In The News
Brian Forde Comments on Property Tax Issues for Bisnow Story
September 2022 - Property taxes are one of the biggest threats to market growth and long-term investor interest in Chicago, according to a survey of commercial real estate professionals highighted in this Bisnow story. Brian Forde provided commentary for the story, highlighting concerns of many
real estate practitioners and how uncertainty over taxing levels is impacting decision-making.
The story cited an analysis by O'Keefe Lyons & Hynes earlier this year projected that Chicago area commercial assessments could increase as
much as 75% under Cook County Tax Assessor Fritz Kaegi, who is in the process of shifting some of the tax burden from residential to commercial taxpayers. Given these efforts and the delay in finalizing tax bills, there is considerable uncertainty, which could force taxing bodies to borrow funds until they receive their tax allocations.
Return to Work Challenges Impacting Chicago Office Market
August 2022 - According to a Chicago 2022 Mid-Year Sentiment Report, many companies are still struggling with getting employees back to the office, which is having a significant impact on Chicago area office occupancy levels. The report was produced by The Real Estate Center at DePaul University and The Urban Land Institute Chicago District Council (ULI Chicago) and features commentary from Brian Forde on Chicago real estate tax issues.
Nearly 65% of CRE professionals surveyed said they are either bearish or trending toward concerned when assessing the state of the market in 2H2022. Looking ahead to 2023, there is more optimism, as 50.9% said they are bullish or optimistic about market conditions for next year.
The report also notes:
- More than 62% believe the downtown office vacancy will continue its upward trajectory.
- Crime in Chicago will have the greatest impact on investors considering acquisitions in Chicago and the ability to attract tourists to retail/entertainment attractions downtown.
- Outside factors of greatest concerns among CRE professionals, in order of concern, include the rising cost of construction materials, labor costs, rising interest rates and rising inflation.
- The benefits of strong occupancy levels to the overall business ecosystem and employee development.
Is a Healthy Office the Key to Bringing Employees Back?
May 2022 - Are employees more likely to return to the office if it's healthy? This Midwest Real Estate News article tackles that question with a look at whether improved indoor air quality and natural light, among other factors, will entice more workers to return. According to the Center for Active Design, indoor air pollutants are generally two to five times higher than outdoor air pollution; poor light quality and uninspiring views can lead to more missed time from work, and natural, green surroundings are a good investment for companies to make.
Industrial Overview: Amazon scaling back on space and other stories
May 2022 - As the industrial sector continues its strong advance around the country, there are signs of a pullback in some areas. Here is a recap of recent stories highlighting the industrial market:
Amazon shedding space — After a rapid expansion during the early days of the pandemic, Amazon is looking to shed about 10 msf of space in key national markets (Atlanta, New York, New Jersey, and Southern California), according to this Bisnow story. This represents just 5% of the space it added over the past two years, however. E-commerce sales are down from their peak in early 2020, but still well above pre-pandemic levels.
Big Box Industrial Report — Finding big box industrial space is a challenge in today's super low vacancy environment. According to Colliers, the rate dropped a full percentage point to 2.61% in Q 2022. Net absorption totaled at least 5 msf each quarter since Q4 2020, reaching 45 msf over that time period. See this Illinois Real Estate Journals story for more.
SIOR Sentiment Report — Broker sentiment is beginning to slide in industrial markets, according to research from SIOR recently cited in Globe Street. Brokers are seeing more delayed or canceled transactions, and space and land shortages are leading to less transaction activity in many areas.
John Nyhan Moderates Industrial Investment Panel
April 2022 - John Nyhan moderated an investment and capital markets panel at the Chicago Industrial Properties Industrial Summit at the end of April.
For the second year in a row, John guided a conversation among industrial property developers, owners and investors who discussed their outlook in the sector for the foreseeable future and issues/trends that are impacting their sentiments.
According to John, the panel expressed great optimism for industrial real estate, not just for the balance of 2022, but for the next several years. “Panel participants acknowledged the emergence of some headwinds, such as inflation and the interest rate climate, but they don’t believe it will lessen the trajectory moving forward.”
The general consensus among a panel of experts was that some headwinds have emerged, but generally they don’t believe they will have an immediate material impact on the market. The panel included Alfredo Gutierrez of SparrowHawk, Dan Fogarty of Stotan Development, Craig Dannegger of Clarius Partners, LLC and Brock Herr of the Indiana Economic Development Corporation.
Attorney Eduardo Martinez Joins O'Keefe Lyons & Hynes
March 2022 -
O'Keefe Lyons & Hynes has hired Eduardo Martinez as an attorney at the firm. He will focus his practice on property tax appeals. He was previously a law clerk with the City of Chicago Department of Law.
He earned his J.D. and Certificate in Business Law from DePaul University College of Law in Chicago. See the recent coverage in the Illinois Real Estate Journal.
Elizabeth Gracie Moderates Chicago Office Panel at Forecast Event
January 2022 - Elizabeth Gracie moderated the office market panel again this year during the REJournals.com Chicago Forecast Event. Participants discussed the outlook for Chicago's downtown and suburban office markets as businesses continue to emerge from pandemic-related shutdowns and hybrid work schedules. The event was held in person and featured noted brokers, developers, architects, and others providing projections about the state of the market and what changes lay ahead.