is no longer new.
“A lot of people will cite tariffs as a reason why we will see more reshoring of industrial and manufacturing in the United States,” Schwegman said.
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“But this trend has been in motion since COVID. Companies are looking for any way to shorten the supply chain and to increase diversity in their manufacturing bases so that they don’t have all their eggs in one geographic basket.”
Shortening the supply chain is a major goal of many of JLL’s clients, Schwegman said. And that is something that will benefit the new development in Bloomfield.
“The shorter the distance a product has to travel, the faster you can get it into your end users’ and customers’ hands,” Schwegman said. “This has been going on nationally. We are just starting to see it in a big way in Indiana.”
According to ACMI Properties, the National Security Industrial Hub will offer tenants flexible site configurations tailored to mission-critical industries, including aerospace, energetics and munitions manufacturing.
JLL says that the development, covering 1,141 acres, is designed to lower economic barriers for startups, ensuring that companies have the resources they need to rapidly
test, refine and scale production. The hub will also foster collaboration between private industry and the defense sector.
Simon Shewmaker, ACMI’s head of development, said that the site offers plenty of positives for tenants, including, of course, its first, Prometheus.
The land is a close drive to Bloomington, Indiana, and Indianapolis. The recently completed extension of Interstate-69 connects the location to Indianapolis, meaning that the site is only a 30-minute drive from the state’s biggest metropolitan area, and all the resources and the deep labor pool it offers.
“The world is changing,” Shewmaker said. “It is important for the United States to have resiliency with its industrial base and be able to support the aerospace and defense efforts. This administration and prior administrations are trying to focus on bringing back that capacity to the United States. There has been a broader effort to enhance manufacturing in the United States. It’s not just U.S.-based companies but private
companies that are in allied countries that are being encouraged to establish a presence here and manufacture on U.S. soil.”
Shewmaker said that even though the National Security Industrial Hub will cater toward advanced manufacturing tenants, especially those in the aerospace industry and those focusing on national security, ACMI Properties has also had conversations with manufacturers in other industries. He said that he expects ACMI to make additional announcements on incoming tenants soon.
How will JLL market this site? Schwegman said that it’s still about selling the benefits of the site and communicating them clearly to possible tenants.
“For the most part, it’s the same thing we would do for any project that we are marketing,” Schwegman said. “It’s always about the real estate 101 marketing. But in addition to that, we had to get smart about who are the manufacturers that would be interested in a project like this and who are the vendors for those manufacturers and suppliers. The big difference
has been that we have added to our list of perspective tenants and occupiers.”
Schwegman said that the project will provide a boost to the surrounding area, most notably through the creation of new jobs. And these new jobs will be high-paying ones.
“What’s most exciting about this type of project is that the companies here will employ a skilled workforce,” Schwegman said.
“These are higher-paid, technical jobs. It is great for the tax base. Previously, this property was considered agricultural property that had a low tax rate. That is now changing and will be a financial benefit to the area.”
Shewmaker said that the skilled workforce available to ACMI Properties made a difference, too, when the company was searching for a site for its project. As Shewmaker says, tenants at the development can bring in workers from Bloomington or Indianapolis, as neither commute is too long.
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a shift in the commercial real estate needs of healthcare providers. Today, physician groups and medical systems are focusing on adding smaller-scale medical facilities across their markets.
As Ross Goyer with Indianapolis’ Cornerstone Companies says, medical providers are going where the rooftops are. It’s no longer enough for healthcare providers to operate a centrally located hospital and expect patients to come to them. These medical providers must go to where their patients live and work.
Goyer understands this trend. He’s executive vice president of brokerage with Cornerstone Companies, a brokerage that helps physicians, hospitals and third-party owners develop, build, lease and manage healthcare real estate.
“Patients don’t want to go to the hospital unless they have to be in the hospital,” Goyer said. “There’s been a shift to the outpatient setting for a rising number of procedures. Insur-
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Ben Cohen, senior vice president of brokerage with Cornerstone Companies, said that another reason for the strength of the healthcare real estate sector is that patients and physicians still prefer to see each other in person.
“Medical is still a use in which providers have to see their patients,” Cohen said. “There was a scare during the pandemic that the way of practicing medicine would drastically change and that the use of telehealth services would increase substantially. There was a worry that the need for patients to come into the office would decrease.”
That, though, didn’t happen, Cohen said.
“If anything, since the pandemic we have further strengthened the notion that both patients and clinicians appreciate and need that personal one-on-one time in person,” Cohen said. “People recognize that seeing each other in person is far superior to being seen virtually.”
Decentralized care
Because of the move to decentralized care, physician groups and healthcare providers are frequently opening new medical office space. This is happening, too, in the Indianapolis market, where Goyer says that there is a “decent amount” of demand for new medical office space.
Goyer points to the northern suburbs as being an especially strong market for this type of real estate. Communities such as Zionsville, Westfield, Carmel, Fishers and Noblesville are all seeing a steady influx of new medical office space, Goyer said.
“There’s been a push by patients wanting to be seen for as much as they can as close to home as possible,” Cohen said. “That has led different provider groups to expand their reach from a real estate perspective. They are trying to integrate into as many different communities as they can to allow patients to be seen as close and conveniently as possible.”
Cohen said that larger healthcare systems with enough capital are buying land in what now seem like far-flung markets and holding it for years to wait for population growth to hit those markets.
Other health systems act quickly when they see a market that they need to serve. They might purchase a retail center or flex building and remodel it into a medical space.
Still other health providers are open to becoming landlords, Cohen said. If they have extra space in their buildings, they’re not hesitant to rent out that square footage.
“Many systems and groups have become more strategic with their real
INDIANAPOLIS (continued from page 1)
The Bridges Medical Campus, Urology of Indiana, in Carmel, Indiana, is an example of a healthcare project taken on by Cornerstone Companies. (Photo courtesy of Cornerstone Companies.)
INDIANAPOLIS
estate moves,” Cohen said. “That has led to a more competitive landscape within the healthcare real estate realm, not only in Indianapolis but nationally, too.”
And some of this new space is resulting from the conversion of traditional office space into medical offices.
“Along the Meridian corridor in the Indianapolis market, you are seeing several office buildings near the Indiana University Health North Hospital in the process of converting to healthcare uses,” Goyer said.
A smaller number of conversion projects are transforming former retail spaces into medical offices. That type of conversion happens more frequently in outlying areas, in smaller- to medium-sized towns, Goyer said.
“There is a need for healthcare services in those markets that are about 10 to 20 miles outside of the I-465 loop around Indianapolis,” Goyer said. “We’ve seen some old grocery stores converted in those markets or some smaller strip center space converted to urgent care. There’ s not a lot of that around Indianapolis proper.”
Cohen said that healthcare providers often turn to conversions because of the lack of second-generation medical space on the market today.
“Larger systems or physician groups that hadn’t been as open to outsidethe-box thinking about what a clinic or ambulatory care center should look like are now open to new ap-
proaches,” Cohen said. “Groups are very much open now to repurposing an existing space whether they are entering a market or searching for the ideal location within a market.”
The Indiana University Health medical office building in McCordsville, Indiana, is an example of the type of healthcare project Cornerstone Companies has been taking on. (Photo courtesy of Cornerstone Companies.)
The challenge with conversions is that most spaces – office or retail – aren’t a good fit for medical uses. Successful conversions also require owners who understand how healthcare real estate deals are structured, Goyer said.
An example? Medical tenants will typically ask for higher improvement allowances than landlords might be used to when dealing with traditional office tenants.
Owners must be sensitive to the existing tenant mix in their buildings, too, Goyer said. Existing office tenants might not want to share space with a medical practice.
“If you put in certain healthcare uses, you might lose your existing office tenants,” Goyer said. “A law firm might not want to share a common lobby with a primary care office that is bringing in a lot of people who aren’t feeling well. Ownership must be aware of the existing tenant mix and how those tenants might react to the addition of a healthcare provider.”
An existing office building might also need structural improvements to properly house a medical use. This is most common with specialty uses such as surgery, imaging centers and cancer treatment centers that use heavier equipment.
“Most office buildings can’t meet those needs,” Goyer said. “A surgery center might have higher heating and cooling requirements than a standard office space. It might not be possible to get an existing office building’s ductwork sized appropriately to get a conversion to medical space to work.”
Even the existing column spacing of a traditional office building can prove challenging. If the column spacing is too narrow, it might be challenging to draw up exam room layouts that work.
Goyer said that the best healthcare candidates for conversions, then, tend to be traditional clinics or primary care physicians. Converting traditional office space to medical use for specialty care uses is often too challenging, he said.
The movement away from hospital settings is no short-term trend
Goyer said that the demand for medical office space, freestanding clinics and ambulatory care centers will continue to rise, whether these spaces are of the new construction variety or conversions from traditional office space.
Goyer said that a growing number of physician groups want to own their real estate, gaining more control over their medical facilities. Cornerstone Companies recently built three medical properties in Indianapolis’ Meridian corridor and two along I-69 on the northeast side of town.
Healthcare facilities are being built, too, in Indianapolis’ outer-ring suburbs, Goyer said. This, again, is an example of healthcare providers following the rooftops and building new care centers where their patients are moving.
Patients have changed, too, with many elderly people undergoing procedures that they would have passed on years ago.
Goyer gives this example: Say a 75-year-old tears an ACL. In the past, that person would have purchased a cane and limped for the rest of his or her life. Today, that same person will schedule an ACL repair surgery.
“There’s been a change in our expectations,” Goyer said. “People expect yo continue to live their lives and do what they want to do not matter how old they are. They are willing to go through procedures to make that happen. That also continues to drive up demand for healthcare treatment. And that drives up demand for healthcare real estate.”
At the same time, the United States is home to an aging population that requires more healthcare services. As Goyer says, most people need most of their healthcare services during the last 20 years of their lives.
“Healthcare development continues at a good pace in this market,” Goyer said. “The demographics still support it.”
At the same time, people today are remining renters for longer. We are seeing more people who are renters by choice. Part of that is that multifamily properties have gotten higher-quality amenities as time has gone on. The properties are flashier. These properties provide the kind of lifestyle that a young professional might want, one that might not be achievable when these young professionals are looking at first-time single-family homes for the same price.
Yes, apartments are getting expensive. But they are still a less expensive alternative when compared to the all-in costs of homeownership. As mortgage interest rates have gone up, that has exacerbated that. Many people are holding onto their apartment units for a little bit longer because of the challenging economics of buying a single-family home.
What about affordable multifamily? Is it a struggle for renters to find that in the Detroit market and other Michigan communities?
Krisfalusi: I know that there has been a
push for more workforce housing, properties that offer rents at 80% of the area median income. But a lot of our local building owners have naturally occurring workforce housing properties. These properties were built in the ‘60s, ‘70s and ‘80s. The rents for these older properties are affordable. But the occupancies are lower than in other, newer multifamily properties. So many people don’t want to live in older-style units with brown cabinets and Formica countertops. There is often a slower lease-up on those properties with rents at 80% AMI.
Are there any multifamily product types that are doing an especially good job of attracting tenants?
Krisfalusi: One of the products that is doing really well is the townhome with a garage. They don’t come with a ton of density. but they do offer another housing type that is attractive for people who want to remain renters for longer. These properties are very home-like. Townhomes with attached garages do exceptionally well. They get good rents and are built at a modest cost. That is a product that has gotten stronger the last two or three years.
Does the Detroit market, and the entire state of Michigan, need more multifamily housing to keep up with the demand, much like we’ve seen across the rest of the country?
Krisfalusi: There does need to be more housing. Michigan is still seeing a little bit of a yearly increase in apartment rents, about 2% to 3% a year. We have moved back to a more normal pace of rent growth. We are no longer seeing those crazy rental increases of 6% or 7% a year. But we can certainly use more multifamily units throughout the state.
It’s interesting when you look at what happened during COVID. The workfrom-home movement created a bit of migration. Michigan held onto a lot of people, but we definitely did see some folks move to the Sunbelt. Those areas did get overbuilt with apartments. They are now seeing rent decreases. We are lucky that we have this slowand-steady tortoise of a market. We have new development but it is only trickling in.
When economic times do get tough, we might see more people splitting
rent and living together. Two-bedroom units might do a little better. People are looking to live with roommates to save on rent.
Our occupancy levels, though, are still solid. We can absorb new development without seeing that occupancy rate fall.
Do you expect to see an increase in new multifamily development in Detroit and its surrounding locations this year?
Krisfalusi : Detroit has had a good number of new developments come online. A lot of them were delivered at around the same time. Because of that, it’s a bit harder to fill those developments. Detroit’s multifamily occupancy percentage is somewhere in the high 80s. It takes a little longer to get those stabilized.
We saw that in Grand Rapids about two or three years ago. They were developing a lot. Because of that, owners might have to build in a two-year lease up instead of a12-month or 14-month lease-up. The only reason our occupancy rates in multifamily get below
MULTIFAMILY (continued from page 1)
Photo by Expect Best.
those post-recession rates is oversupply. We don’t have an oversupply of multifamily units right now.
But we do need more supply. We see strong occupancy rates and rents everywhere else. As a lender, we look for 30-, 60- and 90-day delinquencies. We are not seeing any spikes in those. I don’t know how much new supply we will get, but I do think we will see some new building in particularly strong markets.
How is the multifamily sector performing in the suburban areas of your market?
Krisfalusi: The suburban areas are interesting. Many have created these vibrant downtowns with mixed-use developments. The City of Auburn Hills has done this. They are trying to bring in new restaurants and retailers and build a downtown. Those type of developments are very successful, and multifamily buildings in them are usually popular.
Are you seeing more financing requests for multifamily properties today?
Krisfalusi: Yes. We pulled so many maturities forward when rates were low. There was a lull in financing requests. Now there is a big wave of naturally occurring maturing debt coming up. That is giving us a lot of loans to work on.
Everyone did these short-term five-year loans. So we are seeing a compressed maturity schedule. We have also seen more investment sales offerings in the last six months. The momentum is there. The offering memorandums are flying. We are picking up more loan requests for multifamily.
I think we will continue to see stability in the multifamily market. There is not a huge push for messing with 1031s and the tax code. That eliminates some investors’ concerns. Owners know that they can run their properties without the giant overreach of the federal government.
Because of all this, I do expect that we will see an increase in multifamily financing requests.
“Starting with the second quarter of 2024 and carrying over into this year, we have seen an increase in investment sales of multifamily properties. We had a pretty busy back half of 2024 and a busy start to 2025.”
Michael Spero Senior Director Berkadia Kansas City, Missouri
What are some of the reasons for the enduring strength of the multifamily sector in the Kansas City market and across the country?
Michael Spero: If you look at markets in the Midwest, and in Kansas City specifically, this is still an affordable place to live and rent. The markets that I cover are not overbuilt, either. That leads to a steady amount of demand from renters. The multifamily product in our markets is being absorbed. We have an apartment occupancy rate of 95% in the Kansas City metro area. To me, that is full.
For investors, the Midwest markets have become darlings for attracting equity and getting deals put together. There is no shortage of capital from within the United States or even abroad. There are just better opportunities for investors in the Midwest markets.
Why are we seeing so many people choosing renting instead of buying a single-family home?
Spero: There is a lot of uncertainty out there. Mortgage interest rates aren’t where they once were. Those sub-3% rates have gone away. The buying power for first-time home purchases has shrunk with that. There is also a shortage of single-family homes. This is all forcing folks to continue with renting instead of buying owner-occupied housing units.
Considering how strong the demand is for apartment units in your market, does the Kansas City market need more multifamily housing?
Spero: We keep good track of what is happening in the market. We are absorbing the multifamily product that is being delivered. In 2025, we will see an uptick in deliveries over what we’ve seen during the past few years. We are tracking about 5,000 units being added to the market this year. We can certainly benefit from new deliveries. The rent growth is solid here, too. We
have been one of the better performers nationally for rent growth. Considering all that, the addition of new units will be a help here.
What about investment sales? Will we see more of those in the multifamily sector this year?
Spero: There were some twists and turns navigating the economic climate last year. We have some new things to worry about now with where the stock market is. But starting with the second quarter of 2024 and carrying over into this year, we have seen an increase in investment sales of multifamily properties. We had a pretty busy back half of 2024 and a busy start to 2025.
There are some groups with the current uncertainty that are on pause for the moment. They might be giving it 30 days to see where things are at. But we are staying busy with valuations. We anticipate more listings coming our way over the next three months.
We are doing more off-market transactions now. We are dong the most I’ve
Grant Fitzgerald (Photo courtesy of Marcus & Millichap.)
Charles Krisfalusi (Photo courtesy of Walker & Dunlop.)
Michael Spero (Photo courtesy of Berkadia.)
MULTIFAMILY
ever done in my career. We are seeing more owners quietly and directly doing deals off-market. For the right deal and the right seller, these deals are a way to more efficiently navigate market uncertainty. They are looking for certainty of close and surety of execution. They want a no-stress transaction.
What about affordable multifamily housing? Is more of that coming in the Kansas City market?
Spero: The consensus across the United States is that we have a shortage of housing of all types, including affordable. Developers of new housing are looking for more resources such as the low-income housing tax credit, tax abatements and public-private partnerships to make it more feasible to deliver affordable housing. I anticipate ongoing conversations from the federal level down to the local level on ways to help developers deliver additional housing.
It can be challenging to deliver affordable housing. Developers are facing rising labor costs and higher interest rates. A lot of developers in the urban areas looking at concrete-and-steel construction are facing different challenges with the cost to build. They are looking at partnerships and incentives to make deals pencil out.
Governments are starting to want to see a set-aside of some affordable units even in market-rate or higher-end products. That has been more common in coastal markets versus Kansas City. But this is something new for Kansas City developers to face. Developers will explore various options to engineer deals from federal to local resources.
How strong is the multifamily sector in Kansas City’s suburban areas?
Spero: In general, the suburbs are doing very well in Kansas City. Many of the suburbs are creating walkable mixeduse districts, building that live/work/play environment. And these are spread out. They’re not always in just one part of town. We are seeing continued growth in new multifamily development in these pockets.
The Lenexa City Center development in Lenexa, Kansas, is a good example of this. It’s a mixed-use development that includes Class-A office space, single-family and townhome properties, retail and a healthy amount of new apartment deliveries. They’ve added a community center and an aquatics park.
by Jovydas Dobilas.
A good amount of public investment has gone on there.
When it comes to new apartment properties, what amenities are renters looking for today?
Spero: The Class-A new-build space is still in an amenities arms race. You see
simulators, pickleball courts, secure package delivery areas, dog wash stations, higher-end self-serve coffee stations and tech-heavy clubhouses. If they have the ability, they’ll add walking trails on the property. They might have ponds that they stock for fishing. The pool areas will have TVs and lounges, fire pits and bocce courts.
In the urban core, you’ll have rooftop pools staffed with waitstaff and bartenders. At the top-end rent level, you’ll see a decent push for event offerings on weekends. They might have wine tastings or some sort of entertainment with music and DJs.
golf
Photo
Grant Fitzgerald Vice president/regional manager Cleveland and Columbus, Ohio Marcus & Millichap
The multifamily sector has long been a top performer in the CRE industry. Can you go through some of the reasons why demand from renters remains so high for multifamily units?
Grant Fitzgerald: The main reasons are the costs of single-family homes and the lack of single-family housing inventory. Those are interrelated, and together they are creating a lot of renter demand.
There are not enough single-family homes on the market. And the ones that are on the market are unaffordable to many buyers. Add to that the higher interest rates, and that pushes people to rent for a longer period. That is probably the number one driver of the sustained demand for multifamily housing.
Taking a longer-term view, during the last three years inflation has outpaced wage growth significantly. Stagnant wages put a strain on someone saving for a down payment. The cost of saving enough money for a down payment and the cost of monthly mortgage payments for a house keep a lot of people renting. This is more challenging in bigger and more expensive cities. But in and around any city, it can be expensive to buy a home.
Are you seeing any increase in the number of renters by choice?
Fitzgerald: The quality of rental options across many markets has gone up significantly. The quality of the buildings and their amenities have improved. And it’s not just in Class-A buildings. We’re seeing that in Class-B properties, too. During the last 10 or 15 years, we’ve seen an increase in the number of people who are renters by choice. That has helped sustain demand in the multifamily market, too.
Is the number of multifamily units in the Cleveland and Columbus markets too low for demand?
Fitzgerald: There is always going to be a need for more units. Just looking at the country, there are more people looking for housing than we have units for. But Cleveland and Columbus are well balanced. I don’t think there is a huge shortage of multifamily units in those markets. The more housing we build,
“There are not enough single-family homes on the market. And the ones that are on the market are unaffordable to many buyers. Add to that the higher interest rates, and that pushes people to rent for a longer period.”
though, the more affordable it makes housing across the area. That’s just a matter of supply and demand.
Do you think we’ll see any increase in multifamily development this year?
Fitzgerald: Yes. In Columbus, we are projecting about 7,500 new multifamily units this year. That would be a high for Columbus. In Cleveland, we are projecting about 1,800 new units during the year. That’s the most in Cleveland since 2018. It’s good that we are building new units. There’s not a huge shortage of multifamily units in these markets, but anytime you can add new units, it’s a good thing.
Do you expect more investment sales, too, in the multifamily sector this year?
Fitzgerald: I would anticipate seeing some more. We have seen investment sales down year-over-year the last three years in terms of the number of sales. But I think we’ll be up a little bit this year and next year just because of the natural life cycle of deals.
Some buyers have held onto their properties longer than they originally anticipated. Now it is time for them to transact.
What about affordable multifamily housing? Will we see more of that added to your markets?
Fitzgerald: I don’t think we will see a special push for that compared to prior years. But we have been seeing more affordable units in our markets. You can build affordable in two ways, You can build dedicated, purpose-built affordable housing. Or you can build enough housing so that some of the quality stock of apartments becomes affordable on its own.
One of the advantages of markets like Cleveland and Columbus is that they are relatively affordable markets by default. If we build more quality housing, a chunk of the existing housing stock will become more affordable. That might not happen in a more expensive market like Manhattan. You also have the ability in Ohio through renovating existing units, that value-add strategy, to create quality affordable housing.
What amenities are renters looking for from today’s newer apartment properties?
Fitzgerald: The classics are what remain important. Saying that, there is a bit of an arms race to have the coolest amenities and buildings. Still, the classics like in-unit washers and dryers, walk-in closets, quality outdoor space and onsite fitness centers remain the most important amenities. Those classics never go out of style. But there is a push to make buildings as cool as possible. That way, owners can get maximum rents.
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A century of big builds: Chicago’s W.E. O’Neil celebrates 100 years in business
By Dan Rafter, Editor
Building a successful small business is no easy task. And one that lasts a century? That’s especially impressive. And it’s what Chicago’s W.E. O’Neil Construction has done.
William Edward O’Neil founded W.E. O’Neil in 1925. To honor the construction firm’s 100 years in business, Brandon Johnson, mayor of the City of Chicago, presented John Russell, regional president for Chicago and Texas, and other W.E. O’Neil employee-owners with a proclamation declaring 2025 as the 100-year Anniversary of the local firm.
Russell said that he was proud to accept the proclamation on behalf of W.E. O’Neil.
“It was very profound being there in the chambers and witnessing the proclamation,” Russell said. “It was quite an honor.”
It’s no surprise that Chicago issued this proclamation. W.E. O’Neil has played a significant role in shaping the city, working on such key landmarks as The Museum of Contemporary Art, Lane Tech High School, Crown Fountain at Millennium Park and the restoration of The Chicago Theatre.
And what was W.E. O’Neil’s first project? It, too, was an important one, the primate house at Chicago’s Lincoln Park Zoo.
Today, W.E. O’Neil continues to tackle some of the most important projects in Chicago and its suburbs.
The construction firm has worked on projects such as Lincoln Common, Block 37, the University of Chicago’s William Eckhardt Research Center and LondonHouse Hotel.
W.E. O’Neil hasn’t made an impact only with its construction work. The firm and its employees have also supported the community. W.E. O’Neil has been a long-term supporter of organizations such as Habitat for
Humanity, the Greater Chicago Food Depository and Mercy Home for Boys and Girls.
Russell said that W.E. O’Neil has followed a simple formula to reach its success.
“It comes down to our values,” Russell said. “Our retired chairman, Bill O’Neil, always said that his responsibility was to pass down the values that his grandfather, the original William O’Neil, established. Our clients are our greatest allies. Our goal as employees of W.E. O’Neil is to build strong relationships with all our clients. That’s the number one value of this firm.”
Another key factor in the firm’s success? Russell said that the employees at W.E. O’Neil are all committed to learning and evolving as the construction industry changes.
“We are all lifetime learners,” Russell said. “You don’t just have a job here. You have a career. Our job is to develop our employees.”
W.E. O’Neil leadership takes this seriously. The company employes a national vice president who is devoted to training and development for the firm’s employees across the country.
Then there is the focus on quality. Russell said that another goal of W.E. O’Neil leadership and employees is to provide both quality service to clients and to build quality developments.
“Our clients are number one. They are always right,” Russell said. “We deliver whatever their needs require. We also have a commitment to quality construction. If we don’t leave behind a quality product, our work won’t stand the test of time. Our people are com-
mitted to quality workmanship.”
Russell has worked with W.E. O’Neil for three decades. During these years, he’s worked on several key projects. One of his favorites was the Crown Fountain in Millennium Park, a project on which W.E. O’Neil served as general contractor.
Most visitors know this project as the fountain with the squirting faces, two large pillars on which videos of the faces of Chicago residents rotate. When these faces are on the pillars, it looks as if they are spitting water into the pool below.
The fountains are a favorite of residents and visitors to Chicago alike.
“It’s nice to have worked on what has become a true landmark project,” Russell said.
Russell also worked on the Block 37 project, which covers a full city block in the heart of downtown Chicago. This block, bordered by Randolph, State, Washington and Dearborn streets, now includes more than 1.2 million square feet of mixed-use facilities, including a 400,000-squarefoot four-story retail podium atop a 340,000-square-foot four-level below-grade transportation center and parking structure.
“At the time, that was the largest undeveloped project site in the downtown area,” Russell said. “It was a great honor for W.E. O’Neil to serve as the contractor on that project.”
It’s impossible to be in business for 100 years and not face challenges. And the commercial real estate industry is notoriously cyclical, with both booming and sluggish markets. How has W.E. O’Neil worked through the slow cycles?
Russell said that the firm benefits from working in a wide variety of sectors. If construction activity in one sector is lagging, W.E. O’Neil can lean into another segment that is performing better.
In another big project, W.E. O’Neil served as general contractor on the famous Crown Fountain project in Chicago’s Millennium Park.
“Today in Chicago, for example, some of the investor-led development work is waning,” Russell said. “To make up for that, we are leaning into higher-education work and work at the airport. That flexibility helps us when the economy is down.”
The long-term relationships that W.E. O’Neil has built with its clients helps, too.
“Those repeat clients who automatically come back to us have been an important part of our success,” Russell said. “They are not looking for the lowest-dollar contractor. They go with someone they know and trust.”
Another unique feature of W.E. O’Neil, and one that helps the company attract and retain the best talent?
The company is 100% employee owned. Everyone who works at the firm receives stock ownership in the business.
“That is another driver for people to stay committed and with us for a long period,” Russell said.
And what does the future hold for W.E. O’Neil? Russell says that it’s a bright one.
“We have made the milestone of last-
“At DarwinPW Realty, we look at building long term relationships and we achieve this by putting our clients’ interests above all others.
For over 45 years, DarwinPW Realty/ CORFAC International has been a leader in industrial and commercial real estate. The company specializes in brokerage, property management, investment and development services primarily in the Midwest. DarwinPW Realty’s highly qualified professionals are problem solvers and utilize a breadth of tools and knowledge to serve our clients best.
ing 100 years,” he said. “I see no reason why we can’t continue to operate for another 100 years. We are very focused on developing leaders at our
firm. We are always focused on succession planning. We have a pipeline of leaders. The future is bright.”
W.E. O’Neil served as general contractor on the Block 37 development in downtown Chicago.
Jerry Sullivan Principal
Coldwell Banker Commercial’s Dan Spiegel: Momentum is trending in the right direction for commercial real estate industry
By Dan Rafter, Editor
Investors still view commercial real estate in the United States as a top outlet for their investment dollars. At the same time, commercial real estate professionals are optimistic about the state of the industry in the early stages of 2025.
Those are two key takeaways from the 2025 Commercial Real Estate Outlook Report released earlier this year by Coldwell Banker Commercial.
We spoke to Dan Spiegel, senior vice president and managing director of Coldwell Banker, about his company’s outlook report and the state of the commercial real estate industry. He, too, was optimistic about where commercial real estate stands today.
Here is some of what Spiegel had to say about the industry.
The Coldwell Banker Commercial outlook report mentions that leasing activity is improving in smaller office spaces. What is behind this improvement?
Dan Spiegel: There are a couple of things going on. Office leases are long-term commitments. Over the last year, five- or 10-year office leases have been coming up for renewal. Companies are still not entirely sure what is happening with their workforce and how often their employees will come into the office. That is resulting in a higher volume of smaller leases.
At the same time, smaller users like law firms and medical offices didn’t downsize much during the pandemic or after it. They are more willing to commit to longer-term office leases today. They are more likely to renew their space without worrying too much about how many of their employees are going to come to the office. They already know this. A lot of our presence around the country is in secondary and tertiary markets
“They (smaller users like law firms and medical offices ) are more likely to renew their space without worrying too much about how many of their employees are going to come to the office. They already know this.”
where there is more local decision-making from tenants and less corporate-level decision-making.
The report also mentions that leasing activity is stronger, too, in smaller offices in suburban locations. What is behind that?
Spiegel: It really depends on where those suburban offices are. Some suburban offices are seeing stronger leasing activity. Others aren’t. It’s more about the quality of the office space versus whether it is suburban or urban. The flight to quality is real. Companies are deciding that if they are renting space, they might as well rent nicer space.
Companies want to convince their employees to come back to the office. One way to do this is by providing them a higher quality space to work in. That is true in both downtown and suburban locations. The nicer, higher-quality buildings are doing relatively well, both in suburban and downtown locations. But it doesn’t mean that all suburban
Dan Spiegel (Photo courtesy of Coldwell Banker Commercial.)
locations are doing well. It has to do with the quality of the space.
There are some positive signs out there in the office sector. Some older, outdated suburban office properties are being redeveloped. That’s a good sign.
We’ve heard a bit about converting outdated office space to other uses such as multifamily. That can be tricky and expensive, though, right?
Spiegel: There was an initial hope that many office buildings could be used to help solve the crunch we’re seeing for housing. But not all office buildings can be converted into apartments. A 1980s office building in a suburban office park is not a desirable place to live. It doesn’t have the attractiveness of, say, a 1920s or 1930s office building in the middle of downtown. People would like to live in a cool vintage building. There is potential there. But not so much with the basic suburban office properties.
How important are amenities when companies are striving to bring workers back to the office?
Spiegel: Amenities are absolutely important. Tenants and building owners are upping the game in the amenities war. Building owners have to think of the amenities that make a resort so attractive. They need to make their office space attractive enough so that people will want to be there and stay in the building. Amenities have been a driving force for a long time now. They are important if you want to attract and retain tenants.
The Coldwell Banker Commercial report also mentioned that the retail sector, despite some negative headlines, has been resilient since the start of the pandemic. Can you talk about that?
Spiegel: We are at the five-year anniversary of when COVID really took hold here. The hospitality and hotel sectors were all doom and gloom. We were worried about retail, too. But retail has been pretty darn resilient. Well-located, desirable retail centers are in high demand today. It’s the same thing that is true about real estate in general: location, amenities and demographics matter. If a retail center is in the right location, there is leasing demand for it.
That said, there are retailers that will come and go. There are malls that were once very popular that have come and gone. Others, like Old Orchard Mall in Skokie, Illinois, have reinvented themselves.
The demand for grocery-anchored retail remains strong. People want to go out.
Mixed-use retail is seeing a lot of leasing activity, too, right?
Spiegel: Retail centers aren’t strictly retail today. Retail centers include physical therapy, outpatient medical office or a light office use that has some foot traffic. Retail centers are no longer only about selling goods. It’s about services, too. Just look at medical offices. They are a good fit for retail centers because retail centers have abundant parking.
How about experiential retail? Are consumers still interested in that type of retail?
Spiegel: We saw earlier in the COVID recovery that people might not be keen on going back to the office but that they are happy to go out and have fun. That trend has not stopped. Because so many people are working from home they want to get out of the house and do something, be it dining or an experience. But experiential retail is just like all retail: Some will come and go. Things will be desirable and then they will fall out of favor. It is the natural flow of retail and retail uses.
Was there anything in Coldwell Banker Commercial’s forecast that surprised you?
Spiegel: I was surprised at the optimism that people have for 2025. As we approached the end of last year, there was so much uncertainty. That kills momentum in commercial real estate. Once the elections were over, people started making real estate decisions again without hesitation.
Even in unsure economic times, real estate is a hard asset. If there is a threat in the economy, people are
driven to hard assets like commercial real estate. Even given that, I was surprised that people were so optimistic about commercial real estate in 2025. The weather can change quickly, but I view that optimism as positive. It shows that real estate is still desirable.
Commercial real estate is still attractive to investors, right?
Spiegel: Yes. And the United States is always the number one destination for real estate investors. Real estate is the steady asset. Now, not all commercial sectors are performing as well. Industrial was the darling for five years through 2024. It’s not undesirable now, but it has cooled down a bit. Multifamily is now desirable because of the challenges people face in the for-sale housing market. If people can’t afford a down payment or the higher mortgage interest rates of today, and if housing prices are higher, they will keep on renting. That sector remains a bright spot.
Image courtesy of drobotdean on Freepik.
Women’s History Month: Notable Women in CRE
March was Women’s History Month, a time to honor the achievements, resilience and contributions of women throughout history. In recognition of this, REjournals spotlighted six women leaders making an impact in the commercial real estate industry. These trailblazers symbolize the continued efforts of redefining a field that has long been predominantly male-dominated.
Sandya Dandamudi, President, GI Stone
Despite the relatively few cranes dotting the Chicago skyline in 2024, GI Stone President Sandya Dandamudi had a banner year, sourcing/fabricating stone for the Obama Presidential Center; launching the firm’s luxury residential practice, catering to homeowners; completing its first multifamily project in Nashville, where Dandamudi is planning to expand GI Stone operations; and co-founding SAIRE (South Asians in Real Estate), a networking organization for real estate professionals of South Asian descent. In addition, Dandamudi continues her work as vice chair of The DuSable Museum of Black History and Educational Center’s board – one of many philanthropic pursuits.
“When my mother founded GI Stone 30 years ago this year, there was very little diversity on job sites,” Dandamudi said. “Honoring her legacy by providing more opportunities for young women and minorities to work in commercial real estate has changed the face of the industry and given GI Stone a leg up on less diverse firms. It’s been immensely gratifying and good for business.”
Kelly Strusinski, Director of Industrial Design, Baker Barrios Architects
Kelly Strusinski knew she wanted to be an architect since she was in high school and has been very pleased to see how many more women are involved in the field than in previous generations. She noted her graduation class from NewSchool of Architecture & Design in San Diego was essentially half women.
“There is an opportunity to change the perception of industrial spaces and what it means to work in the industry, and I think women are leading this conversation,” said Strusinski. “I’m a big advocate of human-centric design and creating warehouses that promote a healthier environment where employees can thrive.”
Despite the strides made for women in CRE, Strusinski said it is still a challenge for women to receive equal treatment and recognition for their contributions, especially in the male-dominated industrial sector. She noted the mentorship opportunities she has both given and received – through various industry groups such as NAIOP as well as at Baker Barrios Architects – have provided wonderful opportunities to grow as well as help other women succeed.
Jennifer Murphy, President, Management Services, Bradford Allen
property management leader in Chicago, Murphy excels at guiding property operations, leasing and construction management as well as building strong, effective teams capable of navigating even the most uncertain times. Having helmed such office assets as 333 W. Wacker Drive, 101 N. Wacker Drive and Salesforce Tower in Chicago, as well as suburban properties like Takeda Pharmaceuticals’ North American headquarters in Deerfield, Ill., she brought extensive experience with large, complex buildings to Bradford Allen (BA) when she joined the firm in 2023. She now oversees BA’s growing portfolio of office properties in Chicago and nationally as it acquires, improves and leases up assets in high-growth markets. Her leadership is critical to helping BA meet demand for modern, experiential work environments.
“Property managers are being challenged like never before to make the workplace a destination where people
feel a part of a community,” said Murphy.
“Women in CRE are making great strides, and it’s exciting to see the field continue to grow,” she added. “There is a strong community of women supporting each other as we shape the future of the industry.”
Christine
Barry,
Senior Vice President, Commercial Finance Group, Draper and Kramer, Incorporated
When Christine Barry joined Draper and Kramer, Incorporated, 27 years ago as a recent University of Illinois graduate, she thought it would be the first step in her professional path – but she ultimately ended up building her entire career at the firm. From her start as an analyst, she is today a senior vice president and top producer for Draper and Kramer’s Commercial Finance Group, originating debt and equity for all property types across the country
A longtime
Sandya Dandamudi (Photo courtesy of GI Stone.)
Christine Barry (Photo courtesy of Draper and Kramer, Incorporated.)
Kelly Strusinski (Photo courtesy of Baker Barrios Architects.)
Kathy Kwak
Photo courtesy of Proper Title.)
Jennifer Murphy (Photo courtesy of Bradford Allen.)
Kathleen Arnold (Photo courtesy of McHugh Construction.)
and helping clients find the best capital sources for their needs.
“This is a career where you can really control your destiny,” said Barry. “If you work hard, there is no limit to what you can achieve.”
Now as an industry veteran, Christine is passionate about helping other women get their start in CRE. Since 1999 she has been a member of Real Estate Finance Forum (REFF), an organization focused on the advancement of women in real estate finance, holding various board positions including president and currently sitting on the REFF Advisory Board. Additionally, Christine is a member of CREW Chicago, and since 2017 has been a mentor for One Million Degrees, a group helping community college students earn degrees.
Kathy Kwak, Chief Operating Officer, Proper Title
Kathy Kwak, COO of Chicago-based Proper Title, a full-service title insurance agency primarily serving the Midwest, recently launched the firm’s national commercial services division.
“Once you get to a position of leadership, don’t forget how you got there. Remember who supported you and who will stay with you to make you a better leader.”
She has also implemented wire fraud protection procedures for closings and construction escrow services. In recent years, she has recruited top talent and established several new closing locations to serve clients throughout Chicagoland.
“Build a team you can trust,” said Kwak. “Many women in executive leadership have a problem with delegating. I feel the more I delegate, the more space
I have to be creative and innovative. Surround yourself with the support you need to get ahead because you can’t do it alone. Women also shouldn’t be afraid to speak up or shine a light on their success; let people see what women in charge can do. Once you get to a position of leadership, don’t forget how you got there. Remember who supported you and who will stay with you to make you a better leader.”
WOMEN IN CRE
Kathleen Arnold, Project Manager, McHugh Construction
Kathleen Arnold took a gamble on entering the field of construction, and it paid off. Her eyes were opened to the field while working as an admin on the construction of a new casino boat in Indiana. “I sat in on all the construction meetings and took notes,” Arnold said. “After a year or so of that, I thought, ‘I could do this.’ So, I went to school while I worked full time and eventually got my engineering degree.” Chicago-based McHugh Construction saw Arnold’s experience in hospitality construction and hired her in 2013 shortly after she graduated. Her 12 years at McHugh have been in the company’s hospitality and small projects division.
“I really love the variety in construction,” she said. “My office is always changing. It’s been in corners of a parking garage, on top-floor mechanical spaces, and even in building basements and hotel guest rooms.”
New Class A facility near Midway Airport
Breaks
Women in Construction Week 2025: A look at three leaders from Chicago’s Leopardo
Women in Construction Week began March 2 of this year. The goal? To honor those women who are making an impact in the commercial and residential construction industries.
In honor of the contributions that women have made in the world of construction, here are short profiles of three who are making a difference at Chicago-based construction firm Leopardo.
Ali Borrelli, Senior VDC Manager
What is a VDC Manager?
As a VDC manager I coordinate with designers, owners, facility managers, engineers, subcontractors and our internal field and office teams to build a building virtually first. This creates a more efficient, safe and productive project reducing the rework and waste that can occur without sufficient planning.
Using Revit, Trimble, Leica, Navis and many more tools and software programs helps us model future elements and review against existing to have the most accurate preparation to start building in the field.
How do you contribute to the overall success of the project?
Lots of collaboration. The more people we have coordinating issues or roadblocks that we face within the day-to-day construction challenges is the best way to ensure success. My piece of that puzzle is trying to bring all the solutions to the table from multiple entities involved and coming up with the best path moving forward for the project.
The earlier we can get involved in projects and review the potential issues prior to the final set of drawings hitting the field, the greater opportunity we have to come up with better resolutions.
What is a project you were proud to be a part of?
I’d have to say Ravenswood Senior
Living. I am involved in nearly all of our adaptive reuse projects but this one was especially unique due to its scale. It was a 10-story (about 225,000 square feet) renovation of an old healthcare facility into an affordable housing community for seniors. I scoped and coordinated
close to $14 million of building systems.
A lot of the coordination effort was timed to succeed demolition and laser scanning activities. This allowed the team to take advantage of the limited amount of space.
What advice would you offer to someone interested in a career in construction?
Get into the field as much as possible. There is a wealth of knowledge out there and incredible insight on how to build and problem solve. Working in
Ali Borrelli, senior VDC Manager (Photo courtesy of Leopardo.)
Antoinette Adams in the field. (Photo courtesy of Leopardo.)
the field and in a team that wants the project to succeed helps your career in construction grow exponentially.
Antoinette Adams, Project Engineer
What advice would you offer to someone interested in a career in construction?
Do not be shy about asking questions. It is how you learn. As a project engineer, I often work with our subcontractors who are more advanced in their careers. Take advantage of these encounters to learn from highly skilled tradespeople. They are a wealth of knowledge and by showing you value their expertise, you can build a stronger relationship and they will respect you for it.
What is something that surprised you about construction?
Every building has a story. We work a lot in older buildings renovating them for new uses and tenants. One of the manufacturing projects I was a part of was originally developed as a build-to-suit for Sony Corporation. It is now a flagship facility for a global manufacturer of packaging and warehouse automation solutions. It’s fun to see how a building evolves over the years but also still remains.
What is a recent project you were proud to be a part of?
I recently was a part of the project team that completed Downers Grove Civic Center, an 80,900-square-foot new two-story combined village hall and police station. It was so rewarding to see it from start to finish. I was there when we were excavating the site to accommodate the basement level firing range all the way through to opening day when the mayor and other village dignitaries cut the ribbon. I will feel pride each time I take the Metra and see it from the window!
How are you paying it forward?
I intend to build up others’ voices as I progress in my career. I like to give back as well – applying the skills I’ve learned on the jobsite. This will be my third year participating in Habitat for Humanity Women Build. It’s such a great event that brings together inspiring women for a day of volunteer work.
WOMEN IN CONSTRUCTION
“We manage all the details from start to finish, with all parties involved, making sure everyone comes together - coordinating with clients, the design team, subcontractors and other stakeholders.”
Camille Trausch, Senior Project Manager
How does a project manager contribute to the team’s success?
We manage all the details from start to finish, with all parties involved, making sure everyone comes together - coordinating with clients, the design team, subcontractors and other stakeholders. We also work with the superintendent on the schedule and oversee the budget
What is a recent project you were proud to be a part of?
I oversaw Leopardo’s renovation of Bartlett Fire Protection District Station No. 1. I’m really proud of the work
we did, which earned a Firehouse Magazine Station Design Gold Award. 845 Design Group - a WBE - was our architect partner and together we were able to successfully transform the fire station into a modern facility with a state-of-the-art admin center.
Why was this project so challenging?
We were combining three generations of buildings, so that involves tying in a lot of different materials, construction styles and systems. The façade update was the most logistically challenging component. It had a lot of important details we needed to get right.
We also needed to take extra care not to damage existing equipment – like
the district’s emergency response infrastructure - during renovation. Firehouses are second homes to the firefighters. We wanted to make sure they are happy with the finished product for years to come.
What advice would you offer to someone interested in a career in construction?
Practice active listening. You don’t have to be the loudest voice in the room. Listening is just as powerful a skill as speaking. By listening with intention, you can better understand where everyone is coming from and find a solution that’s a win-win for all parties. Project management is just as much about people management as it is about construction.
Camille Trausch during a training session. (Photo courtesy of Leopardo.)
Will the great uncertainty accelerate or derail the great reset?
By John Barkidjija, Head of Commercial Real Estate, Byline Bank
In June 2024, I authored an article titled “Reset Ready: Navigating the Great Reset in commercial real estate.” At the time, I argued that years of persistently low interest rates and corresponding cap rates had resulted in many commercial real estate properties being over-levered. Additionally, increasing operating costs—such as insurance, real estate taxes, personnel expenses, and maintenance—were outpacing rent growth in many cases, further diminishing property values. This new math of CRE valuations and leverage, combined with the end of “extend and pretend” loan modifications and a wave of loan maturities, signaled an inevitable market correction – termed the Great Reset.
Since then, there has been more interest rate volatility than the markets were predicting. In late summer 2024, long-term rates decreased, causing a bump in transaction activity as owners locked in rates or sold properties while the 10-year Treasury fell from the mid 4% range to the high 3% range. Because CRE transactions normally take 45 to 90 days to close, these deals materialized in the last quarter of 2024. The increase in transaction activity and refinancings was an early indication of the Great Reset’s beginning.
Then a strange thing happened in the bond markets. The Federal Reserve decreased short-term rates, yet long-term rates climbed sharply. Market expectations of a new administration in Washington that would be generally more business friendly, the possibility of future inflationary pressures from tariffs, and a stricter immigration policy contributed to this volatility.
Following the election, there was optimism in the markets as investors anticipated the tailwinds to the economy of lower regulations and lower or at least stable income taxes. The stock market rallied, credit spreads on all asset types (including all forms of commercial
real estate loans) decreased by 25-50 bp as liquidity returned to the market. Banks, life companies, debt funds and other forms of private credit and CMBS lenders all increased allocations for 2025. Since it takes 45-90 days from inception to close a loan, these new spreads and underwriting factors appeared in early 2025 closings. For example, according to Trepp, CMBS issuance is now outpacing last year’s levels, with debt yields on approximately $6 billion in office-backed loans averaging 10% (compared to 13.4% on the approximately $8 billion issued in all of 2024). Although these bullish statistics may be skewed by large trophy-office financings, the trend reinforced momentum in CRE transactions and sustained the Great Reset.
Yet, the initial optimism surrounding the new administration has tempered and even reversed. The repeated announcement, postponement, and modification of tariffs on key trading partners and allies have caused uncertainty and trepidation for consumers and businesses alike. Companies thrive on predictability, and the constant change in announced policies has influenced business’s ability to plan, causing a delay in investment decision making. At the same time, consumers have come to realize that tariffs are consumer taxes that will raise prices. The latest University of Michigan Consumer Sentiment Index took a
nosedive by 11% in mid-March from the previous month to 57.9, reflecting growing concerns. Meanwhile, the new administration has followed through on their immigration crackdown, causing businesses that rely on immigrant labor to be concerned about their workforce, and a decrease in demand. Finally, the rapid, blunt attempts to make the government more efficient also causes uncertainty about the ability of the government to function and administer government programs. Publicly traded companies are lowering their forecasts for earnings as the year progresses due to this uncertainty and the effect on consumers’ ability and desire to continue to spend. All of this creates a Great Uncertainty.
The stock markets reacted swiftly to this uncertainty, with S&P 500 falling roughly 10% from its recent highs. The 10-year Treasury yield fell more than 50 basis points on recession fears before stabilizing around 4.3%. Future markets now predict that the rate will be stable for the remainder of 2025, as recession risks and higher prices caused by tariff-driven inflationary pressures counterbalance each other.
What does this mean for CRE and the Great Reset? On one hand, uncertainty typically drives up risk premiums for CRE assets, including an increase in credit spreads. If economic growth slows and unemployment increases, landlords may struggle to raise rents, and vacancy rates could climb across all asset classes. There may also be an increase in operating costs, especially for major operating costs like real estate taxes, insurance and repairs and maintenance. If longterm yields stabilize at 4.3%, and cap rates increase due to increased risk premiums, property values will decline, slowing transaction activity as lenders and owners seek clarity before making decisions, thereby slowing the pace of the Great Reset.
On the other hand, the Great Uncertainty, combined with increased
supply in certain markets—notably multifamily in the South and industrial in low-barrier-to-entry markets—could create buying opportunities for the many distress funds that have been raised to take advantage of the Great Reset. This will only occur, however, if lenders force owners that are over-levered to finally market the properties for sale and accept the destruction in equity caused by the Great Reset. These new buyers, and the lenders that support them, will be acquiring properties at a lower reset basis positioning themselves for future gains.
In addition, there may be less supply in the future. Construction costs have already increased dramatically over the past few years, and tariffs and deportations of construction workers, which will only exacerbate the already existing construction labor shortage, add to these inflated construction costs, making development harder to pencil. These challenges, along with the Great Uncertainty, will ensure that there is very little new supply in 2026 and 2027.
The investors that have the fortitude to buy properties at a lower basis at this time (and the lenders that support them) will survive the Great Uncertainty and ultimately thrive. In the post-Great Uncertainty world, the excess supply will be absorbed (and little new supply will be added), rents will increase, and credit markets will be stable, benefitting those who capitalized on the Great Reset.
The above material has been provided for informational purposes only, and should not be relied on for tax, legal, or accounting advice. You should consult with your own tax, legal, and accounting advisors in addressing any of the above information.
John Barkidjija, is Head of Commercial Real Estate in the Chicago office of Byline Bank.
John Barkidjija (Photo courtesy of Byline Bank.)
Top five investment trends in healthcare real estate
By Jeff Behm, Bremner Healthcare Real Estate
Over the last several years, healthcare real estate has arguably been the preferred asset classes for real estate investors. As a broker and advisor for health systems and investors, I’ve observed several trends that are shaping the industry’s trajectory.
1. Investment sales volume expected to increase in 2025
After record-low activity in 2023, investment sale volume increased slightly in 2024 as interest rate and cap rates stabilized, with core-plus and value-add profiles being the most active. As investors diversify away from the less-favored sectors like traditional office, many have pursued healthcare real estate opportunities given its population and demographic tailwinds and less-cyclical nature. This also holds true for foreign investors.
This influx of investment capital, combined with pricing stability, should serve to reduce the bid-ask gap and allow for meaningful price discovery and increase transaction volume in 2025.
2. Cap rates are converging among product types
After significant expansion in 2022 and 2023, cap rate volatility moderated in
2024. According to CBRE, the average MOB cap rate increased about 20 bps from 6.9% to 7.1%. Most investors expect cap rates to remain flat or slightly decline during 2025.
More interesting though, is the declining spread between cap rates for traditional MOBs versus more specialized products like ASCs, FSEDs, Micro-Hospitals and IRFs. A couple years ago, the typical premium was 100 bps or more, but today, the spread has narrowed to 25 - 75 bps as investors become more comfortable with these specialized facilities. As health systems move closer to their patient bases, demand for these facilities increases, creating a more competitive investment environment.
For health systems, this means paying less rent for specialized facilities than
before. However, it is crucial that these facilities fi t into a system’s broader network strategy and that they are run by proven operators.
3. Pace of sale lease-back activity is picking up
Health systems are facing unprecedented capital requirements with aging infrastructure as well as growth-related pressures to add, expand and/or relocate facilities to remain competitive. Exacerbating these capital needs is the higher-for-longer interest rate environment that reduces operating margins and cash positions.
To raise capital, many are turning to sale-leasebacks. This approach provides immediate liquidity, allowing them to reduce debt, modernize/ build new facilities or reinvest in core operations.
We are seeing rising interest in sale-leasebacks from both health systems and physician groups. Physician practices are leveraging these transactions to facilitate ownership transitions, like when younger doctors buy out retiring partners who own the real estate where the practice is located.
Also, sellers can often retain a mi -
nority interest in the property, preserving their tax advantages while at the same time realizing a return on their investment. These transactions are attractive to investors who value the mission-critical nature of the real estate and the alignment of interests between the physicians and the property owner.
4. Elevated costs of construction allow for selective redevelopment or adaptive reuse
It’s well documented that replacement costs have skyrocketed since 2022, in many cases making new facilities cost-prohibitive. While the pace of escalations did moderate in 2024, construction costs are not expected to decline. Construction starts hit an all-time low in Q4 2024, and MOB occupancy increased to a five-yr high, according to JLL.
In fl ated construction costs and limited availability of purpose-built healthcare space has generated signi fi cant interest in adaptive re-use. That said, fi nding existing properties with the right attributes in terms of location, parking, ceiling heights and mechanical infrastructure is no easy task. We have found that retail buildings are more conducive for redevelopment than traditional office buildings given their locational, access and parking attributes. The re-purposing of closed pharmacy locations for clinical use is a great example of this.
In some cases, healthcare tenants and existing building owners can upgrade and renovate their existing spaces to be comparable to newer products at rents well below that for new construction.
5. Portfolio transactions and portfolio premiums may return
In recent years, smaller deals have been more prevalent because of debt unavailability, tougher underwriting standards and general reluctance to make big bets in an uncertain capital markets environment. Now, with a
more stable lending environment, larger deals are getting more traction.
The increased interest in healthcare assets from foreign investors is another factor allowing larger and portfolio deals to get done. Traditionally focused on office, where investments
are signi fi cantly larger than the average MOB, many foreign investors are seeking portfolios so they can enter the market with scale.
While general economic, regulatory and geopolitical uncertainty exists in 2025, the pieces are there for deal sizes to grow and portfolio premiums to be realized at some point in the not-so-distant future. As this occurs, the activity will likely trickle down as smaller developers and investors quickly formulate aggregation strategies.
Conclusion
The healthcare real estate landscape is evolving, creating opportunities for both investors and health systems. With cap-rate spreads narrowing, sale-leaseback transactions increasing, new construction costs elevated and portfolio premiums on the horizon, strategic investment decisions are more critical than ever. Health systems can leverage these shifts to optimize their real estate portfolios and secure much-needed capital for expansion and modernization. Likewise, investors who recognize these trends and act now will be well-positioned for long-term success.
As the senior vice president of investments at Indianapolis-based Bremner Healthcare Real Estate, Jeff Behm is responsible for the firm’s acquisitions, capital markets and joint ventures. Over the past 10 years, he has led acquisitions and disposition transactions totaling $10 billion, consisting of industrial, medical office, suburban office and retail assets.
Jeff Behm (Photo courtesy of Bremner Healthcare Real Estate.)
Developers and builders seek infill sites for premium multifamily development
By Todd Szymczak, Farbman Group
Michigan’s strongest residential markets are dealing with a shortage of viable multifamily building sites. While there is a rising demand for quality living spaces, the challenge for developers is the cost and limited availability of sites in markets that support rents needed to fund the cost of new development.
Developers are forced to think creatively about how to build and what
other alternative opportunities exist. While there is a chance to develop raw land far away from urban centers, the rents in those locations often do not support the cost of new construction.
This challenge has driven developers to explore infill development, where they identify and secure underutilized land within established urban areas. This approach isn’t without its own set of challenges. Navigating municipal approvals, rezoning
processes, and engineering considerations are a few of the hurdles, but despite that, it is essential in addressing Michigan’s multifamily housing shortage.
Driving the Demand
One of the main factors that is driving the demand is the aging Baby Boomer generation. While many in this group are not ready for senior housing, many of them are also eager to downsize. They have no interest in transitioning
from comfortable suburban homes to outdated, subpar housing. Instead, they want modern, high-quality residences that offer care-free living and is convenient to their community (or their adult children’s community).
Historically, the Detroit metro area and Michigan have lacked these types of options for empty-nesters and late-career professionals who may be looking to simplify their lifestyles and space. Over the past five years, there has been an increase in developments
Image by freepik
“Despite the challenges that may exist, Michigan’s demand for multifamily housing remains strong. For creative developers who understand market dynamics, who can secure quality locations, and navigate regulatory hurdles and engineering difficulties successfully, there are exciting opportunities in infill locations to meet Michigan’s growing need for high-quality housing. ”
that appeal to a wider demographic than just recent college graduates. In the suburbs, we see properties with larger units, elevators, garages and fitness centers that are as appealing as off-site gyms. Proximity to major highways, transit options, and walkable amenities—such as dining or parks— improves the location’s marketability.
The appeal of developing new properties, rather than renovating older ones, lies in the ability to meet modern renter expectations for class A apartments. Older buildings often have structural limitations that make upgrades to contemporary standards difficult.
Finding the Right Location
Identifying the right infill sites requires knowing the area and the specific dynamics that are at play in each location. In Michigan, communities with top-rated school systems, strong transportation access, and employment opportunities tend to command the highest rents and support new development. Locations such as Birmingham, Troy, Rochester Hills, Northville and Ann Arbor are prime locations. The best school districts attract more renters and support premium rents
Even for empty nesters, proximity to excellent schools is appealing because these are often the communities where their children and grandchildren are living. The top school systems will always be able to get top rents. For instance, developments in Lake Orion and Rochester Hills are thriving due to their proximity to high-performing schools and desirable community
amenities. Moceri is developing highend apartments on Lake Orion that will likely most appeal to empty-nesters ready to enjoy lake living without the added maintenance that usually comes with such a treasured amenity.
Areas with employment opportunities that are near corporate hubs and airports, healthcare facilities such as hospitals or educational institutions, also tend to offer steady demand for class A rental housing. A good example of a Michigan market that combine those assets is Royal Oak.
Other growth markets, like Shelby Township or the suburbs of Grand Rapids on the west side of the state offer more affordable land and room for growth. However, those markets may see a greater challenge in getting development to pencil out with rising construction costs with achievable rents below those in prime suburban/urban locations.
Overcoming Challenges
Securing the land is only the first step. There are many different issues after that step such as municipal approvals, zoning regulations, and engineering considerations. One of the biggest hurdles is overcoming community resistance to higher-density developments, or the “Not In My Backyard” mindset. Developers that address residents’ concerns up front will have more likelihood of success. Anticipating their concerns and addressing them as best possible with design and communications will increase the chances for approval.
In suburban settings like Shelby Township, lower-density build-for-rent communities for example, aren’t getting a ton of pushback from residents because they are low and spread out. Projects in urban areas such as Birmingham, Michigan, however, often require demolishing existing structures, and bring much higher density (and traffic) that concerns current residents.
Community leaders that are willing to support new development are needed for the long-term success of their community. New development brings new residents and tax base to a community to support roads, schools and aging infrastructure. It’s often easier to say no to new developments, but that is a short-sighted position to take. The best communities offer a wide range of housing sizes and options that will allow residents to get started in a community and stay throughout different phases of life as their housing needs change.
That said, infill sites often come with unique engineering challenges. For example, former industrial or municipal sites often require environmental remediation, known as brownfield development. Assessing these sites and controlling water management, soil conditions, and infrastructure connections is key. While these complexities can increase development costs, the potential for high returns for creative developers in well-located areas makes the effort worthwhile.
A successful example of this is the Legacy Rochester Hills project, which transformed a former landfill into a vibrant apartment community with the support of state-funded cleanup initiatives (final costs are estimated to be $15MM, partially funded with Brownfield tax credits).
Despite the challenges that may exist, Michigan’s demand for multifamily housing remains strong. For creative developers who understand market dynamics, who can secure quality locations, and navigate regulatory hurdles and engineering difficulties successfully, there are exciting opportunities in infill locations to meet Michigan’s growing need for high-quality housing.
Todd Szymczak is executive vice president of Investment Property Sales for Michigan-based full service commercial real estate firm, Farbman Group. To connect with Todd directly, email szymczak@farbman.com.
Todd Szymczak (Photo courtesy of Farbman Group.)
Making room for industrial infill:
Finding ways to maximize existing urban infrastructure supports sustainable growth
By Mike Robinson and Jim Caesar, Opus
With a steady march of employees returning to downtown and suburban offices nationwide, it’s an important time to take a closer look at the upside of infill development. As existing offices are slowly filling up again with workers and/or being converted to other uses, industrial redevelopment will be an important part of this complex urban revitalization plan to prevent sprawl, increase access to existing infrastructure and boost vital property tax revenue just when our urban cores need it the most.
However, as with all property develop-
ment, it takes bold vision and collaboration to backfill these unique parcels scattered throughout our metro areas. And in addition to housing, retail or office, industrial spec and build-to-suit developments are a great solution for the potential of urban infill, especially in major cities with little room to expand, like Chicago and its urban suburbs.
A variety of market and economic conditions are driving this growing interest in urban infill. Buyer demand is also very strong in these core areas, showing that infill properties are poised to outperform properties outside of infill areas.
According to BKM Capital Partners, “regardless of how U.S. economic growth and industrial tenant demand perform in 2025, the ongoing scarcity of smaller [urban] industrial space is likely to persist throughout the year and beyond.”
In fact, BKM states that the 23 million square feet of small industrial space currently under construction across the country represents less than 0.3% of the existing stock of industrial property nationwide.
It’s easy to see why. Infill automatically appeals to a larger pool of tenants given its strategic position at the core of vibrant metro areas. Furthermore, industrial infill can support a commu-
nity’s larger revitalization goals and a desire to offer more quality buildings for discerning businesses looking for greater metro-area access.
Hurdles to overcome
Despite the rising demand, developers and communities need to be prepared to navigate some of the common challenges seen with infill.
Potential industrial development sites in metro areas often face rezoning pressures as cities also see the value in other uses for the space, including retail, office and housing. Community pressure based on perceived value of
Alsip Park 294 from Opus represents 360,000 total square feet of sustainably designed industrial infill space suited for warehouse, logistics and manufacturing users. The development, a joint venture with Principal Asset Management, supports the local economy through new jobs and an expanded tax base. (Photo courtesy of Opus.)
one building use type over another can quickly derail any plans for industrial applications.
Concerns regarding noise, lighting, traffic and hours of operation need to be addressed with most industrial developments, ensuring the neighborhood will not be disrupted.
Given these prime locations and their correlating higher land costs, along with the complexities of infill work pushing project costs higher, developers need higher rents for project feasibility. Getting these top of market rents requires the building’s features to be at the top of the market to make sure the final product that’s delivered is appealing to users. That, combined with what can be a lengthy approval process to achieve the required zoning for the development, and with the overall community sensitivities, create many challenges that most infill project teams need to be prepared for.
Collaboration is key
Developers can mitigate most of the concerns through strong community engagement and collaboration with city officials. Applying sustainable building practices, conducting proactive noise, lighting and traffic studies, and enhancing the overall area through improved landscaping, storm water drainage and better traffic flow will not only solve immediate building concerns, but deliver upgrades to the local area for challenges that may have existed for decades.
More importantly, successful infill project work begins with early and transparent collaboration with the city. As these projects are often integrated with a community’s long-term economic development and revitalization plan, understanding and sharing a common vision for how infill can help achieve those objectives is key. The more involved and receptive the municipality is with the development plan, the more support developers will foster throughout the entire development process.
Sizing up the potential
Regardless of the challenges infill often presents, community leaders and businesses are getting behind it in a big way, ready to partner with creative and capable developers to find viable solutions for backfill development.
The benefits of infill are too significant to ignore. It starts with the economic
“Regardless of the challenges infill often presents, community leaders and businesses are getting behind it in a big way, ready to partner with creative and capable developers to find viable solutions for backfill development. ”
boost these developments provide. From job creation, significant real estate tax revenue and supporting area businesses like shops, entertainment and residential, infill has the potential to serve as a key piece to neighborhood vibrancy and wholeness.
On top of that, as brownfield spaces are redeveloped, the community at large benefits from the positive environmental impact the associated remediations deliver. From cleaning up contaminated sites to flood mitigation through better stormwater management systems to greener landscapes, good design can quickly fill in blighted or unproductive gaps in urban areas with attractive and productive parcels.
This was the case for Opus and its Alsip Park 294 infill project. The city was eager to partner on an industrial solution, and it provided a tax incentive as well as an
building operators can go more vertical than before doing more within a smaller footprint and thus requiring less land. Density of racking through robotics, automated cranes and other high-tech material tracking methods create a more efficient use of space as well.
These advanced industrial storage solutions, now pushing building clear heights to 32 - 40-feet typically (and sometimes higher), are prime for the infill market as they unlock more urban and smaller sites to be utilized, which may have previously not been an option for users.
As this trend continues, we’ll see even greater need for narrower yet higher industrial space which are closer in proximity to end users and consumers. This allows businesses to cut their transportation costs considerably as their logistics operations can now sit just blocks away from retailers and customers instead of miles.
Still, no matter how functional and well positioned an infill building is, partnering with a well-educated broker is vital to the ultimate success of the project. Partnering with a broker who truly understands the users and their challenges will help all involved achieve their real estate goals.
enterprise zone sales tax abatement to help off-set some of the costs associated with the unique challenges of the site. The 360,000 square foot industrial development located just over 20 miles from downtown Chicago, filled a void for the area with not only Class A industrial warehouse space, but remedied a variety of previous challenges with better traffic flow, clearing debris and offering a long-term ground water drainage solution that was plaguing the area.
What’s next for infill
The rapid growth of e-commerce business and the more recent advancements in material handling and automation practices have allowed logistics and storage to soar in industrial properties.
Traditional buildings with shorter clear heights are becoming obsolete as
Given the various capabilities and expertise needed to maximize the potential of these infill industrial buildings, we’re going to see developers with a track record of comprehensive design-build offerings leading the way. Crafting a building to suit the site, through a maze of complex design and engineering needs, coupled with the ability to partner closely with city and governmental agencies, will be required.
Industrial infill, while gaining serious momentum in recent times, is proving to be a smart and sustainable commercial real estate solution as businesses continue to find new, more efficient ways to meet their operating needs.
Jim Caesar is Regional Vice President of Construction for Opus, where he manages the design-build construction operations for the Chicago market, including Michigan and Wisconsin.
Mike Robinson is Vice President of Real Estate Development for Opus, where he identifies, secures and develops projects in Chicago, southeast Wisconsin, northwest Indiana and Michigan.
Jim Caesar (Photo courtesy of Opus.)
Mike Robinson (Photo courtesy of Opus.)
The Promise and Peril of Using Artificial Intelligence in Communications
By Michelle Pittman, Executive Consultant, Akrete
Like any new technology, ChatGPT and other generative AI models can be divisive.
Some people see only the negatives, while others are ready to throw all their energy behind the promise of effortless work.
In one memorable conversation, an AI proponent told me he would use ChatGPT to write questions for a panel, then transcribe the conversation, and finally, turn the whole discussion into an auto-generated thought leadership piece to promote his involvement and the thinking of his fellow panelists. He estimated the tool could save him hours—maybe even days—of research, contemplative thinking, note-taking, outlining and writing.
But the piece never materialized. Whether there was a hiccup in the recording or disinterest in the final product, we’ll never know. But the story drives home an important lesson: Like any other tool, AI needs a skilled artisan to turn the rough material into a finished product.
Creative jumpstarts, not creative control
Getting the most from AI requires an investment—in hours spent finding the right tool, fine-tuning prompts, training your AI to deliver the kind of results you want, and paying for advanced models with better conversation tracking and memory.
Yet despite this lift, it’s hard to argue with AI’s speed and efficiency, especially when dealing with daily, repetitive work. Meeting minutes can now be generated in an instant, with action items called out for all participants. Want to look back on past conversations and come up with recurring topics? You can do that, both at the user and organizational level, depending on your set up. Need a search engine optimized headline in a hurry? AI can make it happen—or at least give you a starting point.
Many communicators have found significant benefit using AI tools to
“With a few guidelines, those who want to harness the power of AI for their communications work can do so.”
get past the blank page. AI as a brainstorming partner, outline creator, and image generator can be helpful, but it requires the right approach. Think: an expert picking out the perfect tool, not a student seeking guidance from the master.
There is a real threat inherent to outsourcing the creative process and deep thinking to AI, which consistently produces muddled results and can get communicators and others out of the habit of drawing their own conclusions. The downsides of AI writing are so evident, even ChatGPT isn’t afraid to name them: repetitive, formulaic sentences; lack of emotional intelligence; lack of cultural understanding and sensitivity. Not to mention, the list includes inaccurate information, inherent bias, issues related to data privacy and significant environmental concerns—all of which can have severe consequences for brands who are otherwise on the cutting edge of corporate responsibility.
The real threats may be more esoteric yet. Public relations, specifically, is about creating mutually beneficial relationships between organizations and their publics. If thought leadership is being driven by AI, where’s the value? Does the reader need the organization at all if ChatGPT or Gemini or Jasper can serve up approximate thought leadership without the hassle of tying it to an organization and whatever value add they’re trying to provide? At the very least, don’t try to use AI to secure media placements: today’s editors know the difference between an AI-generated media pitch and a genuine email with a useful and original suggestion relevant to their needs.
Fully AI-generated content that engages and informs readers hasn’t arrived just yet. While certain models can turn a good phrase—because AI has the benefit of being built on the greatest writing the world has ever read—that’s not the same benefit as original thought and new perspectives.
How to use AI without losing your work’s soul
With a few guidelines, those who want to harness the power of AI for their communications work can do so, while sidestepping some of the thornier issues. We don’t recommend using AI to write articles for publication—but we do recommend it as a set of tools for efficiency and for getting out of the gate. Here are some guidelines:
Use the right tool for the job. While ChatGPT has become the catch-all for generative AI, other models exist—
and they all have different strengths. Match your work with the right tool to get the best outcomes, with the least amount of downside.
Be honest about where AI appears in your work. AI is learning every moment of the day, making it less detectable by the second. When you use AI to generate writing or photos, it’s best to be upfront about that. In general, we advise not trying to pass off AI creations as your own finished work.
Don’t aim for perfection. One of the biggest giveaways for AI work is an overly smooth, polished and perfected final product. Turns out, human beings like imperfections. There’s a time for a perfectly Autotuned pop song and time for a singer-songwriter straining to reach the next note. When working on new ideas and solutions, err on the side of imperfect, featuring your own experience and genius.
Stay up to date. Most casual users don’t need to devote hours to learning about every AI update that comes along. Get used to using AI models before you need them. Focus on specific use cases that save time and energy, not just the latest buzz from tech enthusiasts. Spend a few minutes each week reading industry news about how others are using AI and see how you can adapt it to your own work.
Like most technological advancements, AI is neither all good or all bad, and it’s unlikely to go away. By using AI tools to improve our communications efforts, we can get more of the good, while sidestepping most of the bad. All it takes is a curious mind and a little practice.
Michelle Pittman is an Executive Consultant with Akrete, an award-winning, national public relations firm. Headquartered in Chicago, Akrete works with clients in commercial real estate and financial services, as well as with thought leaders and corporations in multiple B2B industries.
Michelle Pittman
The new face of law offices: Designing spaces that work for hybrid professionals
By Jon Leach, Director, Business Development, Tangram Interiors
The legal industry is undergoing a physical evolution—not just in how law is practiced but also in how firms design their work environments.
The days of rigid, hierarchical office spaces are giving way to flexible, inclusive, and wellness-focused environments that support the evolving needs of legal professionals and their clients.
Modern law firms must now accommodate a diverse range of work styles, from deep-focus research and private client consultations to collaborative strategy sessions and virtual court appearances.
The challenge is to create a workspace that fosters productivity, enhances well-being, and strengthens firm culture while maintaining the gravitas and professionalism expected in the industry.
So, how are U.S. law firms adapting? Let’s take a closer look.
The New Role of the Law Office
As the nature of legal work continues to evolve, so does the physical office’s role.
Traditional office layouts are being replaced with dynamic spaces that prioritize comfort, accessibility, and efficiency. Additionally, hybrid-ready environments now integrate stateof-the-art virtual courtrooms for remote hearings, while flexible workspaces allow legal professionals to choose how and where they work best.
Current estimates shared by Globest state that only 11% of law firms do not support hybrid work, now or in the future. Most are sticking to some sort of hybrid arrangement, and at least 83% of the biggest law firms (and 73% of the smaller ones) would prefer more in-office working coupled with flexible scheduling.
Aside from legal workspaces, reception areas are also shifting towards hospitality-driven spaces, creating a welcoming and professional first impression for clients. Law firms want in-person visitors to feel at ease and supported, the moment they walk in the door.
Designing Law Offices for Well-Being
The legal profession is known for its famously high-pressure environment. Many ex-lawyers have resigned due to the “soul-sucking” elements of their job, characterized by long hours, huge workloads, and high-stress levels (Reuters).
However, things are changing. Today’s law firms are increasingly focused on turning their physical offic -
es into places that support wellness and bring chronic stress levels down.
Features such as biophilic elements (like natural light and greenery) have the potential to help reduce stress and improve focus. Some firms are even opting for relaxing spaces such as private wellness rooms, alongside ergonomic workstations with sitstand desks and optimized acoustics.
All in all, modern law firm layouts blend traditional offices with open, collaborative spaces. Flexible furniture, technology integration, and quiet zones create an environment that adapts to the varied demands of a legal practice.
Inclusion & Accessibility in Law Firm Designs
Diversity, equity, and inclusion (DEI) initiatives extend beyond hiring practices—and modern law firms are rethinking their office layouts to make sure all employees and clients feel comfortable and valued.
Universal design principles incorporate accessible meeting spaces, while digital collaboration tools allow remote and in-person teams to work together seamlessly. Private, inclusive spaces such as gender-neutral restrooms acknowledge the diverse needs of legal teams and clients.
Furthermore, many law firms are
taking great steps to improve their facilities for disabled clients and team members. According to The Association of Legal Administrators, focusing on digital accessibility within physical spaces is one of the best ways to give everyone optimal access to successfully do their jobs.
More tangible modifications include changes such as wider doorways, adjustable desks, and wheelchair-accessible conference rooms to ensure inclusivity for all.
The Office as a Reflection of Firm Culture
Lastly, a law firm’s physical space makes a powerful statement about its values and vision. By designing offices that are adaptable, welcoming, and people-centric, firms can strengthen their brand identity, enhance talent recruitment and retention, and improve client satisfaction through intentional, hospitality-driven spaces.
A thoughtfully designed office isn’t just a workspace—it’s a daily reminder of the firm’s identity, making both clients and team members feel valued, inspired, and right at home.
The Future of Legal Workspaces
The legal industry’s reinvestment in physical workspaces signals a deeper understanding of the role the environment plays in business success. By crafting offices that balance tradition with modern needs, law firms can position themselves as not only relevant but visionary.
At Tangram Interiors, we believe workspace design should evolve alongside the people who use it. Our goal is to create offices that don’t just meet today’s needs but anticipate the demands of tomorrow’s legal professionals.
Jon Leach is director of business development at Tangram Interiors.
Jon Leach (Photo courtesy of Tangram Interiors.)
Image by katemangostar on Freepik
COMMERCIAL SERVICES
ATTORNEYS
REINHART BOERNER VAN DEUREN S.C
1000 N Water Street, Suite 1700 Milwaukee, WI 53202
P: 414.298.1000
Website: reinhartlaw.com
Key Contact: Joseph Shumow, Shareholder, jshumow@reinhartlaw.com
Services Provided: Reinhart is a full-service, business-oriented law firm that delivers innovative, value-added solutions for today’s most important real estate needs, including land use and zoning; tax-incremental financing; tax credits; leasing; construction; and condemnation and eminent domain issues.
Company Profile: With the largest real estate practice in Wisconsin and offices throughout the Midwest and across the country, Reinhart’s attorneys offer clients customized real estate insight rooted in broad knowledge and deep experience to help you capitalize on opportunities no matter where you do business.
SARNOFF PROPERTY TAX
100 N. LaSalle St., 10th Floor Chicago, IL 60602
P: 312.782.8310
Website: sarnoffpropertytax.com
Key Contact: James Sarnoff, jsarnoff@sarnoffpropertytax.com P: 312.448.5337
Services Provided: Since 1986, Sarnoff Property Tax has been a leading and recognized law firm concentrating solely in the field of property taxation. We help client’s secure favorable taxes in Illinois through property tax appeals, incentives and consulting. Company Profile: Sarnoff Property Tax’s clients include Owners, Developers, Managers, REIT’s, Fortune 500 Companies, Private Equity Firms, etc., in connection with commercial property, high-rise and low-rise apartment buildings, condominium associations and singlefamily home portfolios.
BROKERAGE FIRMS
AREA REAL ESTATE ADVISORS
4800 Main Street, Suite 400 Kansas City, MO 64112
P: 816.895.4800
Website: openarea.com
Key Contacts: Tim SchafferFounder & President (tschaffer@openarea.com)
Matt Vaupell- Managing Partner (mvaupell@openarea.com)
Services Provided: Office, Retail & Industrial Landlord and Tenant Representation; Property Management; Project Management; Investment; Research Analytics and Consulting Company Profile: AREA Real Estate Advisors is a full-suite commercial real estate firm in Kansas City. AREA is the hometown team that plays in the big leagues. Our size and scope allow us to be nimble and apply a team-driven approach while providing best-in-class service. At AREA, we deal in real estate, but our business is relationships. We are committed to meaningful partnerships with our clients to ensure that their goals are achieved. Our goal is to exceed our clients’ expectations.
Notable Clients: Nordstrom Rack, 151 Coffee, Emler Swim School, Arvest Bank, Five Below, Drybar, KU Endowment, Take 5 Oil Change, SomeraRoad, Price Brothers Management, Equity Bank, Love to Smile, Auto Now, American Academy of Family Physicians, ChowNow.
GOODMAN REAL ESTATE SERVICES GROUP LLC
25333 Cedar Road, Suite 305 Cleveland, OH 44124
P: 216.381.8200 | F: 216.381.8211
Website: goodmanrealestate.com
Key Contacts: Randy Goodman, President, Randy@goodmanrealestate.com; Richard Edelman, Senior Vice President/Principal, Richard@goodmanrealestate.com
Services Provided: National investment sales, tenant and buyer site selection, property marketing, leasing, sales, and disposition.
WORSEK & VIHON, LLP
180 North LaSalle Street, Suite 3010 Chicago, IL 60601
P: 312.917.2307 P: 312.917.2312 | F: 312.596.6412
Website: wvproptax.com
Key Contacts: Francis W. O’Malley, Managing Partner fomalley@wvproptax.com; Jessica L. MacLean, Partner jmaclean@wvproptax.com
Services Provided: Worsek & Vihon, LLP represents taxpayers in Illinois by limiting their property tax liabilities through ad valorem appeals. We have over 40 years of experience and can handle basic to the most complex assessment issues while offering the dependable, personalized attention our clients deserve. We have experience representing owners of all property types. In addition to filing thousands of appeals with the Cook County Assessor, we have been involved in numerous proceedings before various Boards of Review, the Illinois Property Tax Appeal Board, and the Circuit Court of Illinois, and have appeared before the Illinois Appellate and Supreme Courts.
Company Profile: Worsek & Vihon LLP, is a team of experienced attorneys singularly focused on real estate tax law. The firm is dedicated to minimizing property tax liabilities through strategic tax portfolio management, well-researched, creative appeal preparation and aggressive advocacy.
Company Profile: Goodman Real Estate Services Group LLC is a leading commercial brokerage firm based in Ohio that currently markets 13.6 million square feet of property for sale, lease, or development throughout Ohio, and 14 other states with partner brokers, nationwide for investment sales, and tenant and buyer site selection with over 100 companies represented. We combine experience, technology, a large support team and hard work to provide exceptional service to our clients. Goodman Real Estate have offices in Cleveland and Columbus. ASSET/PROPERTY MANAGEMENT FIRMS
CONSTRUCTION COMPANIES/GENERAL CONTRACTORS
BRINKMANN
CONSTRUCTORS
16650 Chesterfield Grove Road, Suite 100 Chesterfield, MO 63005
P: 636.537.9700
Website: BrinkmannConstructors.com
Key Contacts: Brian Satterthwaite, CEO, bsatterthwaite@brinkmannconstructors.com; Tom Oberle, President, toberle@brinkmannconstructors.com; Rebecca Randolph, Executive Director of Business Development & Marketing, RRandolph@brinkmannconstructors.com
Services Provided: General contracting services including design/build, design/assist, and construction management
Company Profile: Brinkmann Constructors is a national general contractor that has completed over $10 billion of construction projects across multiple market sectors, including senior living, multifamily, student housing, warehouse, cold storage, manufacturing, automotive, retail, hospitality, and more. With regional offices in St. Louis, Denver, Kansas City, Phoenix, and Richmond and a project footprint that spans 41 states, our mission is to deliver the best construction experience for the people we serve, with a foundation built on lasting relationships and expertise driven by insight—beyond measure.
•Axial Rockville 64 - Rockville, Virginia - Two speculative warehouses totaling 330,550 SF
•I-10 International - Tucson, Arizona - Two warehouses totaling 374,000 SF
•74 Broadway – Kansas City, Missouri - 440,000 SF mixed-use development with 280 units
•Aspendale Littleton - Littleton, Colorado - 231,000 SF active adult community with 190 units
MERIDIAN DESIGN BUILD
9550 W. Higgins Road, Suite 400
Rosemont, IL 60018
P: 847.374.9200 • F: 847.374.9222
Website: meridiandb.com
Key Contact: 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 Description: 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: Venture Park 47, Huntley, IL - 729,800 sf speculative industrial facility for Venture One Real Estate. Lion Electric, Joliet, IL - 928,500 sf electric bus / medium duty truck assembly plant for Clarius Partners. Greenwood Truck Terminal, Greenwood, IN125 door truck terminal on 43 acres for Scannell Properties.
PRINCIPLE CONSTRUCTION CORP.
9450 West Bryn Mawr Ave., Suite 120 Rosemont, IL 60018
P: 847.615.1515 | F: 847.615.1598
Website: pccdb.com
Key Contacts: Mark L Augustyn, COO, maugustyn@pccdb.com, James A. Brucato, President, jbrucato@pccdb.com
Services Provided: Since 1999, Principle Construction Corp. has been a leading design-build general contractor serving the industrial markets of Chicago Metro, Southern Wisconsin, and Northwest Indiana. We specialize in designing and constructing exacting solutions for our clients, including:
• Built-to-Suit Facilities • Speculative Facilities • Warehouse and Distribution Centers
• Logistics and Cross-Dock Facilities • Industrial Outdoor Storage • Industrial and Manufacturing Plant • Tenant Improvements • Expansions and Additions • Food Processing Facilities • Specialty Projects
Recently Completed Projects include:
• 8,205 SF animal shelter for Heartland Animal Shelter, at 586 Palwaukee Dr., in Wheeling, IL.
• 12,560 SF showroom and outdoor pool park for Doheny Enterprises, at 5307 Green Bay Rd., in Kenosha, WI
• Phase 1 renovation project for SMW Autoblok, at 285 Egidi Dr., Wheeling, IL
VICTOR CONSTRUCTION
2000 Center Dr., Suite East C219 Hoffman Estates, IL 60192
Services Provided: Victor Construction Co., Inc. manages projects from ground-up site developments to interior buildouts, specializing in retail, industrial, and commercial markets. Company Profile: Established in 1954, Victor Construction Co., Inc. is a third generation general contractor that specializes in commercial, industrial, and retail construction. Victor Construction is known as one of the most efficient and dependable general contractors in the Chicago metropolitan area and has earned the reputation due to meticulous project management, cost-effectiveness, budget awareness, and prime first-rate workmanship. Commitment to the clients’ goals is what keeps satisfied customers returning to Victor Construction for all of their construction needs— We Build for Your Success!
Notable/Recent Projects: Owens + Minor Distribution – 600K SqFt distribution facility that involved a full LED lighting upgrade, new HVLS fans, 200K SqFt section that required new cooling for medical distribution, an office renovation of 20K SqFt, and a new exterior employee pavilion.
ECONOMIC DEVELOPMENT CORPORATIONS
VILLAGE OF HOMER GLEN ECONOMIC DEVELOPMENT
14240 W. 151st Street
Homer Glen, IL 60491
P: 708.301.0632
Website: HomerGlenIL.org
Key Contact: Janie Patch, Economic Development Director, jpatch@homerglenil.org
Services: Resource center for brokers, developers, site selectors and businesses providing space and property inventory, trade area demographics, site selection assistance, custom tours, coordination through entitlement process, business opening process guidance and retention services.
Demographic Info: Strategic Will County location 25 miles southwest of Chicago with two I-355 interchanges between I-55 and I-80. Average household income of $154,800. Trade area population of 83,000. Prime commercial corridors include Bell Road, 143rd Street and 159th Street (State Route 7). 159th Street is improved with 4 lanes and access to Lake Michigan water and sanitary sewer.
Recent CRE Activity: The Villas of Old Oak (46 ranch duplexes) completing full build out. New food specialty and restaurant openings include South Viet, OneZo Boba Tea, Sultan Sweets and Cervantino’s. Restaurant with drive-thru position available at Homer Glen Bell Plaza with Pet Supplies Plus, Dollar Tree and Taco Bell, SWC 143rd/Bell.
Recent CRE Activity: Double Track Northwest Indiana: $1.6 Billion development reducing train travel to Chicago to 60 minutes; The Franklin at 11th St. Station: $100 Million Development with Residential & Retail Space; “You are Beautiful”/ SoLa: $311 Million MixedUse Multi-Family Development with 235 boutique hotel rooms & 174 Luxury Condos; Burn ‘Em Brewing: $3 Million Expansion project with 30 new jobs.
ENVIRONMENTAL/ENGINEERING FIRMS
DEIGAN & ASSOCIATES, PLLC
28835 N. Herky Drive Lake Bluff, IL 60044
P: 847.682.7381
Website: www.deiganassociates.com
Key Contact: Michele Brady, Director Business Development & Real Estate Services, mbrady@deiganassociates.com
Services Provided: The Deigan Group provides client responsive, results oriented environmental consulting and remediation services, with a focus in land-based work, including Brownfield Redevelopment, Power Plant Decommissioning/Redevelopment, Strategic Environmental Planning, Property Assessments and Site Remediation, Compliance/Permitting, Employee Exposure Testing/Safety Monitoring Asbestos Surveys/Mold/Indoor Air Quality, Waste Minimization/ Recycling/ Sustainability Plans, Successful Grant Writing.
Company Profile: A full-service environmental consulting organization specializing in defining environmental business risk and removing environmental uncertainties for property development sites. Our wide range of experience within the environmental industry helps us provide realistic cost-saving strategies for our clients with the goal of reducing their overall environmental liability and obstacles to redevelopment.
TRITERRA
1375 S. Washington Ave., Ste. 100 Lansing, MI 48910-1674
P: 517.853.2150
Website: https://www.triterra.us/
Key Contact: Don McNabb, CEO & Visionary, don.mcnabb@triterra.us;
Shawn Shadley, Director of Environmental Due Diligence,shawn.shadley@triterra.us
Services Provided: Triterra is a full-service environmental consulting firm that serves Michigan and the Midwestern United States. With offices in Lansing, Grand Rapids, Brighton, & Alma, Michigan, Triterra’s services focus on environmental due diligence; brownfield development and incentive acquisition, contaminant investigation and remediation; industrial hygiene; and natural resources management.
Notable Clients: Triterra has assisted numerous clients on various types of projects where environmental due diligence services and/or development-related incentives were necessary to keep these projects moving forward in a timely manner.
