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December 3, 2020

CRE Still Faces The Specter Of Higher Taxes After Failure Of Pritzker's Fair Tax Amendment Plan

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Illinois faces a higher unfunded pension debt than any state in the nation, and the failure of Gov. J.B. Pritzker’s Fair Tax Amendment ensures even a partial solution is off the table. The governor’s proposal, shot down by voters on Nov. 3, would have amended the state constitution to allow a graduated income tax, replacing the present flat tax.

It’s a key issue for anyone in commercial real estate. The growing size of the unfunded pension obligations, which now stand at $139B, corrodes the state’s ability to fund public education and puts pressure on local governments to kick in more for schools, according to CoStar Group Director of Market Analytics Brandon Svec.

“Ultimately, local governments will be forced to hike property or other taxes, and a lot of times that means commercial property owners will face higher costs,” he said.

CRE Still Faces The Specter Of Higher Taxes After Failure Of Pritzker's Fair Tax Amendment Plan

High property taxes are a hot-button issue across the state, with many commercial owners already crying foul that current tax rates hamper new investment and development. But cutting pension payments is both politically toxic and unconstitutional, leaving Pritzker with an array of bad options, ranging from boosting the flat…

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Most of the economy is in chaos, but the industrial sector in the Chicago region has kept chugging forward in 2020. As more consumers opt for online ordering, distributors leased more than 4M SF of big-box logistics and warehouse space in Q3, according to a new report from

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After Record Online Shopping Spree, 'All Heck Breaks Loose' For Apartment Owners

Shipmaggeddon has arrived, and apartment managers are scrambling to find an answer to the barrage of packages coming with it.

Bicycles, fresh meats and cheeses, kayaks, flowers and every odd-shaped box or perishable delivery in between have caused headaches for developers and property managers, who disagree on solutions but agree that there just isn’t enough space to accommodate the deluge of brown boxes and bags.

Property managers weigh difficult decisions as they tear up mailrooms, expand into amenity space, purchase high-tech storage lockers and send tenants to loading docks in efforts to keep up with the nation’s shopping volume after unprecedented levels of shipping throughout the year.

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Big Office Occupiers Push Back On The New Clichés Of Real Estate

Offices are going through one of the most profound changes in how they are used in generations, and the real estate industry is telling itself everything is going to be all right. 

That’s not surprising: After all, offices are the biggest subsector of real estate, and people that own offices only have to look at their retail assets to see how changes in the way people use a physical asset can destroy its value. 

A new prevailing wisdom has taken hold. Fewer people will come into the office, but they’ll want more space, so demand will be about the same. People might not come into city centres, but they will still want to work outside the home, so suburban offices will boom. Good technology and flexibility in offices will stimulate demand. 

While there is some truth in this, what do the ultimate consumers of real estate, the companies that lease space and their staff, think of the new world? The answers, provided by those making real estate decisions at some of the world’s biggest companies, speaking at Bisnow London’s Digital Office Summit last week, might not make comfortable reading for those who are long on offices, especially if those offices aren’t the best of the best. 

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CRE's Next Generation: Blach Construction's Kim Scott On Recruiting An Even More Diverse Generation Into Construction

 

This series asks rising stars in commercial real estate about their thoughts on some of the biggest issues facing the industry, such as inequality, climate change and technology.

The future of the U.S. construction industry depends on successfully recruiting new talent in all parts of the business, including a wide range of skilled workers, project managers and executives, according to Blach Construction Vice President, Business Development Kim Scott.

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