Category Archives: Capital Markets

Site Selection Stories: Toyota/Mazda, Part 4

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Toyota Mazda

Over the past few decades, Toyota has been a key player in creating a thriving foreign auto industry on U.S. soil. In 2017, the auto industry giant needed a site for a new, multimillion-square-foot plant. With a hard deadline of going online in 2021, they needed it fast. After years of partnership, our team was already well-versed in Toyota’s priorities, and we mobilized overnight. Our data-driven analyses of real estate, labor and incentives requirements set the foundation for an expedited site search executed with precision.

Click below for our Project Profile on Toyota Mazda’s historic, $1.6-billion investment in a new auto plant in Huntsville, Alabama.

Toyota/Mazda
When Toyota found a like-minded partner in Mazda, this undertaking was elevated to historic proportions, and we pivoted with it. Mazda shared Toyota’s philosophies around innovation and productivity, and both firms stood to benefit from the efficiency of working together in one facility.… Read More

Site Selection Stories: Toyota/Mazda, Part 3

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Toyota MazdaWelcome to the third episode of our new, three-part miniseries, Site Selection Stories: Toyota Mazda. We’re taking you behind the before, during and after of Toyota Mazda’s historic, $1.6-billion investment in a new auto plant in Huntsville, Alabama. Meet the key players:


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

Part 1 | Part 2

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Site Selection Stories: Toyota/Mazda, Part 2

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Toyota/MazdaWelcome to Part 2 of our new, three-part miniseries, Site Selection Stories: Toyota Mazda. We’re taking you behind the before, during and after of Toyota Mazda’s historic, $1.6-billion investment in a new auto plant in Huntsville, Alabama. Meet the key players:


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

Part 1 | Post to LinkedInPodcast archives | SubscribeRead More

Site Selection Stories: Toyota/Mazda, Part 1

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Toyota

Welcome to a special episode of JLL Chicago Industrial – Real Time. Our new, three-part mini-series, Site Selection Stories: Toyota Mazda, will take you behind the before, during and after of Toyota Mazda’s historic, $1.6-billion investment in a new auto plant in Huntsville, Alabama. Meet the key players:


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

Q2 2018 Office Insight: Millennials driving major moves and redevelopments

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Millennials

Across submarkets, Millennials fueled the commercial office market’s robust performance in the second quarter.

As global companies continue to change the complexion of their workforce in favor of digital natives, Millennials are having an increasingly outsized influence on major expansions and headquarters relocations. In 2018 alone, international companies including Rio Tinto, Showpad and iam bank have expanded their Chicago-based North American headquarters. The reason? Illinois is the second-largest producer of computer science graduates in the country.

With Illinois graduates accounting for nearly 10 percent of U.S. computer science degrees last year but only modest tech wage growth locally, Bay Area tech firms and legacy employers alike are seeing Chicago as a necessary outpost, especially for highly technical positions. Most recently, that prompted Walgreens’ to plant its flag at the Old Post Office, establishing a 200,000-square-foot digital hub.

This war for talent has definitely made its way into the development pipeline, with 6.6 million square feet underway. While incremental vacancy increases are likely at this point in the cycle, we’re still seeing rent growth, strong absorption numbers and stable concessions.… Read More

Will robots overtake humans? The Changing Landscape of Industry 4.0

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changing landscape

Welcome to episode 15 of Real Time, JLL Chicago’s industrial podcast. In this special post-event episode, the team recaps JLL Chicago Industrial’s recent client event, “The Changing Landscape of Chicago Industrial Real Estate,” held at Chicago’s first innovation center for physical product development and manufacturing, mHUB. Prognosticating on the future of supply chain, our all-star panel of industrial pros included:

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


Listen to this podcast with the player above or click here. Also be sure to read our event recap below.

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Retail therapy draws tenants to suburban Class A product

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Shopping on your lunch hour never gets old. Especially in the suburbs, where the live/work/play perks of urban density are in short supply. Suburban malls offer the opportunity to run errands during lunch, while also conveniently supporting a wide array of business amenities such as restaurants and event space for everyday meetings and larger corporate gatherings.

Across suburban Chicago, Class A office properties within a mile of a major mall are outperforming their competition in three out of four major suburban submarkets. While the area around Fashion Outlets of Chicago appears to be flagging, JLL Research attributes that to lack of concentrated Class A buildings surrounding the retail center and the size of nearby O’Hare airport.

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Top 10: Finding quality labor during a workforce shortage

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At a recent NAIOP Chicago event, the topic wasn’t real estate; it was labor. February saw the highest monthly level of job creation since mid-2016 and unemployment sits at just 4.1 percent as skilled talent becomes increasingly difficult to recruit and retain.

labor

JLL’s Meredith O’Connor and Keith Stauber

“Job growth continues rapidly even with talent shortages and employment occurring faster than the labor force can expand,” said JLL Managing Director Keith Stauber, moderator. “These trends also mirror consumer confidence, which has been at its highest levels since 2000.”

Greater competition for labor has pushed occupiers to look at long-term workforce productivity and sustainability (including metrics like net migration and population growth) rather than short term affordability.

The NAIOP panel of experts featured JLL International Director Meredith O’Connor, Co-Chairman of JLL’s Headquarters Practice Group and a Business and Economic Incentives lead. Her top 10 takeaways:… Read More

Chicago 2025: In the shared economy, do you know who your customer is?

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Spoiler alert. In the shared economy, everyone’s customer is the end user. The knowledge worker, the talent, the Millennials, whatever you want to call it. At Chicago 2025, JLL Chicago’s marquee event held earlier this month, we heard from some of the industry’s top thought leaders on how they’re navigating the shared economy’s major changes to the way we operate.

shared economy

Panelists John Gavin, Andrea Zopp and Chris Kelly

The No. 1 thing tenants talk about is talent, said World Business Chicago president and CEO Andrea Zopp, which is positive news for Chicago. We’re drawing college graduates at a higher rate than our comparable cities because people are looking for quality of life, affordability and a wide variety of housing options to evolve in an urban environment. And what talent wants is driving both major business decisions and major municipal ones, like Chicago’s investment in Divvy, our bike share program. All employers want is the ability to compete, and Chicago’s diverse economy, connectivity, access to transit, and quality of neighborhoods are all formidable tools for their arsenal. Expect forward-thinking initiatives like the planned express train to O’Hare to go a long way in attracting and retaining our major corporate occupiers.… Read More

Can the market stump JLL Chicago’s industrial experts?

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podcast anniversary

Welcome to Episode 14 of Real Time, JLL Chicago’s industrial podcast. In our one-year anniversary episode, the team fields questions from our valued listeners. The industrial market tried to stump our experts, but were they successful? Listen for a surprise special guest and our hosts’ answers to questions including:

  • What is the definition of infill?
  • What are you seeing in I-55 as far as demand versus current supply?
  • Is commercial property beginning to respond to changes in interest rates and values?
  • If you could put $100 million to work, which submarket would you pick and why?
  • What’s driving the uptick in leasing of 350,000 to 500,000-square-foot properties?

Thank you to all of our guests and listeners for a fantastic first season. It’s been a pleasure sharing our insight on one of the most exciting and active industrial markets in the country. We continue to learn so much from collaborating with all of you. Season Two is going to clear new heights!

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

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

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Chicago industrial sees recommitments and really big portfolio sales in Q1

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industrial

Welcome to Episode 13.5 of Real Time, JLL Chicago’s industrial podcast. In this episode, the team previews the Chicago market’s first quarter industrial statistics, breaking down everything from vacancy and absorption to investment sales and construction deliveries. The highlights:

  • Existing occupiers like Home Depot, Clorox, RJW and Uline are expanding around the market
  • Blackstone and High Street grow their holdings through portfolio acquisitions.
  • Mid-range leasing velocity is robust, with 21 new leases between 100,000 and 500,000 square feet in the first quarter
  • Take notice of the two business park developments near O’Hare, a trend more typical of suburban greenfield markets

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 four-minute podcast with the player above or click here.

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American Academy of Pediatrics’ new headquarters of the future

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Since the American Academy of Pediatrics’ headquarters opened more than 30 years ago, the organization has experienced unprecedented growth. Membership has grown by more than 250 percent to 66,000 members, and total staff has increased from 125 to 455 people. AAP tapped JLL in early 2014 to craft a strategic real estate plan for its new “headquarters of the future.”

Click below for our Project Profile on AAP,  an organization committed to the optimal physical, mental and social health and wellbeing for all infants, children, adolescents and young adults.

American Academy of Pediatrics

We explored expansion and restacking AAP’s existing Elk Grove Village building, purchase of a new building and a ground-up build-to-suit. After touring downtown and suburban sites, it became clear that a build-to-suit was the best choice for AAP’s unique needs. Hamilton Lakes Business Park in Itasca offered proximity to AAP’s valued employee base and future expandability.

As owner’s rep, we facilitated the acquisition of the land site, due diligence and entitlements, as well as the hiring of all project partners. The team worked through the approval process with the Village of Itasca regarding site layouts and engineering, traffic impact and local intersection improvements to help traffic flow.… Read More

4 multifamily takeaways from NMHC

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If record attendance at the National Multifamily Housing Council’s Annual Meeting was any indication, the multifamily asset class is more desired than it has been in decades and fundamentals are strong. Rates and supply concerns aside, there are some simple truths to the industry. Our growing population, from Millennials to Boomers, has a growing preference toward renting, whether that’s due to student debt or being burned during the last downturn.

Here are some key takeaways formulated on the hustle between the Waldorf and Hilton towers:

Blurred lines: Core-plus is the new value-add

multifamily

After two flaming-hot years, value-add has become so overheated that investors are looking at core-plus deals, where a newer vintage with less work means a measurable pop in yield. Equity capital chasing these deals are allocating larger percentages of their funds for acquiring multifamily.

Why are these typically conservative owners taking a harder look at older product (even eight-foot ceilings?!) in secondary and tertiary markets? The ongoing need for workforce housing. A huge mass of renters will never be able to pay luxury, Class-A rents, and you can’t build affordable housing with today’s soaring construction costs.… Read More

This is what happens when office space imitates art

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Donna Mondi had a vision for her 16-year-old interior design firm—a new office and showroom that would bring her team under one roof and reflect their design sensibilities and expert capabilities. Her unexpected inspiration? The industrial chic office set from The Intern, a 2015 comedy starring Robert De Niro and Anne Hathaway.

Enter JLL. “I know that property,” said Christine Bower, Vice President on JLL’s Tenant Representation team.

Click below for our Project Profile on Donna Mondi Interior Design, creator of spaces that are edgy yet sophisticated, modern yet classic, sexy, dynamic and most of all— unpredictable.

Donna Mondi

It wasn’t in River North, where Donna originally wanted to be, and there was no Starbucks in sight (a necessity for Donna and her team). We encouraged Donna and her husband Dominick Mondi, President of Mesirow Financial, to take a look. They took a tour and fell in love. It wasn’t the center of Fulton Market, but it checked every other box.

Knowing the Mondis’ interest in acquiring an income-producing, value-add property, we quickly facilitated the sale for $1.8 million (fortuitously closing the day of the Cubs’ 2016 World Series win). Built in the 1890s, the West Town light- industrial building was a former furniture factory. Donna invested $350,000 to convert the first floor into her company’s new home. The second floor will soon become available for the first time in 20 years, allowing for additional income generation. The space is perfect for a creative tenant craving high ceilings, hardwood floors, original skylights and huge windows.

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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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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.

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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 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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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