CHICAGO | Economic & Business Development

[marothisu]

According to the BLS LAU, the Chicago-Naperville-Arlington Heights metropolitan division in October 2024 had the highest labor force population and employed persons population of residents of any month back to at least January 1990. That's over 400 months.

The city and full metro numbers are released tomorrow morning and if there's any indication, it's possible that the city for October 2024 could be #1 position similarly or very high for both measures.

[jboy560]

That’s awesome to hear. Still seems so odd to me the disconnect between data like that and the lagging/incorrect census estimates that show we’re losing population. The city was much larger in 1990 so how could we have that many jobs but so many fewer residents?

[marothisu]

Originally Posted by jboy560

That’s awesome to hear. Still seems so odd to me the disconnect between data like that and the lagging/incorrect census estimates that show we’re losing population. The city was much larger in 1990 so how could we have that many jobs but so many fewer residents?

Because the estimates are bullshit and off for a few cities. They kept saying Chicago was losing population and ended up growing by 51K. The estimates after 2020 are the same exact in methodology as before 2020. Guess what? Before 2020 they estimated Chicago lost population and Illinois lost 250K people. Neither was true. Chicago gained population and it turned out after a semi recent revision that Illinois gained 30K residents. They changed nothing. There are tracts in Chicago where the estimate before 2020 was under 1000 people. Then the actual count via 2020 was over 2000 people. Estimates were way under. So what was the 2021 estimate? Back down to under 1000. It's BS but it's also in how these things are estimated. Nobody in their right mind would trust these things so much.

By the way, you can look at my posts here from before 2020 when I would be posting data like labor force and employment data and telling people the city was actually growing, not losing population. While household size is a thing, I think people may be surprised again in 2030 when they find out Chicago actually gained population (but we'll see what happens in the next 5 years).

Also, October 2024 data for city and metro area is out. Out of the 417 months back to Jan 1990...October 2024 has the highest amount of residents in the labor force of any month and the 2nd highest number of employed residents. Only June 2000 had a higher number of employed residents and it was just by 700 some more than October 2024.

Chicago also for labor force increase from October 2019 to October 2024 ranks #8 in the entire US out of 124 total cities (200K+ population). The bottom 3? NYC, San Francisco, and Los Angeles. Chicago gained over 50K people in its labor force, resident wise, from October 2019 to October 2024.


1 more tidbit. People will talk about the reduction of household sizes. This is true in most cities/metro areas across the US. People are having less children than 30, 40, 50, etc years ago. However, it is funny seeing so many building permits, business licenses, and zoning change requests in the last year for new day cares and preschools all over the city.

The preschool we go to has a lottery and is opening up another location not far away just because of the overflow of people trying to get in.

[Busy Bee]

In grocery store news, a judge blocked the Jewel-Osco - Mariano's merger, which probably also means the more national level Kroger - Albertson's merger is dead as well.

Both good things in my opinion.

[twister244]

More good news on the Quantum front.... IBM doubling down on Chicago.

https://www.chicagobusiness.com/tech...gNews-20241212

As part of its algorithm efforts, IBM will build a quantum computer in Chicago, initially at Hyde Park Labs, a new research facility near the University of Chicago. The state expects it to have a permanent home in the quantum park, and IBM will receive a $25 million grant. The state did not say how many jobs will be involved, but it’s believed to be a few dozen.

[VivaLFuego]

Originally Posted by Busy Bee

In grocery store news, a judge blocked the Jewel-Osco - Mariano's merger, which probably also means the more national level Kroger - Albertson's merger is dead as well.

Both good things in my opinion.

If they need to combine to survive and compete with Walmart (as alleged), perhaps instead of further consolidation, the antitrust fix is that Walmart should be broken up into regional Baby Bells?

[Busy Bee]

God I hate Walmart

[Steely Dan]

Originally Posted by VivaLFuego

If they need to combine to survive and compete with Walmart (as alleged), perhaps instead of further consolidation, the antitrust fix is that Walmart should be broken up into regional Baby Bells?

"Illinois-Mart"

I like it!

[sentinel]

Happy 2025 everyone!
Hopefully the Chicago economy keeps thriving this year.

ChiYimby has a new article about retail openings/relocations on the Mag Mile and Oak St, and there was a blurb at the end referencing a recent Crains article regarding how Chicago ranked third in the nation in terms of growth of $150K households under the age of 25, from 2018 to 2023 (behind NYC and Seattle), according to the census bureau.
I feel like marothisu may have more detailed info, but either way, still great news.

[marothisu]

Originally Posted by sentinel

Happy 2025 everyone!
Hopefully the Chicago economy keeps thriving this year.

ChiYimby has a new article about retail openings/relocations on the Mag Mile and Oak St, and there was a blurb at the end referencing a recent Crains article regarding how Chicago ranked third in the nation in terms of growth of $150K households under the age of 25, from 2018 to 2023 (behind NYC and Seattle), according to the census bureau.
I feel like marothisu may have more detailed info, but either way, still great news.

Chicago from 2018 to 2023 also had the 3rd highest increase of $200K+ households of any city. If you are thinking that Houston was 4th because it's the 4th biggest city then nope. In fact, Chicago a larger increase than Dallas and Houston combined.

[twister244]

Not sure exactly where to post this, as it spans both economic/business to general discussions....

https://www.chicagobusiness.com/comm...gNews-20250108

So - a developer is trying to buy 311 South Wacker drive. What's the big deal?

Well.....

Terms of the pending sale were not immediately clear, but sources said the duo is under contract to pay around $70 million — close to $50 per square foot — for the 1.3 million-square-foot building.

........

But a sale in that price range would pale in comparison to the $302 million that a venture of Chicago-based Zeller Realty Group and Chinese investor Cindat Capital Management paid for the tower in 2014, according to Cook County property records.

That is absolutely bonkers. For a skyscraper of that size to be sold at that level of discount.... Just blows the mind. However, the one bit of news that seems to be following trends is what to do with the building.

Among the likely redevelopment options would be turning part of the tower into a hotel, or the high-rise portion into a residential use as demand for downtown apartments remains strong.

While this bodes well for keeping foot traffic in the loop up with people living there as opposed to coming in to work at an office.... It does remind us of how bad the office market is, and continues to be. Also, it does make me wonder how much of an impact these residential conversions are having on proposed new residential construction? With so much office space being sought out to convert to residential now, it's probably having some impact on the demand for construction on new buildings, no?

Interesting article though.....

[ardecila]

Originally Posted by twister244

Also, it does make me wonder how much of an impact these residential conversions are having on proposed new residential construction? With so much office space being sought out to convert to residential now, it's probably having some impact on the demand for construction on new buildings, no?

Interesting article though.....

Maybe a little in the aggregate, but the hottest areas for residential (West Loop, River North) aren't seeing the same pace of conversion proposals. I expect those areas will continue to see a slow trickle of new residential construction since a purpose-built resi tower can capture top-dollar rents: better-quality units with more natural light, balconies, and other amenities.

For some reason as a city we have decided to encourage and even subsidize the loss of Class B/C office space in the Loop (close to multiple transit options), pushing it into the shoulder neighborhoods that have worse transit. Really it's the shoulder areas where resi conversions should be incentivized, and Loop Class A properties allowed to depreciate to Class B/C so that the best transit access is afforded to office workers at large and small companies alike. But of course that wouldn't do anything for the most influential office landlords.

IN the abstract I'm fine with downtown becoming more of a mixed-use neighborhood with dense residential alongside offices, but in reality it seems like the effect of this is to push small companies into other areas of the city where workers are far more likely to drive and park.

[twister244]

Originally Posted by ardecila

For some reason as a city we have decided to encourage and even subsidize the loss of Class B/C office space in the Loop (close to multiple transit options), pushing it into the shoulder neighborhoods that have worse transit. Really it's the shoulder areas where resi conversions should be incentivized, and Loop Class A properties allowed to depreciate to Class B/C so that the best transit access is afforded to office workers at large and small companies alike. But of course that wouldn't do anything for the most influential office landlords.

Gonna disagree with you here. Whatever disadvantages to this strategy are vastly outweighed by not letting major office buildings sit empty in the loop..... Nothing good is going to come from having an empty downtown with nobody there.

[IrishIllini]

^ isn't that where the conversions would hypothetically come into the picture?

[munchymunch]

Yes and no. Fulton market really doesn’t have too much conversion potential, it was mainly industrial before and what office is there is leased. They aren’t suffering the same as the loop. River north has a bit more potential however they have newer stock that’s typically not the easiest to rework into residential (Like the loops older buildings).

311 Wacker’s potential is interesting especially at that price point. While most office buildings built during at that time have huge floor plates, the top floors of 311 are pretty slim in comparison. Definitely see potential for hotel/residential. (New stadium next door would help as well)

[Randomguy34]

311 S Wacker going residential would certainly be "interesting" to say the least. I guess if office space is desperately needed in that part of the Loop, a developer could resurrect the twin tower proposal on the neighboring lots.

The weirdest part is that a 950 ft building might sell for $70 million.

[munchymunch]

Yup, the buyer is the same developer (John Murphy) that floated the towers next door.

[twister244]

Originally Posted by Randomguy34

The weirdest part is that a 950 ft building might sell for $70 million.

Amazing? Yes.

An anomaly? Not right now.....

This is another Crains article that hit earlier today.....

https://www.chicagobusiness.com/comm...gNews-20250109

Namdar Realty Group and Mason Asset Management paid about $85 million late last month for the skyscraper at 70 W. Madison St., people familiar with the deal confirmed. The sale at around $60 per square foot is a fraction of the $375 million that a joint venture of Chicago-based real estate firms Hearn and GEM Realty Capital and San Francisco-based Farallon Capital Management paid for the building in 2014, according to Cook County property records.

[VKChaz]

While this bodes well for keeping foot traffic in the loop up with people living there as opposed to coming in to work at an office....

Residential is better than nothing, but it won't replace the demand for commercial space from thousands of office workers. And even densely populated residential streets can feel very inactive much of the time.

[streetline]

Originally Posted by ardecila

Maybe a little in the aggregate, but the hottest areas for residential (West Loop, River North) aren't seeing the same pace of conversion proposals. I expect those areas will continue to see a slow trickle of new residential construction since a purpose-built resi tower can capture top-dollar rents: better-quality units with more natural light, balconies, and other amenities.

For some reason as a city we have decided to encourage and even subsidize the loss of Class B/C office space in the Loop (close to multiple transit options), pushing it into the shoulder neighborhoods that have worse transit. Really it's the shoulder areas where resi conversions should be incentivized, and Loop Class A properties allowed to depreciate to Class B/C so that the best transit access is afforded to office workers at large and small companies alike. But of course that wouldn't do anything for the most influential office landlords.

IN the abstract I'm fine with downtown becoming more of a mixed-use neighborhood with dense residential alongside offices, but in reality it seems like the effect of this is to push small companies into other areas of the city where workers are far more likely to drive and park.

Do you have any numbers to show that "push[ing] small companies into other areas of the city" is happening?

Maybe I'm missing something, but it seems like in some cases the opposite is happening. I recall seeing an article about the kind of smaller companies and charities that would normally occupy outlying class b/c offices moving into loop towers as rents dropped into their price range.

To the extent that companies are moving to the West Loop or River North, I get the impression it's because they want the more boutiquey product and neighborhood there, not because they've been priced out of The Loop due to residential conversions driving up office rents. Companies moving out of The Loop (whether to shoulder neighborhoods, or just to smaller spaces overall) seems like the cause rather than the effect in this case.

I definitely don't want to lose the loop as a center for dense office use. But I don't think a realistic amount of subsidizing residential conversion is going to risk that, while decay stemming from a bunch of empty buildings seems like a larger risk. And I also think that doubling or tripling the residential population of the loop would make it a more pleasant place to be for everyone, especially outside 9-5 hours.