CHICAGO—Researchers have been releasing a host of studies and predictions about where Amazon will locate HQ2, the North American office market's Holy Grail. Hamilton Place Strategies just released its own analysis, and if the Washington, DC-based consultancy is correct, things are not looking good for the Midwest.

HPS identified and examined 11 metrics in four categories for all 19 US cities in the running. The four categories were transportation, education, business, lifestyle and culture, and connectivity. Indianapolis and Columbus were hurt by a lack of international airports and adequate mass transit, and had below average livability and diversity. Each scored twos out of a possible 11. Chicago was considered a very average six. The city won points for its great transportation and nationally-ranked universities, but suffered from a below-average business environment.

Washington, DC was the top choice with an overall score of 10. HPS felt the city had the nation's best-educated workforce, and one of the best transit systems. Boston came in second place, largely on the strength of its unparalleled higher education. Significantly, Northern Virginia came in third at 8.5, and on the other side of Washington, Montgomery County scored a solid eight, putting it on the same level as Newark and New York City.

HPS did not consider Toronto, nor did it factor in all the goodies that the US cities have promised Amazon if they get the nod. Newark and its partner New Jersey, in particular, seem eager to hand Jeff Bezos anything he could want in terms of subsidies. I'm skeptical such factors will be that important to each site's long-term value.

But I do feel other, hard-to-quantify considerations could have an impact. Having a major presence in the nation's capital would be irresistible for someone who wishes to have a bigger say in how the country is run. That's a good description of Bezos, who also owns The Washington Post.

Still, next week will almost certainly bring another study with different results.- Brian J. Rogal

BY THE NUMBERS

CHICAGO—Chicago's CBD office market remained strong in the fourth quarter of 2017 with a direct vacancy rate of 12.26% and 177,463 square feet of positive absorption, according to MBRE's fourth quarter market overview. Total absorption for the year was 924,580 square feet, while the direct vacancy rate increased by 91 bps from 11.4% at the end of 2016 due to increased inventory. There were 14 large new deals and 13 large renewal, expansion, and sublease deals signed in the fourth quarter of 2017. The largest new deal was the Chicago Tribune and its parent company Tronc's lease of 137,137 square feet at Prudential Plaza. Chicago's CBD sublease market decreased by 491,918 square feet in the fourth quarter, bringing the total amount of available sublease space down to about three million square feet. This is the fifth quarter in a row that the sublease market has contracted after reaching a seven-year high in the third quarter of 2016.

CHICAGO—January home sales in the metropolitan Chicago area declined slightly from the prior year's pace, as colder weather and a shrinking selection of homes for sale suppressed market activity, RE/MAX reports. Nonetheless, demand for homes remained solid, as demonstrated by rising home values and faster sales times. Home sales in the seven-county metro area totaled 5,707 units in January, 6.9% less than the same month last year. The median sales price gained 7.1% to $225,000. Total listings fell 8.6% compared to the year-earlier level. “The impact of low inventory was apparent throughout the second half of 2017, and we expect it to have a similar effect going forward unless inventory expands,” says Jeff LaGrange, vice president, RE/MAX Northern IL Region. “The number of homes for sale in the Chicago area was 20% lower at the end of January this year than at the same point in 2016.”

NEWS & NOTABLES

CHICAGO—Interra Realty, a Chicago-based commercial real estate investment services firm, just promoted Patrick Kennelly from director to managing partner, and also hired three additional employees to bolster the firm's brokerage and marketing teams. “Patrick is a consummate real estate professional with a deep financial background that complements his knowledge of Chicago's commercial market,” says David Goss, co-founder and managing principal of Interra Realty. As an agent at Interra since 2014 and director for more than two years, Kennelly specializes in multifamily and mixed-use sales in the Chicago area while representing a large variety of property owners, developers, lenders and investors. Interra now operates with a staff of 19 working out of its River North headquarters. The three new employees are: Bill McNamara, a brokerage director who helped launch Apartments.com; Harrison Pinkus, a native Chicagoan and associate broker who previously worked at Colliers International; Jessica Langner, a marketing director who previously was marketing coordinator at Newmark Knight Frank.

DEALTRACKER

ATHENS, OH—Triad Real Estate Partners has just sold Carriage Hill Apartments, a 337-unit, 536-bed mixed income affordable and student housing property just off the campus of Ohio University in Athens, OH. The property was built in two phases between 1967 and 1970 with a mix of studio, one, two and three-bedroom units. There was a HAP contract for 84 units in Phase II of the project and both phases were encumbered with existing HUD loans. “The property suffered from a bit of an identity crisis, being a predominantly market rate housing catering to Ohio University students and staff but also with an affordable component,” the company says. The new owners, New York-based Emet Capital Management, intend to complete a substantial renovation and rebranding of the property. The seller was Columbus-based Wallick Communities and the purchase price was undisclosed. As part of the sale, Triad donated a portion of the proceeds to Resident Resources Network, a non-profit with a mission of connecting affordable housing residents to support services.

CHICAGO—ML Realty Partners has just signed a 210,315 square foot, long-term lease with Holly Hunt Enterprises, Inc. at 9450 Sergo Dr. in McCook, IL, a Chicago suburb. Holly Hunt designs and manufactures high-end furniture, lighting products, textiles and leather products. Company officials say this building is ideal for their expansion due to the McCook area labor force, and convenient access to several major highways and the City of Chicago. Vern Schultz and Mike Senner of Colliers International represented Holly Hunt and Jason West, Sean Henrick and Larry Goldwasser of Cushman & Wakefield represented ML Realty Partners in the transaction.

BUILDING BLOCKS

CINCINNATI—CBRE Group, Inc. is listing an enormous industrial site in the heart of the Northern Kentucky Airport submarket. Hillwood and its partner Al Neyer are building the Erlanger Commerce Center on this highly visible site located right on I-75 and I-275 in Erlanger, KY, just five minutes from Cincinnati/Northern Kentucky International Airport, which features two large cargo hubs. “It's rare to find sites of this size and scale that give you great interstate access and economic incentives in proximity to our local workforce,” says Mike Lowe, senior vice president. The park comes with a unique fixed 30-year pilot agreement already in place: $0.11/square feet in lieu of typical real estate taxes, he adds. The current site plan calls for two cross-docked modern industrial buildings. Building one is currently under construction and will feature 36' clear height and total 779,720 square feet on 59.1 acres. Building two is a planned 1,000,329 square foot bulk warehouse facility with 36' clear height.