Creator of the Lakeshore East submarket, Magellan Properties co-CEO Jim Loewenberg says retention is everything when leasing up new product. Magellan’s latest, Coast (below), opened in March of last year and is still filling up (just behind the firm’s neighboring properties, which are 92% to 93% occupied). But it hasn’t lost anyone with its first wave of renewals, Jim says. Landlords that are “giving away the store” to compete will be hit hard in terms of retention, so Magellan prefers to bide its time and refuses to do major discounting. (Patience is a virtue and a moneymaker.) Demand is strong (but seasonal), especially now that the shadow market has dissipated, he says.
Jim’s seeing a movement toward smaller units with condo-style finishes. With chunk rents getting so high, it makes downtown product more affordable to a greater number of people, and Magellan plans to incorporate the tiny trend into its next projects. The firm is looking at development opportunities in Lakeshore East, around the Near North Side, and out of state in Minneapolis, Nashville, Miami (he took our call from Florida), and Austin. The secret is always: location, location, location. Being blocks from the CBD made Lakeshore East a success, and that universal truth will drive the firm’s national expansion plans.
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