NAFTA’s unexpected impact on Illinois

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Representatives from Canada, Mexico and the U.S. recently entered into the fourth round of negotiations on the North American Free Trade Agreement. While interests are wide-ranging and competing, the major focus has been on “rules of origin,” which look at the location breakdown of where products are manufactured to determine trade statistics, procurement and preferential treatment.

As negotiations continue, the State of Illinois, its economy and its real estate could be affected in good, bad and surprising ways:

The singularity is near

NAFTA

While some argue that the U.S. has lost 350,000 manufacturing jobs since 1994 due to trade with Mexico, others note this decline started well before NAFTA began. Tracking employment against manufacturing output is the most telling, as we’re seeing a sharp increase in productivity, despite fewer jobs. The answer: Robots and automation are making U.S. manufacturing more efficient. It’s not “Westworld,” but maybe it’s not far off..

Illinois is increasingly exposed

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JLL’s Guide to Open House Chicago 2017

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Open House Chicago 2017

Thousands upon thousands of architecture buffs and urban explorers will descend upon the city this weekend for the Chicago Architecture Foundation’s Open House Chicago, which offers behind-the-scenes access to more than 250 buildings across the city on Saturday and Sunday from 9am to 5pm.

JLL Chicago is proud to have eight of its buildings under management participating in this free public festival. Enjoy this handy guide to our buildings and get to know a member of each management team along the way. Hope to see you there!

AMA Plaza – 330 N. Wabash
General Manager: Susan Hammer

Open House Chicago 2017

How long have you worked at your property? How long have you worked in the industry?
I have been a property manager for more than three decades. I’ve spent the last 14 years at AMA Plaza.

Describe a “Day in the Life.”
Each day is different with new opportunities, including solving tenant needs, responding to client requests, financial reporting and accountability, overseeing major repair or capital projects, supervising service providers and creating a supportive and dynamic environment for members of the management team. We have a complex business and operational relationship with The Langham Chicago, housed on the first 13 floors of the building, and that has led to some interesting experiences. For example, several pop and rock bands stay there, and hundreds of people are suddenly waiting on the plaza for a sighting. We have had to sneak a couple of groups through the dock because of that.… Read More

Take a dose of data and call me in the morning

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data

As we all know, any prescription from a healthcare provider comes with directions and dosage amount. Let’s swallow some bitter pills:

  • 40 percent of a hospital’s balance sheet accounts for real estate
  • Only 1:3 healthcare systems thoroughly evaluate the impact real estate has on profitability
  • There are 1.68 million hospital beds in the U.S., a number that’s steadily shrinking

“Without using a data-driven approach to real estate, healthcare systems are leaving millions of dollars on the table that could be used to elevate patient experience and quality of care,” says JLL Senior Managing Director Greg Gerber, Healthcare Practice Group lead.… Read More

Overheard at NAIOP CRE Converge 2017: Top trends and takeaways

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We were on the scene at NAIOP CRE Converge today, and the common theme was the inevitability of technology and its increasing influence on the commercial real estate industry and beyond. In addition to a podcast recap from our hosts of Real Time, JLL Chicago’s Industrial podcast, we’ve pulled together top future-state tech trends.

Listen to this podcast with the player above or click here.

Post to LinkedIn | Podcast archives | Subscribe

Autonomous vehicles

How will autonomous vehicles impact parking requirements and more fundamentally, how we view space? With blockchain technology and macro integration of data, we will be able to view individual properties and sections of cities and towns. Consider the city a body and all the external factors (autonomous vehicles, social norms, etc.) organs. In order to understand how the body functions, you need to have a grasp on each organ and how they interrelate, and technology will help us do that. Eventually that will lead to smarter decision-making when constructing, leasing, managing and selling.… Read More

Two million-square-footers in I-80?!

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industrial stats

Welcome to Episode 8.5 of Real Time, JLL Chicago’s industrial podcast. In this episode, the team previews the Chicago market’s third quarter industrial statistics, breaking down everything from vacancy and absorption to investment sales and intermodal traffic. The highlights:

  • Vacancy’s up, but the good news is it’s due to spec deliveries
  • Two million-square-footers going up in I-80 – that’s never happened before!
  • A million-square-foot deal remains elusive this year, but things are ramping up post summer slowdown
  • Intermodal traffic is up, which is a positive sign for big box demand

Keep your eyes peeled for a detailed submarket report in the coming weeks!

Hosted by: Industrial market research experts George Cutro and Chad Buch

Listen to this three-minute podcast with the player above or click here.

Full Q3 2017 Research report here.

Post to LinkedIn | Podcast archives | Episode transcriptRead More

Project Profile: Readerlink build-to-suit

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Print sales are hot, with the industry seeing its third straight year of sales growth in 2016. In fact, distribution networks require more sophistication than ever as booksellers strive to meet the immediate and highly specialized demands of their customer bases.

Click below for our Project Profile on Readerlink, the largest full-service distributor of hardcover, trade, and paperback books to nontrade channel booksellers in North America.

Readerlink

Identifying the Salt Lake City area as the consolidation of its Western U.S. distribution network, Readerlink tapped the JLL team to identify a hub facility. With nothing existing on the market, our Build to Suit Practice Group assembled a cross-functional team, from financing experts to project management pros, to assess the viability of a build-to-suit assuming a long-term lease and Readerlink’s credit.

Building a 500,000-square-foot distribution center in the middle of a brutal Salt Lake City winter is challenging enough. Making the entire process financially viable while shifting delivery and budget risk (including winter conditions) onto the developer and landlord was critical.… Read More

Location, location…logistics: On the road at RidgePort Logistics Center

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RidgePort Logistics Center

Welcome to Episode 8 of Real Time, JLL Chicago’s industrial podcast. In this episode, our team hit the road for the topping off of Building Charlie, the latest spec project at RidgePort Logistics Center in Wilmington:

  • Ridge Development Executive Vice President Aaron Martell tells us how the park came to be
  • Elion Partners Managing Principal Shlomo Khoudari shares his vision of a mixed-use destination with amenities unrivaled at any business park
  • JLL Managing Director Keith Stauber explains the stability of long-term park ownership
  • BNSF Railway Regional Manager of Economic Development Eric Pitcher reminds us why rail is key for any logistics network

Fast facts on RidgePort Logistics Center:

  • 2,200 acres capable of accommodating 22+ million square feet of industrial development
  • Nearly 150,000 square feet of commercial development on its way
  • Located at the intersection of I-55 and Lorenzo Road in Wilmington
  • Rail-served on the BNSF transcontinental main line
  • Proximity to the largest inland container port in North America

Hosted by: Industrial market research experts George Cutro and Chad Buch

Listen to this podcast with the player above or click here.

Post to LinkedIn | Podcast archives | Episode transcriptRead More

Headquarters quiz: Five clicks to your new crib

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Since 2008, downtown Chicago has attracted 88 suburban and 13 out-of-market companies, of which 32 have been headquarters relocations. If your company is thinking of making the move or you’re just curious about new neighborhoods, take this headquarters quiz and land on the best submarket for your team!

 

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The Hidden World of Retail Shipping and Delivery – Part 2

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retail shipping

Welcome to Episode 7 of JLL Chicago Industrial – Real Time, our Industrial Research podcast. In this episode, Part 2 of a special crossover with our sister retail podcast, Where We Buy:

  • Why grocery shopping online is more popular in China
  • Startups are sending furniture and mattresses online, to the delight of the logistics industry
  • When brick and mortar locations become key to a retailer’s omni-channel marketing strategy

Hosted by: Industrial market research experts George Cutro and Chad Buch

Featuring: National retail expert James Cook and industrial pro Aaron Ahlburn


Listen to this podcast with the player above or click here.

Listen to Part 1 of our special crossover podcast on Where We Buy, here.

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Attaining Triple Aim: How healthcare can leverage real estate

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triple aim

In today’s capital-constrained environment with shrinking reimbursements from insurance companies, health systems are rethinking their business models by rethinking their real estate footprint.

“Bold, sweeping changes are a mandate for today’s health systems,” said JLL Senior Managing Director Greg Gerber. “Especially in competitive markets with numerous high quality systems vying for market share and operating at a high complexity level.”

Created by the Institute for Healthcare Improvement in 2008 as a roadmap toward value-based care, the “Triple Aim” has three mandates: improving patient experience, improving health of populations and reducing per capita cost of care. We explored the challenges, opportunities and surprising role real estate plays in each area with our Healthcare Practice Group.

Improving patient experience

In an outcomes-driven, performance-based reimbursement model, patient experience is critical and convenience is key. Locating facilities “closer to home” for patients is a surefire way hospitals can expand patient access and optimize their real estate footprint, reinvesting the savings in their core services.

“On the hospital campus, you’re talking about high-cost acute care. By taking healthcare into the community, you are reducing costs and making it easier for patients to stay proactive and healthy,” said Senior Vice President Sarah Cogswell.… Read More

Solar eclipse markets outperform national averages

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Chicago may not fall in the path of totality on Monday, but we’re still excited to witness this historic solar eclipse. In anticipation, we reviewed office vacancy rates and rent growth in “eclipse markets” and were impressed to see most markets outshining national averages.

solar eclipse

Dig into our latest Chicago market office stats here.

Why move your headquarters? Top CEOs speak out

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While corporate real estate strategies are definitely one-size-fits-one, headquarters relocations seem spurred by surprisingly similar reasons. We wouldn’t call this kind of groupthink a bad thing, rather a natural reaction to a global demographic shift. You can’t ignore more than one million people moving into cities every week.

We analyzed the corporate press releas es associated with Chicago’s 32 headquarters relocations since 2008, paying close attention to quotes from each CEO. These leaders have waxed philosophic, strategic, straight up practical and everything in between in their commentary, offering a glimpse into larger pushes for organizational change and innovation.

Our word cloud above sizes words based on how frequently they’ve been used by CEOs. Roll your mouse over each word to see a sample quote and we’ll dig into the top reasons for moving below.… Read More

Budget backlash for Illinois industrial? Nope…

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budget

Welcome to Episode 6 of JLL Chicago Industrial – Real Time, our Industrial Research podcast. In this episode:

  • Sure, taxes are up, but there are more positives than we think
  • Illinois isn’t the only state grappling with significant long-term obligations
  • Investors can’t ignore Chicago’s universal truths as the nation’s transportation hub, second-largest industrial market by square footage and largest inland port

Hosted by: Industrial market research experts George Cutro and Chad Buch

Featuring: Research and economics pro Christian Beaudoin

Listen to this 10-minute podcast with the player above or click here.

Know someone who’d like to listen? Post to LinkedIn.

Interested in hearing more industrial real estate insights? Listen to all podcast episodes here.… Read More

The MTV Generation grows up: Generation X as CEO

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“A person should not believe in an -ism, he should believe in himself.” –Ferris Bueller

Generation X grew up unsupervised, independent and decidedly anti-establishment. This small, often overlooked cohort entered the corporate world with little fanfare but a wildly different attitude, shirking preconceived notions of work and traditional business dogmas.

Bringing an entrepreneurial mindset to Corporate America has been a major Gen X contribution, bolstered by fluency in technology, prioritization of work/life balance and a fierce pursuit of individuality. Now entering the leadership roles of the C-suite, this generation is the innovative force behind today’s workplace trends—especially their companies’ defining headquarters moves.… Read More

Cracking the code: Find your tech talent in Chicago

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Looking to snag a computer programmer on sale? Chicago should be your startup’s tried and true market of choice, given its status as the rare, affordable, large urban market.

“Competition for tech talent, as well as good plug-and-play tech spaces, is fierce,” said Jesse Van Dyke, Managing Director and co-lead of JLL Chicago’s Technology Practice Group.

tech talent

Concentration of employees working in the computer field

The market’s tech ecosystem can be the best indicator of potential job growth and industry stability. Consider planting your tech flag in Chicago, a great location at a great price:… Read More

Top 10: Stop hating Mondays, your happiness at work matters

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Human Experience

Yesterday our Suburban Tenant Representation team hosted a webinar exploring the Future of Work and how Human Experience plays a critical role in shaping a productive culture. In other words, it pays for your company to invest in your satisfaction.

“Understanding real estate’s financial and operational performance is now table stakes,” said JLL Managing Director Ed Nolan. “How people feel about work plays a key role in promoting engagement, empowerment and fulfillment at the office.”

In the midst of tenants’ intense focus on reducing gross rent and utilities costs there lies a missed opportunity to harness human capital.

“Even minor improvements in employee productivity and retention can spur double-digit savings in costs per square foot and strategically drive real estate decisions,” said JLL Managing Director Ben Erskine.

Our top 10 webinar takeaways, based on 18 months of JLL research:… Read More

The Illinois Budget Challenge: Your questions, answered

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Yesterday in Springfield, the Illinois House of Representatives voted to override a veto by Governor Bruce Rauner and to pass a budget that includes spending reductions and state income tax increases. This measure gives the State of Illinois its first formal budget in three years.

The good news

Passage of this budget provides some level of certainty for the companies and individuals that have been delaying decisions based on the state’s spending and taxation proposals. It also provides rating agencies with a better understanding of the state’s plan for meeting its financial obligations.

The tax news

Effective July 1, 2017, individual income taxes will rise from 3.75 percent to 4.95 percent. Corporate income tax rates will increase from 5.25 percent to 7 percent. These increases represent a 33 percent jump in personal and corporate income taxes for Illinois residents and companies.

What will happen to the commercial real estate market in this new environment?

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What does e-commerce want? Power, labor, world domination?

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e-commerce

Welcome to Episode 5 of JLL Chicago Industrial – Real Time, our Industrial Research podcast. In this episode:

  • What retailers want out of their e-commerce distribution network
  • The landlord perspective: The prevalence of build-to-suits to accommodate these facilities’ highly specialized technology and workforce amenity requirements
  • A deep dive into surrounding demographics to enhance retailers’ site selection process

Hosted by: Industrial market research experts George Cutro and Chad Buch

Featuring:

Listen to this 14-minute podcast with the player above or CLICK HERE.

Know someone who’d like to listen? Post to LinkedIn.… Read More

Chicago Property Tax Update: What you need to know

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On June 13, 2017 the 2016 property tax rates, calculated by the Cook County Clerk’s office, were released. This is the final step in the tax process before bills are mailed. The average City of Chicago residential taxpayer should expect to see a roughly 10 percent increase in their property tax bill and commercial property owners (or their tenants) should expect an increase of approximately 9.3 percent in their property taxes.

property tax

1. Average composite tax rates are shown. Actual tax rates may vary. 2. Tax bills based on an average commercial property with a market value of $270,000. Actual tax bills will vary. Source: Cook County Clerk David Orr. Memo dated June 13, 2017.

Tenant implications

While this tax increase was not unexpected, commercial property owners and tenants should be prepared for the implications on their expenses this billing cycle.… Read More

Evolution of the Legal Workplace

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DLA Piper’s David Mendelsohn, Managing Partner, has a message for all the law firms out there looking to revamp their space: “Do not hold back. Be as creative and bold as your firm’s culture allows you to be.”

legal workplace

DLA Piper’s David Mendelsohn said if you want employees to be productive, it’s about starting with clear objectives, knowing what you want to accomplish and then staying committed to those objectives every step of the way.

While the traditional office sector has been at it for years, law firms are beginning to see the value in modernizing their space to stay competitive and attract top talent. With the help of JLL’s Law Firm Practice Group, DLA Piper did just that.

Earlier this year, DLA left its home of nearly 30 years, 203 N. LaSalle, and made its way to River Point, the gleaming 52-story office tower perched at 444 W. Lake overlooking the Chicago River. The move symbolized the global law firm’s commitment to focusing on its people and creating a productive work environment.

So how can other firms like DLA use their real estate to engage and retain employees and remain competitive?

JLL dove into this discussion recently inside DLA’s brand new office and in front of an audience of nearly 100 of Chicago’s law firm leaders.… Read More