Serving River North's Commercial and Office Real Estate Needs for Over 28 Years.

Considering moving your tech company into Chicago’s River North area?  Consider faster because your time is running out.  There is already a lack of space and prices are beginning to climb.  Large Fortune 500 tech companies are taking over and if you want to be in on the action, you have to move now. 

Apartment Buildings Increase Downtown Chicago; Due to Increase in Employment

If you live in or near downtown Chicago, or just travel into the city for work, you’ve probably noticed an increase in construction; apartment buildings by the dozens have been underway for approximately a year and there’s no sign of them slowing down until late 2018.   There are 34 new residential high-rises ready to lease, and that’s not including all of the smaller neighborhood projects underway. 

One would think that with such a plethora of options, rents would decrease, but that’s just not the case.  As of now, rents are the same if not higher.  Analysts predict the rates to lower slightly once we create a “bubble” but not by large.  Luckily for renters, the supply of rental units will exceed demand and keep rents in check, at the very least.

Why are so many people resorting to renting downtown Chicago, making the Windy City the leader in residential development? 

DID YOU KNOW? –
Illinois as a state has lost more residents than any other state (2016) and yet Chicago’s city center gained approximately 43,000 residents from 2010-2015, according to the U.S. Census Bureau. 

Property Tax Hike (In Cook County)
Rahm Emanuel set into motion a Property Tax Bill hike for Cook County, which caused taxes and assessments to hike drastically.  Tribune analysis of data, provided by the assessor’s and treasurer’s offices, show that the 10 biggest residential property tax increases in the last three years occurred in single-family homes in River North, Lincoln Park, and the Gold Coast.   Affluent neighborhoods such as these had a larger increase in values, whereas other neighborhoods did not see such a rebound from the recession. 

Increase in Employment (In Chicago)
The city of Chicago has been able to absorb the new apartment construction fairly well due to the employment increase.  Who doesn’t want to live near their job?  In 2015, there were 80,000 new jobs, and in 2016 another 60,000.  Large companies such as McDonalds, Google, Kraft Heinz, Outcome Health, Beam Suntory and other technology-based firms moved their corporate offices, along with thousands of their employees to Chicago.  Most of the Baby Boomers are now empty nesters, still working full-time but able to live downtown like they always dreamed of doing.

DID YOU KNOW? –
River North and the West Loop have the lowest vacancy rates.

Commercial Rents Increase As A Result Of The Employment Increase
When Google moves, it’s safe to say you should too.  That is the mindset of many technology-based agencies that have repositioned themselves in the heart of downtown, and it was certainly the thought process behind mayor Rahm Emanuel’s plan to make Chicago the center of a multibillion-dollar tech industry.  Health-tech is Rahm Emanuel’s tech of choice but he’s not ruling out the potential of landing Amazon, as that would bring approximately 150,000 promised jobs to Chicago.  A great example of this trend is Tech Incubator 1871, which is driving the growth of technology companies in Chicago. 

Commercial Rents Increase Due To Lack Of Available Space
Because Chicago is still commercially competitively priced, large corporations are opting to transfer headquarters, allowing for funds to be distributed into new jobs and training instead of operating costs.  Although Chicago may be competitively priced now, doesn’t mean it will be for long. 

            “Over the course of the last 2-3 years, we’ve seen a steady demand from small, recently funded technology companies looking for 2,000-3,000sf loft office space.  Due to fixed inventories of loft type office space, rents have drifted up with demand and we expect this trend to continue well into the next couple years.”

– Jerry Lasky, President and Co-Owner of Spectrum Real Estate Properties

DID YOU KNOW? –
Office rents in Chicago rose 20% in 2016 (2^nd highest increase in the word and the largest in the United States).  Surprisingly enough, although Chicago is growing and growing fast, Chicago is still a bargain compared with the world’s priciest cities.  (Manhattan has the highest average per square foot, at $144.37

Demand is increasing for office space as companies are looking to locate near the young workforce.  The supply of commercial properties has decreased due to commercial properties being converted into residential; causing the commercial rents to surge. 

DID YOU KNOW? –
The supply of commercial properties has decreased due to commercial properties being converted into residential.

If you’re on the fence about getting your dream office in 2017 or waiting it out until 2018, you may want to jump now before your costs go up another 15-20% in the next 6-12 months.