Why Chicago Deserves An Oscar
We may be the Second City, but we use our acting skills to become a city where businesses want to move, even winning national honors as the top metro for corporate relos and expansions. (If only Versace would design us some red carpet-wear.)
The metro was home to 373 new and expanding companies, translating into 10,000 new jobs and $2.8B in investment, last year, winning Chicago No. 1 from Site Selection magazine. Studley EVP and tenant rep Rick Schuham (snapped on the slopes) says we offer: O’Hare, top-tier schools, abundant public transit, and cheaper labor and real estate costs than metros like NYC and Boston. (Without the pesky traditions of winning baseball games that come with those cities.) We also love to build when rents get to 70% to 75% of replacement cost (like right now), he tells us. Even CBD land sites are still plentiful, and projects go up quickly thanks to a development-friendly local government, putting pressure on occupancy costs.
The state does have its challenges, Rick says, making the future of incentives for corporate relos uncertain. Also, money for TIF districts is being scrutinized more heavily, thanks to tightened municipal budgets. With corporate expansions, Rick’s not seeing them in terms of space, but rather number of employees. “Relocations are generally to smaller, more efficient space,” he says. For example, ADM’s buzzed about move downtown to 77 W Wacker (above) ended with a two-floor lease. A coup for the city, but the square footage would have been far larger with pre-recession space standards. Rick’s off to Colorado today for his last skiing of the season.
On the landlord rep side, Avison Young principal Brad Despot (snapped at an IU football game last fall with the family, his oldest son goes there) agrees that relatively low rents compared to the coasts and an endless talent pool from nearby universities are what draw companies. When they do move, the latest must-have office requirements and amenities include vibrant and collaborative space, bike rooms, a fitness center, tenant lounges, and a conference center. (Two of those are fitness-related. Three if you count the sweating you do while giving a presentation in the conference room.) How we can improve: reduce the overall cost of living and doing business in the state, fix the gridlock in Springfield, and lower construction costs, he adds. Brad's team reps River North Point, which has recently signed four new leases totaling more than 100k SF. They've also seen a lot of activity at new listing One South Wacker, he says. Outside of work, he’s mostly been blowing and shoveling snow.