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Real Estate Bisnow
   
January 16, 2012 
 
 
Chicago’s Next
New Neighborhood

Join us for Bisnow's Chicago Data Center Boom! All-star panelists will discuss what's driving demand, what are user requirements, and what new technologies are required. Tues, Jan. 29 at Trump International Hotel. Sign up today!

 
A plan to cap over the Kennedy Expressway in the West Loop, thus creating a new neighborhood, could be financed by the next tenant that anchors a new office tower in the area, says Fifield Co CEO Steve Fifield. (As much fun as it is to picture a huge dome, remember that "capping" is more like a platform.)
 
Fiffield Co CEO Steve Fifield
Steve (snapped yesterday) is promoting an $80M project to build four park-filled plazas over eight acres of the highway. He has developed about $1B in West Loop offices and residences and has sites permitted for two more offices (at about $200M a pop). Over the years, corporate tenants have hesitated to lease because the depressed I-90/I-94 corridor that dissects the district is unsightly and isolates it from the rest of the CBD, he says. To advance the project, Steve, and smdp principal Scott Sarver, will resume talks started last fall with neighborhood groups and city officials; in March they'll propose legislation to expand the Canal/Congress TIF and, by late spring, approach brokers and West Loop developers to assess interest among clients.
 
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Capped Kennedy rendering
The plazas—with parks and recreation amenities—would span the highway in four places from Randolph to Adams streets. (The above rendering does look better than our current canyon of cars.) Plans to build projects over highways in other cities have failed because they’re exorbitantly expensive. But Steve tells us his plan is reasonably priced because the plazas wouldn’t have to support heavy high-rises and their intricate infrastructure. It’s just parks, benches, sidewalks, lighting, and recreation facilities.
 
Fifield Co SVP Erin DiPaola
Steve and SVP Erin DiPaola say Chicago needs room to build more Class-A office towers and this sector of the West Loop is zoned to accommodate up to 9M SF more. Of the 50M SF in modern, Class-A office towers downtown, only 5% is vacant, with only five 250k SF blocks of space available. “This is the tightest office market we’ve ever seen,” Steve says. It’s "inevitable" that growing corporations will target the West Loop for cool new offices that will attract talented employees. Tax revenue from just one company like Google, which is looking for about 200k SF, could finance much of the proposed plan.

Data Centers: Leasing Beats Owning
 
JLL Managing Director Matt Carolan
Many tech intensive companies are leasing rather than building their own data centers, JLL Managing Director Matt Carolan (above) tells us. They want the flexibility to re-use their corporate real estate for expansion and move into an upgraded facility when necessary. A few months ago, one large retailer whose business was migrating from brick and mortar stores to the Net, left the downtown data center it owned to lease a 50k SF facility in the ‘burbs. Matt says the new building gave the retailer more uninterrupted power and back-up generators. Hear more about what’s new in data centers from Matt and other expert panelists at Bisnow’s 2nd Annual Data Center Boom, Tuesday, Jan. 29, Trump International Hotel & Tower Chicago. Register here!

Lucky ‘13 For Chicago Industrial
 
Integra Realty Resources Managing Director Eric Enloe (left with IRR Denver chief Brad Weiman
Fasten your seatbelts; it’s going to be an active year for the Chicago-area industrial market, Integra managing director Eric Enloe (left with IRR Denver chief Brad Weiman recently in NYC) tells us.  He predicts property values to rise 3% to 4% this year and rents to grow 2% to 3%. Local industrial vacancy hit a four-year low in Q3 at 10%, according to Colliers, and he expects that number has stabilized. Outdated buildings still struggle with occupancy, but many will be repurposed or demolished as build-to-suit and spec projects increase.

Our New Chicago Reporter
 
Bisnow's Marissa Oberlander

We traveled far and wide to find our new Chicago reporter, Marissa Oberlander (snapped last year in Xishuangbanna, China).

But she knows the local beat. Marissa wore out her leather shoes reporting at the Medill School of Journalism. Since then, she has produced interactive graphics for The Financial Times; covered CRE for Crain’s Chicago Business, and reviewed theater for the Chicago Reader. Please feel free to get dramatic, as long as you send CRE news and ideas to marissa.oberlander@bisnow.com.

Upcoming Bisnow Events!
 
Tuesday, Jan. 29, 7am-10am. Bisnow's Chicago Data Center Boom! All-star panelists will discuss what's driving demand for data centers, what are user requirements, what new technologies are required, and the different data center technology methodologies. Register here.

Thursday, Feb. 15, 7am-10am Bisnow's 3rd Annual Chicago Retail Real Estate Summit. Hear the experts talk about what retail tenants are looking for, new development, and investment activity. Register today.
 
 
 
 
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