Contact Us

Here Are The Top 7 Stories In Chicago Real Estate


2016 didn't have a blockbuster Willis Tower sale, but it may have been a more exciting year to cover commercial real estate because there was so much happening across asset classes. Today, look at the top seven stories of the year in local real estate.

1. A Record Year For Multifamily Sales


With a packed pipeline of Class-A projects, and growing rent spreads, rentals were well poised to have a banner year. But we had no idea just how well apartment sales activity would fare. Q1 was highlighted by Streeterville's multifamily activity, which accounted for $490M in sales volume. By the time Q2 ended, the top 10 apartment sales in the Chicago area totaled $1.9B, and investor appetite was equally strong for both downtown and suburban assets.

By the time Crow Holdings and Marquette JV'd on the Highlands in Lombard in October (the second-largest multifamily trade of the year), sales volume was set to shatter a nine-year record. When LaSalle Investment Management sold Axis Apartments & Lofts to Bill O'Kane that same month, downtown had also set a new record.

2. The Golden Age Of Industrial


While experts in other asset classes exercised caution early and late in the year, industrial real estate activity performed even better this year than last. The main drivers were overwhelming demand for space and capital liquidity, which were both so strong that Brennan Investment Group's Michael Brennan declared this market the Golden Age of Industrial.

Chicago's location, transportation infrastructure and workforce make it a bellwether for foreign investment, which was strong in both build-to-suit and Class-B industrial.

3. Investor Appetite For Suburban Office Assets Returned With A Vengeance


After a record year for downtown office sales in 2015 and fewer opps for the marquee buildings that remained on the market, it only made sense that investors would chase yield by looking to the suburbs. And they found it. Undeterred by the higher vacancy rates (which are largely skewed by obsolete product), this year saw strong eight- and nine-figure office deals like Adventus Realty Trust's $175M acquisition of Riverway office complex in Rosemont (shown), the largest suburban office deal in two years.

Firms like Zeller Realty re-entered the suburban office market in a big way, buying Schaumburg's Woodfield Preserve Office Center for $74M and acquiring Commerce Plaza in Oak Brook for $125M. Equus Group's $80M purchase of Mid America Plaza was a loss for the previous owner.

4. The Year Of Sterling Bay

1K Fulton

If there was one developer whose name was on the lips of most real estate pros this year, it was Sterling Bay. The firm most responsible for the changing face of Fulton Market continued announcing projects while other developers focused on delivering what they had in the pipeline. And Sterling Bay expanded its vision outside of Fulton Market. It finalized its $100M purchase of the Finkl Steel site, JV'ed with KBS to acquire Portland's Meier & Frank Buildingexpanded its retail arm into other national markets and threw its hat into the ring to be the developer for the Union Station Master Plan.

Sterling Bay has been choosy with its dispositions, like its $257M sale of 1KFulton (shown) to American Realty Advisors, and made nice ROI with a $35M retail portfolio sale. But the biggest news from Sterling Bay was the April departure of co-founder Scott Goodman, who assumed the role of chairman emeritus and founded a new firm, Farpoint Development.

5. A Quiet Year For Downtown Office Sales

Tribune Tower, Chicago

After a record-setting 2015, downtown office sales would have been hard-pressed to set another record in 2016. And in any other year, the $2.9B in downtown office sales volume would be astounding. The trades were led by Beacon Capital's $470M acquisition of AMA Plaza, Hines' $340M sale of 321 North Clark and Madison Capital's $267M purchase of Sullivan Center.

But the most notable office trade of the year was CIM Group's $240M acquisition of Tribune Tower in August. CIM, which was in acquisition mode for much of the year, is now in possession of Chicago's most-anticipated adaptive reuse project.

6. The Obama Library Picked Jackson Park As Its Home

Jackson Park's Osaka Gardens

From the moment the Barack Obama Foundation decided Chicago would be home to the Obama Presidential Library, the odds were solid that the foundation would choose Washington Park as its location, given the University of Chicago's real estate activity in the area. When the foundation instead chose Jackson Park, it raised eyes beyond the university.

The Obama Foundation's reasons for its decision were solid. Jackson Park's historical significance as the site of the 1890 World's Columbian Exposition is a connection for the Library to piggyback on. And its proximity to the Museum of Science and Industry would form the foundation for a South Side Museum Campus. More important, the infrastructure improvements to roads and public transportation that will come from the Obama Library will carry over as a catalyst for economic and real estate development in nearby South Shore.

7. George Lucas Pulled His Museum From Chicago

A rendering of the Lucas Museum of Narrative Art

George Lucas may never have pictured himself as the Emperor in this story, but the Rebel Alliance that was Friends of the Parks was successful in mounting opposition to Mayor Rahm Emanuel's plan to hand Lucas 17 acres of lakefront property between Soldier Field and McCormick Place to build a museum.

The center of the Lucas Museum controversy was who gets to say what happens on publicly owned land. Friends of the Parks' legal argument, which a federal judge found credible, was that the State of Illinois had final say over how the lakefront should be developed under public trust doctrine. When Emanuel, who originally said the Lucas Museum would not cost taxpayers a dime, floated the possibility of moving the museum to McCormick Place's Lakeside Centerwith the help of $1.2B in bond issuancesthe writing was on the wall. Lucas decided to look for another city for the museum and his wife, Mellody Hobson, issued a scathing statement claiming the museum's planning process was "hijacked" by Friends of the Parks. But there's more than enough blame to be shared; Lucas and Hobson never reached out to the museum's opponents to find common ground.