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A ‘Rocky, Windy, Bumpy Road’: Chicago Women Leaders Predict Tough Times Ahead

Three years of pandemic, a turbulent Chicago office market, and economic pressures from rising interest rates and a hostile lending environment have taken a toll on the city — and its women leaders are predicting more potholes along the way before the industry can count on a smoother ride.

Bisnow honored 25 women defining the future of commercial real estate at its 2023 Women Leading Real Estate event.

“I think it's gonna be a pretty rocky, windy, bumpy road as we go throughout the year,” Avison Young principal and Managing Director Damla Gerhart said at Bisnow’s Chicago Women Leading Real Estate event March 30 at the Sheraton Grand Chicago Riverwalk. “It's taking a lot more creativity in terms of the work that we're doing and trying to put deals together and getting our clients to understand a world beyond, maybe, the next two years.”

The event brought together some of the biggest players in the city’s commercial real estate scene, honoring 25 of them as Chicago’s top game-changers and deal-makers. 

But among the celebration came sober recognition that transactions have slowed to a trickle, a number of sectors, particularly office, are in a deep trough and strong leadership has never been more important.

Tricia Trester, head of client solutions for Chicago-based Cresa, said the past several months have been ones of reckoning for CRE. For too long, she said, the business community has clung to hope the world would get back to a semblance of normalcy after the onset of the coronavirus pandemic, that workers would eventually return to the office and employers would abandon work-from-home and hybrid schedules.

“And I think it's really settling in that it's going to be different forever,” she said.

Trister said she is seeing occupiers finally biting the bullet and taking stock of space needs, a trend she expects to continue.

Constrained capital markets have made deals difficult, making it more important than ever to work with strong partners and be strategic and selective in approach, said Jennifer Nichols, senior vice president and general counsel for national real estate developer CRG.

To that end, Cullinan Properties Chairman and founding partner Diane Cullinan Oberhelman said her company has taken an analytical approach to determining which markets are hot — and those might not be where the industry thinks.

“We're seeing a lot of activity in some of the tertiary and secondary markets, which are still large, going after those and thinking outside the box,” she said.

GI Stone's Sandya Dandamudi, CRG's Jennifer Nichols, Avison Young's Damla Gerhart, Cresa's Tricia Trester, Cyclone Energy Group's Sumayyah Theron, JLL's Kate Coxworth and Cullinan Properties' Diane Cullinan Oberhelman.

Cullinan Oberhelman said CRE is grappling with a “no-trend trend” that makes finding a profitable direction difficult but is also an opportunity for innovative thinking. Her firm is taking advantage of temporary confusion by pursuing select office acquisitions and retrofitting hospitality properties into multifamily projects.

“So, there are no trends, you know. It’s very spotty,” she said. “But we’re seeing a lot of opportunity in those spaces and are looking to buy. It's a very good time for your investors, to approach them in person with products they would be interested in, with returns that you think would be dynamic for them.”

Cyclone Energy Group Director of Sustainability Sumayyah Theron was similarly optimistic, saying the plight of office has been overstated, although occupiers are approaching it differently and more critically. Theron said now is the moment for health and wellness spaces as well as industrial properties like fulfillment centers, which are going strong in the Chicago area.

While other CRE asset classes have struggled, Chicagoland’s industrial market remains lively, continuing to hit record highs in terms of leasing activity. The metro enjoys some of the most intense industrial demand in the nation and a vacancy rate below 3%.

“What you're seeing in industrial, despite inactivity in the commerce sector, we're seeing a ton of manufacturing coming back,” JLL Vice President Kate Coxworth said, adding any slowdown in the velocity of industrial momentum is likely to be short-lived. “It's gonna be a little cool compared to what just happened for industrial the last few years … but I don't think it's going to be a huge slowdown.”

Most panelists agreed that CRE will have to ride the year out before deals and investments begin ticking up in a major way, pegging late 2023 or Q1 2024 as a likely turning point.

“I think we had all hoped, before banks started crashing, that we would see that uptick happen maybe at the beginning of the third quarter this year,” Nichols said. “And I think with the recent financial market collapses that have been happening, we're probably looking at the end of the year. As a developer, as an owner, we have to be way more strategic about the overall approach, because the same deal that you looked at two years ago is no longer the same deal.”

ULI's Cynthia McSherry

Nichols advised young women entering CRE at this critical juncture to “show up,” to take in-person meetings and put their faces and names out there in the public realm rather than conducting business by Zoom. That advice was echoed by nearly every other panelist, including Theron, who said face-to-face interaction is key to finding important career mentors.

“I'm a big introvert. I don't like to talk to people publicly all the time, but I have to force myself to get out of my shell, to basically talk to people, to network,” Theron said. “I have connected with so many wonderful people that have been really great for my professional career.”

In her keynote address, Urban Land Institute Chicago Executive Director Cynthia McSherry expanded on the theme of community, something she said had helped shape every woman in the room, including herself.

Though the world of work is an important community, she said, so are the places we live, civic organizations, cycling classes, churches and temporary units made up of a single shared need.

For McSherry, a breast cancer survivor, a group of “bald heads, tired eyes and blankets of every color” at her weekly visit to the treatment group evolved into a deeply bonded community and what she called a circle of hope and friendship.

“I believe we need to recommit to that idea,” she said. “In the last few years, we had an unimaginable push into isolation, and community was quickly lost. As we continue to re-engage, or perhaps to relearn how to engage, I challenge you to do it better this time. Think about how you can contribute, how you can actively participate in making your communities, our communities, stronger, more inclusive, and how you can teach and encourage others to do the same.”

Community is not all about geography or a profession, she said. It is an active word that implies coming together to accomplish something as a unit. 

“The amazing part of this is this collection of voices of people can be more diverse than it ever has been in the past — each person bringing their own uniqueness, their own thoughts, creativity to the table, and like my grandmother would say, a patchwork of quilts, each piece coming together to create a community.”