By: Lauren Coffey - TBBJ & Inno Reporter, Tampa Bay Business Journal
An aerial view rendering of University of Tampa's Benson Alex Riseman Fitness and Recreation Center
The University of Tampa will rename and expand its fitness center after receiving a donation from one alumnus.
The Fitness and Recreation Center will be named the Benson Alex Riseman Fitness and Recreation Center, after Riseman gave a donation for an undisclosed amount to the school. Riseman is the CEO of BENSEA Enterprises, a consulting agency and think tank with a focus on business strategy, branding, marketing and revenue generation. He previously founded Green Dot Corp., a financial technology company that provides reloadable prepaid debit cards. It went public in 2020 (NYSE: GDOT).
Riseman is based in Las Vegas.
"While I have a passion for entrepreneurship, I like that the fitness and recreation center will be open for all students," Riseman said in a statement. "It doesn’t matter your major or interests — it’s all part of the university’s commitment to help students strengthen their mind, soul and bodies."
While the expansion was in the works, the "large" donation from Riseman boosted the project, which will break ground in spring 2021.
“We know that fitness helps students excel academically, and especially given the past six months, students need more than ever the kind of health and wellness that a facility like this will provide,” UT President Ron Vaughn said in a statement. “I am grateful to Benson for helping us get started on phase II of the project."
The expansion has been in a factor in UT's master plan for years, according to the university. Creating a world-class fitness and recreation center will help elevate the university, helping serve both current students and as a springboard for recruitment of future students and faculty.
The center will be for only UT students, staff and faculty. The first phase of the fitness center was opened in September 2016, spanning 40,000 square feet. Phase Two of the building will include:
Buildings that exist in the project's footprint are estimated to be roughly 100 years old and will be demolished. Kreher Architects Inc. is the architecture firm for the project, with an undecided general contractor.
The university is also working on the 4,000-square-foot Science Research Laboratories and the Ferman Center for the Arts.
The fitness center will be designed and constructed to qualify for the Leadership in Energy and Environmental Design certification by the U.S. Green Building Council. If it receives that designation, it will be the seventh LEED-certified building on campus.
Occupancy is at its lowest level since at least 1998, dragged down by the pandemic. But step into the suburbs and it's a different world entirely.
By: Alby Gallun
As downtown apartment landlords struggle through the worst market in decades, it's sunshine, lollipops and rainbows in the suburbs.
The downtown occupancy rate fell to 87.1 percent in the third quarter, down from 93.8 percent a year earlier, according to the Chicago office of lntegra Realty Resources, a consulting and appraisal firm. The rate has never been that low in the 22 years since the firm's executives began tracking the downtown market.
To attract tenants, downtown landlords have slashed rents, which fell 18 percent to 23 percent, depending on market segment, from third quarter 2019.
"Some (landlords) are saying they can't remember it ever being this bad," said Ron DeVries, lntegra senior managing director.
The coronavirus pandemic and civil unrest over the summer have reduced the appeal of high-rise living across the country, and with so many people working from home, fewer are renting apartments to be near a downtown workplace.
That has turned out to be a bad combination for landlords-but a good one if you're in the market for a new pad. Downtown rents are down about $500 across the board, DeVries said.
Step into the suburbs and it's a different world entirely. The suburban apartment occupancy rate rose to 95.3 percent in the third quarter, up from 95.1 percent in the second quarter and 95.0 percent a year earlier, according to lntegra. The median net suburban rent was $1.53 per square foot in the quarter, versus $1.54 in the second quarter and $1.48 a year earlier.
The forces that have depressed demand for apartments downtown - corporate work-from-home policies and the decline in people seeking out dense, urban living - have had little impact on the suburban market.
"It's like no market event has happened there," DeVries said.
A TALE OF TWO MARKETS
While the suburban Chicago multifamily occupancy rate has inched higher this year, the rate for Class A downtown apartments has dropped to its lowest level in more than two decades. Suburban rents have held steady, but downtown Class A rents have plunged to 2013 levels.
With coronavirus cases surging and the leasing entering a seasonally slow period, DeVries expects the downtown market to fall further. But recent news about promising COVID-19 vaccines offers hope that it could begin to recover next summer.
Though vaccinations will take time, they'll eventually allow companies with downtown offices to call employees back to the office. If people are working downtown, they're more likely to live there.
"When are employers going to start bringing people back?" DeVries asked. "Because that's really going to drive demand."
If the vaccines "turn out to be successful, I think things could turn around on a dime," he said.
Still, DeVries expects the downtown market won't come back fully until the spring of 2023, more than two years from now. It has fallen hard: Including concessions, the average rent at Class A buildings-the fanciest and most expensive of the bunch-fell to $2.53 per square foot in the third quarter, down 18.4 percent from a year earlier, according to lntegra. The last time the average Class A rent was that low was in late 2013.
The average Class Brent fell even more: 23.3 percent, to $2.07 per square foot where it was in 2011.
One key measure of demand, absorption-or the change in the number of occupied apartments-has slipped into negative territory after expanding for several years. Downtown absorption totaled -531 units in the quarter, and lntegra forecasts absorption for the year will drop to -1,300 units, the first year of negative absorption since 2005.
With numbers like that, some landlords could wind up defaulting on their debt. But Devries said he doesn't expect widespread distress downtown because most properties aren't carrying too much debt, and lenders, sensing a recovery on the horizon, will be flexible with borrowers.
"There's got to be motivation to wait it out," he said.
Apartment development has slowed to a crawl downtown, but some developers are moving ahead with projects, betting that the market will be much stronger when they finish them. Marquette, a Naperville-based developer, recently broke ground on two apartment buildings totaling more than 500 units on the west end of the Fulton Market District.
''There's lots of tire-kicking in the city," said Damian Eallonardo, senior vice president of operations at W.E. O'Neil Construction. "I don't think any developers have given up on it. They're just moving more cautiously."
But they're still pretty busy in the suburbs, he said. Chicago developer John Murphy recently restarted construction on a 153-unit apartment project in downtown Skokie that O'Neil is overseeing as general contractor.
"We're still seeing a fair amount of activity" in the suburbs, Eallonardo said.
Outside of downtown, many landlords that cater to lower- and moderate-income tenants have had a hard time collecting rent as the coronavirus has put many people out of work.
But the market for apartments in many Chicago neighborhoods is holding up for the same reason the suburbs are, DeVries said. Though lntegra doesn't publish data on neighborhoods, it performs consulting assignments in them.
"People aren't leaving the city of Chicago," Devries said. "They're leaving density."
By the Business Facilities Staff
The 18th largest economy in the world, Illinois has grown and attracted some of the most innovative and iconic companies on the planet—including Amazon, Caterpillar, Boeing and Wrigley Company—thanks to its many advantages for business and talent.
Among the state’s greatest assets are its talent pool of nearly 6.5 million people and one of the finest transportation and logistics networks in the country. Tax credits are offered by partners at the state and local level to select companies considering alternative locations.
Home to more than 200 higher education institutions, Illinois continues to fuel one of its greatest assets for business: its diverse, skilled and hardworking workforce.
About a third of the state’s talent pool hold a bachelor’s degree or higher, which exceeds the national average. That’s thanks to Illinois’ top-notch higher education institutions, which produce 10 percent of the nation’s computer scientists and graduate more engineers than MIT, Stanford and Caltech combined. It’s no surprise that the minds behind YouTube, Oracle, CDW, PayPal and Tesla Motors are graduates of Illinois schools.
More than just highly educated, in the spirit of the famous Midwestern work ethic, Illinois’ workforce is characterized as loyal, hardworking and honest. Illinois’ more than 200 higher education institutions include some of the top colleges, universities and graduate programs in the nation.
The private University of Chicago ranks third on U.S. News’ 2018 Best National Universities list, while Northwestern University and the University of Illinois host engineering programs among the country’s top 15. Many of these institutions partner with businesses and incubators to create custom skills-training programs, such as the UIUC Research Park, Argonne National Laboratory and the Illinois Science and Tech Park.
The state’s more than 80 nationally ranked public high schools ensure that the workforce pipeline is continually growing.
One of the top states for manufacturing in the nation, Illinois boasts a rich history of industrial excellence that has evolved into an advanced, technology-driven sector. Illinois manufacturing companies benefit from low energy rates and deregulation as well as a low-cost, high-quality water supply—not to mention the state’s central North American location and world-class air, passenger and freight transportation network
ARLINGTON HEIGHTS: GROWING AND THRIVING
Arlington Heights is a growing, thriving community just northwest of Chicago, home to nearly 76,000 residents with an average household income of over $110,000. One of the largest business communities in the Chicago region, Arlington Heights is home to nearly 3,000 for-profit companies and over 50,000 daytime workers.
Arlington Heights’ position in the Chicago market is second-to-none. Two Metra commuter rail stations connect the community to Downtown Chicago and a host of other northwest suburban municipalities. Arlington Heights also is directly served by three interstate highways: I-90, I-290 and I-355, and conveniently located only 15 minutes from both O’Hare International Airport (ORD) and Chicago Executive Airport. Connectivity to three interstate highways allows Arlington Heights incomparable positioning within the Chicago metropolitan area and access to logistics by air and ground transport.
Arlington Heights also is a great corporate destination. In 2016, HSBC relocated their Chicago area offices to the community, bringing 1,500 jobs and re-occupying over 160,000 square feet of formerly vacant space. Other major companies such as Amazon, GE Healthcare, Northrop Grumman, AT&T and Paddock Publications (which publishes The Daily Herald, one of America’s 75 largest newspapers by circulation) employ hundreds within the community.
Retail also thrives in Arlington Heights. In 2019, the municipality conducted over $1.27 billion in retail sales. Rapidly-growing grocery chain Mariano’s, which now boasts over 30 locations throughout the greater Chicago metropolitan area, opened its very first store here. Arlington Heights also is an attractive location for industry. The West O’Hare Commerce Center is a two-phased 330,000-square-foot spec industrial facility less than a mile from I-90 at Arlington Heights Road, that is host to multiple growing companies like Taiki USA and AVI Systems.
Other established businesses continue to call Arlington Heights home. Arlington International Racecourse is one of the world’s premiere horse racing venues. It has been the home of the Arlington Million, one of thoroughbred racing’s richest events, since 1981. The recently-renovated Mitsuwa Marketplace is the largest Japanese grocery store in the Midwest, serving as a destination for patrons throughout the Chicago area and servicing a large tourist population.
Arlington Heights remains a target of significant development. Arlington 425, a mixed use development in the Downtown that will offer 361 new apartments and 35,000 square feet of commercial space is approved and anticipated to begin construction in 2021. The Arlington Downs project is an exciting addition to the Chicago market.
When complete, the $250 million mixed-use development will boast nearly 1,000 residential units, a 115-room hotel, as well as retail, restaurant and entertainment space. Set on over 27 acres of land, the development has immediate access to three interstate highways, and will be a unique Chicagoland destination. The project is being developed in phases. The first phase, One Arlington Apartments, was recently completed and hosts 25N Coworking, a 15,000 square foot private and shared workspace venue. Phase 2, a 263-unit luxury apartment development currently is being completed.
As part of the community’s efforts to grow and support commerce and industry, Arlington Heights offers a Zero Interest Loan program available to both new and existing businesses. Interested business or property owners can apply for an interest-free loan of up to half their project cost, capping at $20,000. Eligible expenses range from the purchase of new equipment to technology upgrades to improvements of existing facilities. Retailers also are eligible for the Small Business Sales Tax Rebate program. New and growing retailers in Arlington Heights can receive a rebate of up to 50 percent of the local sales tax that they generate to reinvest in their business.
Arlington Heights offers an exceptional quality of life, starting with education. The community features five schools that have been awarded National Blue Ribbons in the past 10 years, while Robert Morris University offers a satellite campus in the community as well. The Arlington Heights Memorial Library is regularly ranked among the nation’s best public libraries for its size and has been given “five stars” by Library Journal, the publication’s highest rating. The community also is served by the Arlington Heights Park District and its 50+ public parks, as well as Northwest Community Healthcare which continues to expand its operations and services and was named by U.S. News and World Report as one of the 15 best hospitals in the state of Illinois.
Arlington Heights features a unique, vibrant and award-winning Downtown offering an enticing urban lifestyle with single-family and multi-family living, and more than two dozen shops and boutiques. It is home to nearly 40 one-of-a-kind ethnic and individually-owned restaurants. Downtown Arlington Heights also is a Chicago area destination for entertainment, hosting outdoor concerts and year-round events. Other local venues include Hey Nonny and Big Shot Piano Lounge, two great spots for live music and elegant dining in classy and cozy environs. Meanwhile, the Metropolis Performing Arts Centre offers top-notch concerts, comedy and live theater in an intimate setting.
With an exceptional quality of life, wealth of amenities and unparalleled access throughout the Chicago area, Arlington Heights is primed to continue to grow and thrive. For more information, visit www.discoverarlington.com.
WHEELING: PRIME LOCATION FOR GROWTH
Wheeling is a growing and prosperous community of 40,000, distinguished by its unique balance of industrial, commercial and residential developments. Encompassing a blend of national retailers, restaurants, corporations and independent family-run businesses, Wheeling is known regionally for its “Restaurant Row” district along Milwaukee Avenue, which features an eclectic array of dining and entertainment options for residents and visitors. Wheeling also is a member of the Chicago North Shore Convention & Visitors Bureau, which markets Wheeling’s dining and hospitality offerings. With all of these great facts presented, below is a highlight for some of the noteworthy projects that have taken advantage of Wheeling’s desirability.
The new $110 million Wheeling Town Center is located in the heart of Chicago’s prestigious northwest suburbs. This transit-oriented development serves as Wheeling’s downtown, adjacent to the 100-acre Heritage Park, Wheeling Metra Station and municipal campus. Over 1,000 luxury apartments are within walking distance of the Wheeling Metra Station.
The Wheeling Town Center features 301 luxury apartment units and 100,000 square feet of retail space anchored by a movie theater, signature restaurants, fast-casual restaurants and specialty stores. The project is a joint venture between WTC, LLC and the Lynmark Group. A few remaining parcels are available for lease.
Directly north of the Wheeling Metra Station, Uptown 500 is near completion. This transit-oriented, mixed-use development includes a 321-unit luxury apartment building and 12,000 square feet of ground floor retail. Residential leasing, which began in early 2020, is off to a strong start. The units have been attracting young professionals, while also catering to a growing interest for those downsizing and looking for maintenance-free residences close to the train station, restaurants and service amenities.
Northgate Crossing, which is immediately north of Uptown 500, was completed in 2017, and features nine three-story buildings with 32 units per building, as well as attached garages, a clubhouse, walking trails and other amenities. These projects complement the community’s Downtown Station Area Plan, which calls for a concentration of multi-family housing along with mixed-use commercial and residential development in proximity to the Wheeling Metra Station.
As Village President Pat Horcher says, “The mission of the Village of Wheeling is to provide all residents and businesses of the community with high quality public services. The Village Board has been very aggressive with business attraction programs and business incentives for new, large-scale development.”
Less than a mile west of the Wheeling Town Center, a new development will be taking shape. London Crossing will be developed by Wingspan Development Group and will include 55 row homes and approximately 33,000 square feet of commercial/retail space. According to Vice President of Development Christopher F. Coleman, “Residents will enjoy the proximity to employment, shopping and dining. When you combine a great location with great design and great Village support, you get a great outcome.”
With these major projects at various stages of development, the Wheeling community continues to experience growth. The Village of Wheeling is working proactively to secure more projects and businesses to serve its residents, visitors, surrounding communities and the existing business base. Wheeling’s Village Board recognizes the contributions made by its businesses and the partnership that is required between the Village and its business community.
A major element that differentiates Wheeling from its neighboring northern and northwest Chicagoland communities is that it co-owns the Chicago Executive Airport. The corporate aviation business at Chicago Executive Airport is experiencing an economic boost as new hangar facilities and other amenities are being constructed, including a U.S. Customs Office.
Immediately west of Chicago Executive Airport, the Panattoni Development team was drawn to the proximity of the Airport. The $13 million project broke ground in June 2019 and the 162,000-square-foot spec industrial is near completion. The developer is targeting distribution, warehousing, logistics and light manufacturing uses for the property. With a low industrial vacancy rate, the new development will attract tenants looking for modern buildings. Wheeling contains nearly 14 million square feet of industrial space and one of the top manufacturing employment concentrations in the state of Illinois.
Economic Development Director Patrick Ainsworth stated, “Watch Wheeling continue to capture new business and development projects as our geographic location, the skilled and educated workforce, our commitment to exceptional service and our passion to work with everyone all comes together to make this the best community to build, invest, open and thrive in. While we have a lot of great projects taking place, there are various opportunities for new investment that exists throughout the Village.”
Wheeling’s strategic location, the Village Board’s pro-business commitment and economic development incentives place Wheeling in a position to continue to thrive. For more information, visit www.wheelingil.gov/business.
A grocery store will soon operate in downtown Mount Prospect as part of the Maple Street Lofts mixed-use development under construction along Prospect Avenue.
Wingspan Development Group, a Mount Prospect-based real estate development company, announced today (Friday) that it has secured a long-term lease with Angelo Caputo’s Fresh Markets, a family-owned grocer.
Caputo’s will occupy the entire ground-level retail space in the newly constructed Maple Street Lofts luxury apartment building. The lease with Caputo’s brings a long-desired grocery store concept to downtown Mount Prospect.
“Angelo Caputo’s Fresh Market is an exciting addition to our Maple Street Lofts development and gives the Mount Prospect downtown district a highly sought-after amenity,” said Chris Coleman, Wingspan’s vice president.
Robertino Presta, CEO of Caputo’s, shares Coleman’s enthusiasm: “We know the residents of Mount Prospect have been asking for something like this in the downtown for a long time and my family is thrilled to be part of Maple Street Lofts.”
Maple Street Lofts, located at Prospect and Maple Street on the south side of the Union Pacific Northwest line railroad tracks, is a $125 million redevelopment that will include 257 luxury rental apartments, 15,000 sq. ft. of retail space, 56 rowhomes and a new municipal parking garage.
Original Article: https://www.journal-topics.com/articles/grocer-to-fill-ground-floor-of-new-mount-prospect-mixed-use-development/
Nearly 60 acres of vacant farmland on South Timberline Road are slated to become a 205-home subdivision.
A hearing officer for the city of Fort Collins recently approved the development proposed by Fort Collins developer JD Padilla.
The site would be developed into 205 single-family lots with 151 single-family detached and 54 single-family attached homes, according to plans filed with the city.
The 57-acre triangular parcel owned by the Harry O. Rennat Trust and Ingrid M. Rennat Family Trust has small frontage along Timberline Road across from Bacon Elementary and Zephyr Road in southeast Fort Collins. It is just south of the Hansen property slated for development and just north of the Crowne at Timberline apartments.
Access to the property would be served by a public street connection from the Hansen property and an extension of Zephyr Road and Rosen Drive to the south and east, according to plans.
No homes can be occupied before the road extensions are complete, according to the approval.
COST OF LIVING: Data shows Fort Collins residents saving under utilities' time of day rate structure
The site is adjacent to two other residential projects working their way through the city's planning and development review process.
Wingspan Development Group, an offshoot of Denver developer Kephart, has proposed 240 apartments on 10 acres of the Hansen Farm northwest of the intersection of Timberline and Zephyr roads. It is adjacent to 55 acres the Landhuis Co. plans to develop into 184 single-family detached and attached homes on 55 acres of the Hansen Farm.
A future development phase includes a proposed neighborhood park, split between the Rennat and Hansen properties.
The Rennat property is among a handful of sites Padilla is developing throughout Fort Collins, including The Wyatt, 366 apartments on the southwest corner of Harmony and Strauss Cabin roads. He owns the property just east of The Wyatt at Harmony and I-25 and is planning more apartments. He is also planning Morning Star, a senior-living complex in Old Town Fort Collins at North College Avenue and Cherry Street.
Pat Ferrier is a senior reporter covering business, health care and growth issues in Northern Colorado. Contact her at email@example.com. Please support her work and that of other Coloradoan journalists by purchasing a subscription today.
Oak Creek apartment plan and a neighboring commercial project make up another big development near Ikea
A large Oak Creek apartment development, and a neighboring commercial project, are proceeding — collectively making up another major project near the new Ikea store.
The 300-unit Hub13 apartment community will be developed on 33.6 acres at 7581 S. 13th St. That site is just east of I-94, and about two blocks north of West Drexel Avenue.
Mt. Prospect, Illinois-based Wingspan Development Group LLC plans to begin construction this spring on Hub13. The $57 million development's site plan was approved Tuesday night by the Oak Creek Plan Commission.
Wingspan plans to build six three-story buildings, each with 40 units, as well as three two-story buildings, each with 20 units. The monthly rents will range from $1,050 to $2,500, with the units ranging from studios to three-bedroom apartments.
The development also will feature a clubhouse with a leasing office and in-ground swimming pool near the entrance on South 13th Street.
Hub13 will take about 20 months to complete, said Jason Macklin, Wingspan's director of development.
Wingspan chose the site in part because it's in a community with a good quality of life and decent job growth, Macklin said.
Hub13 will be close to Drexel Town Square, a newer mixed-use development that includes several new stores and restaurants at Drexel and Howell avenues, and Ikea, which opened in 2018 just west of I-94 and north of Drexel Avenue.
Also, two hotels are to be developed just south of Ikea: a 121-room Homewood Suites by Hilton and a Tru by Hilton, with 90 to 100 rooms. Construction on the Homewood Suites is to begin this spring, with completion by summer 2021.
"All of these projects are amenities for our future residents," Macklin said.
Meanwhile, Hub13 will be just north of Highgate, a commercial development that is to have seven buildings totaling around 146,600 square feet.
Highgate will be anchored by a neighborhood hospital operated by Froedtert & Medical College of Wisconsin.
Other planned uses include stores, a restaurant and a Summit Credit Union branch. The $35 million development will be on 27 acres at 7781 S. 13th St.
Brookfield-based development firm Somerstone LLC has started grading that site, with parcels to be ready for construction by summer, said Andrew Vickers, Oak Creek city administrator.
Macklin said Wingspan has been communicating with Somerstone about coordinating pedestrian and car access between the two projects.
"We believe Highgate will be an amenity for our residents and vice versa," Macklin said.
Tom Daykin can be emailed at firstname.lastname@example.org and followed on Instagram, Twitter and Facebook.
Jade at North Hyde Park includes a five-story, 192-unit apartment building and on-site garage as well as a restaurant or retail store.
By: D'Ann Lawrence White
TAMPA, FL — Commercial real estate company Marcus & Millichap announced the sale of the 1.85-acre North Hyde Park Development Site for $3 million.
The North Hyde Park Development Site is located at 608 N. Willow Ave. The property was purchased by Wingspan Development Group, which plans on creating Jade at North Hyde Park, a five-story, 192-unit apartment building with an accompanying on-site garage with 297 parking spaces. Jade is also slated to include a 3,100-square-foot storefront for a restaurant or retailer and an 895-square-foot outdoor patio.
Jade will also feature resort-quality amenities and high-end finishes including a 24-hour fitness center, swimming pool with poolside club and outdoor kitchens, gathering lounge, cyber cafe, conference room, bike storage and repair, resident storage lockers, electric car-charging stations, in-unit washer/dryer, quartz countertops, energy-efficient stainless steel appliances, tiled back splash, programmable thermostats and private patios or balconies.
Construction is anticipated to begin the first quarter of 2020.
"The Tampa urban core continues to be a development hotbed as demand outpaces supply by a wide margin leading to formidable rents," said Casey Babb, an investment specialist in Marcus & Millichap's Tampa office. "Recent sales activity in downtown Tampa of more than $300,000 per unit for mid-rise and upwards of $440,000 per unit for high-rise further bolsters the appetite for developers in spite of all-time high construction costs."
Multifamily developers can’t keep up with the burgeoning demand for rental units in the Chicago metro area. For the second year in a row, the number of units absorbed by local renters will outpace new completions, according to Marcus & Millichap’s new Q4 market report.
Much of the demand is coming from prospective tenants who want either downtown apartments or units along the train lines that radiate out from the central business district, demand fueled by the continuing expansion of the city’s downtown office market, Marcus & Millichap added. The successful leasing seen so far at 601W Cos.’ Old Main Post Office, where Uber Freight and Walgreens recently agreed to occupy significant amounts of space, is just one illustration of how the CBD seems primed for even more growth.
"Sustained employment growth in the core continues to benefit apartment owners, supporting strong [net operating income] growth as the average effective rent has climbed more than 10% over the past two years,” Marcus & Millichap said.
Developers are on track to finish about 9,100 new apartments in the metro area this year, matching the cyclical high of 2018, and a boost over what had been forecast earlier this year, but roughly 12,000 units will have been absorbed, the firm found. That is sending the vacancy rate toward a historic low, and significantly pushing up rents every quarter.
The overall vacancy rate fell 60 basis points in 2018, and by the end of 2019, will have fallen another 40 basis points to 4.9%. The average effective rent should hit $1,582, a 6.6% increase, which follows a 5.9% gain in 2018.
A roaring multifamily market is no longer just an urban phenomenon. Developers completed about 12,000 suburban units in the past three years, according to Marcus & Millichap, but the area’s vacancy rate remains stubbornly low as renters priced out of the urban core fill up apartments as fast as developers can build them.
“Exceptional absorption will keep developers in Chicago focusing on areas near major employment hubs, particularly in the urban core and some northwestern suburbs,” the firm said.
In the suburbs, vacancy by the end of the third quarter decreased 50 basis points on an annual basis to just 3.9%, tying a cyclical low, and in Lake County/Kenosha dropped 60 points to 3%.
“The average effective rent in Chicago’s suburbs increased 4.3% since September of last year, driven by a 10% boost in Aurora,” the firm added.
The only real cloud on the horizon is the growing disconnect in the expectations of sellers and investors, many of whom expressed fears about reforms introduced by Cook County Assessor Fritz Kaegi, and the possible impact on property taxes. That pushed transaction volume down 19% over the past year.
By John Jordan
CHICAGO—Bolstered by strong leasing activity, the industrial vacancy rate for the Chicago region in the third quarter dropped to 4.9%, besting the 19-year record low of 5% recorded set in the second quarter of this year.
According to a report released by Cushman & Wakefield, third-quarter leasing activity totaled 25.9 million square feet, nearly half of which was concentrated in the Interstate 55 and Interstate 80 corridors, as well as southeast Wisconsin.
The average asking net rent in the Chicago region remained essentially unchanged from the second quarter, at $5.42-per-square-foot, above the year-earlier figure of $5.34-per-square-foot. The region scored the 35th consecutive quarter of positive absorption at 6.8 million square feet.
“As we head into the final months of 2019, signs point to yet another year of growth for Chicago-area industrial activity,” says Jason West, vice chair, on Cushman & Wakefield’s Chicago industrial team. “Firms like Crate & Barrel, which recently reported that nearly half of its sales are now online, continue to drive demand for large-scale distribution centers with easy access to consumers.”
He adds, “We’ve already seen more of these big-box deals in 2019 than during the same period last year, and with several others expected to close by year’s end, we’re confident in the market’s ability to absorb the new supply.”
In the report, Cushman & Wakefield states that eight new big-box leases of more than 500,000 square feet were executed in the first three quarters of 2019, compared with four for the same period in 2018. Additional transactions expected to close in the fourth quarter will likely keep big-box leasing volume ahead of last year’s levels, according to the report.
“Many of these big-box users are increasingly exploring how automation can improve their bottom line, which helps explain the need for larger buildings with increased power loads, higher ceilings, expanded loading and trailer parking and other features that are not only in demand, but expected,” West says.
Construction activity remained strong across the market in the third quarter, with year-over-year completions totaling 14.8 million square feet, a 56.5% increase from third-quarter 2018. An additional 17.8 million square feet is under construction, nearly 60% of which is being built on a speculative basis, Cushman & Wakefield reports.
By: Steve Zalusky
Mount Prospect will put an additional $200,000 into the 20 West development for public improvements.
Mount Prospect has already committed $2 million in incentives to the $23.5 million mixed-use project, which includes 73 luxury apartment and a two-story restaurant, at 20 W. Northwest Hwy. The funding comes from the Prospect and Main tax increment financing district.
The village board amended its redevelopment agreement with the developer, 20 West LLC, to authorize the expenditure Tuesday after Public Works Director Sean Dorsey told trustees plans have changed since the village approved the deal in March 2018.
"Some of the quantities and, in fact, some of the specifications and some of the materials are different at this point in time. As a consequence, there is a greater expense," Dorsey said. That includes $152,000 for more brick pavers, which will be clay-fired as opposed to the concrete the village is accustomed to using.
"One thing that we have noticed of late is early failure of the concrete pavers. That is, the salts and chlorides have eaten away at the concrete pavers, causing them to fail," Dorsey said while holding a deteriorated brick.
Given the amount of plowing and salt usage expected, the clay-fired brick solution is more effective, he said.
The brick pavers, Dorsey said, will help with stormwater control by holding back the first inch of rainfall before it percolates into the ground.
The village also will spend an extra $32,000 to change the location of a water main connection and increase the size of pipes for better flow, as a benefit for fire protection, he said.
Trustees were more agreeable to the changes because they came at the request of the village rather than the developer.
"If it was the builder that decided to do this on his own, I wouldn't think I would give it to him," Trustee William Grossi said. "But if it's the village saying we want this, we want more pavers, we want a different kind of pavers, it's justifiable in my eyes."
Chris Coleman of the Wingspan Development Group, speaking on behalf of 20 West LLC, said the development is expected to open in November.
Chris Coleman, VP of Development at Wingspan, periodically shares his thoughts and observations on property development news.