Posted Oct 1, 2021, 4:25 PM
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Join Date: Apr 2013
Location: Chicago & Philly
Posts: 2,776
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808 N Cleveland just got construction permits. Still hate the design and still think it's disrespectful, but something worth noting is this is the 3rd highrise to be permitted this week alone. This past month we've seen a couple of permits like 345 N Morgan, 900 W Randolph, the Obama Center, and The Reed. This month Lincoln Yards is breaking ground on their first building, and some proposals like 920 N Wells are starting site prep. The next boom has already started and we're seeing A LOT of new starts. Investors and developers at yesterday's State of the Market event seemed quite optimistic about the city's future, and construction is starting to reflect that.
'Chicago Is About To See An Increase In Density Like Never Before'
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This year’s deal volume is currently below the historical average, Kiser said. But the market is on the cusp of change. Cap rates for Chicago-area properties are about 80 basis points higher than comparable properties in coastal markets and investors are taking notice. Capital started flowing about three to four months ago. With all the pent-up demand, the coming fourth quarter could see a near-record volume of closed deals.
“We have clients in 83 foreign countries and they are looking to invest in Chicago,” Kiser said.
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Chicago’s Central Business District had a vacancy rate of 17% in the second quarter, its highest ever, according to Colliers International, but O’Donnell attributes much of the vacancy to older or obsolete downtown buildings. The newer, Class-A towers are still well-leased and in demand, so if commuters get over worries about using public transportation and office users settle on how they will utilize space post-pandemic, portions of the downtown market could see bursts of activity in the coming year. “I think there’s going to be a mad dash,” O’Donnell said.
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Attracting new development shouldn’t be a problem for Chicago in the future, according to Level-1 Global Solutions CEO Thomas McElroy.
Several mega-developments circling the downtown core are beginning to rise, including Sterling Bay’s Lincoln Yards, Related Midwest’s The 78 and JDL Development’s One Chicago, work that continued despite the pandemic, he pointed out. And with several of these developers focused on transforming the city into a life sciences hub that will compete with coastal cities, multifamily owners can expect an influx of affluent renters.
“Chicago is about to see an increase in density like never before,” McElroy said. “There might be ebbs and flows, but it’s not going to stop.”
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https://www.bisnow.com/chicago/news/econ...ease-in-density-like-never-before-110391
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