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New Strategies Emerge as Chicago Awaits Absorption

CHICAGO-Local office and industrial markets will not likely see new development, so the continuing cycle should bring better leasing and hopefully better rents, said RealShare panelists.

By Robert Carr | Updated on June 15, 2011

CHICAGO-As the city recovers from the economic downturn, the panelists at the RealShare CHICAGO conference Wednesday pointed to many new factors to consider going into the new decade. Baby Boomers look to boost medical office and seniors housing, young people look to bolster the apartment market and office and industrial will continue to slowly recover, they said – though the growth is, while much welcomed, seeming faster than expected and hard to trust.

“What a difference a year makes,” said Rick Sinkuler with Ernst & Young, who was a speaker on the conference’s Industry Leaders panel Wednesday morning. “Who would have thought we’d be doing deals at 5% cap rates and 70% loan-to-value. But we still have to be cautious, there’s still a lot of headwinds. We can’t get out of this 9% unemployment, prices for goods are high, and about 25% of mortgages are underwater.”

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