Category Archives: Research

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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Q1 2018 Office Insight: A tale of two markets

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office insight

Q1 2018 stats for the Downtown Chicago office market

Two roads are diverging in Chicago, as evidenced by first quarter’s mind-boggling 35.2 percent spread between Class A and Class B asking rents downtown. While the triennial property tax assessment pushed landlords of choice properties to raise rents to record highs, they’re controlling the sticker shock with substantial concession packages.

Tenant improvement allowances are up by an average of 33 percent in the CBD over the past five years, something “that’s really moving the needle for tenant decision,” JLL Managing Director of Research Christian Beaudoin recently told Crain’s Chicago Business.

Construction costs rose 3 percent last year, there’s more than 7 million square feet of product under construction and landlords are competing aggressively to land tenants. These factors are fueling tenant demand for TI dollars, which will be applied toward building out creative, highly amenitized spaces in configurations ranging from traditional to progressive (like GGP at River North Point).

While financial services and law firms are shedding excess second generation Class A space, those vacancies continue to be offset by suburban relocations (including McGraw-Hill and AdTalem Education), particularly to the West Loop. Leasing activity has already reached more than 45 percent of last year’s total volume, a roaring start to the year bolstered by the urban migration trend.… Read More

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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You won’t believe what happens next for healthcare

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2017 was a year of mega-mergers in healthcare as providers and payers alike seek economies of scale, often by joining forces, on the journey toward value-based care. This patient-centric model of quality over quantity creates more risk, and responsibility, causing health systems of all sizes and geographies to reevaluate their delivery of care model, build efficiencies and hopefully gain a leg up on the competition.

With downward cost pressures and such a huge emphasis on results, the healthcare of tomorrow is going to look a whole lot different from today’s hospitals and doctors’ offices. In fact, the tech-forward, community-first evolution has already started.

Telehealth: A Skype date with doc

Imagine you’re in a rural community miles from the nearest hospital, or you’re just across the street from one but are challenged by limited mobility. Telehealth leverages technology so patients can seek treatment without ever leaving the house, significantly reducing costs for the health system while shielding vulnerable patients from healthcare-associated infections.

At the $54-million Mercy Virtual Care Center in St. Louis, a nearly 200-year-old health system is pioneering the idea of a “hospital without beds.” With regular virtual visits and remote health data monitoring technology, Mercy can observe even the most critical patients with an even closer eye, learning individual baselines and gaining the ability to distinguish true emergencies from issues that could be solved by changing medications. It’s already reducing readmission rates, improving outcomes and changing the way we think about house calls.… Read More

Value-Based Healthcare: How did we get here?

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healthcare timeline

If you think today’s healthcare system feels like an unsolvable Rubik’s Cube, you’re not alone. But it didn’t develop in a vacuum, and it’s important to understand historical context. Explore a timeline of our journey toward value-based healthcare below, where you can roll over the red buttons for details on major legislative, social and cultural milestones.… Read More

Inside Chicago’s $80 billion manufacturing industry

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manufacturing

Welcome to Episode 13 of Real Time, JLL Chicago’s industrial podcast. In the second half of this two-part episode, the team chats with mHUB CEO Haven Allen about Chicago’s local manufacturing ecosystem. With 14,000 establishments already employing more than 400,000 people, there’s opportunity everywhere. We explore how mHUB and its partners are:

  • Building a community of manufacturing innovation talent
  • Providing those people with opportunities to grow their ideas with local resources
  • Creating the conditions for product innovators to survive and thrive in this industrial revolution
  • Sparking industry collaboration that accelerates the introduction of sustainable new product businesses

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


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

Listen to Part 1 here.

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Top 10: Fighting healthcare-associated infections with facilities management

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healthcare compliance

Our healthcare solutions team recently hosted a webinar uncovering the unexpected impact of facilities management and healthcare compliance on patient safety and clinical outcomes.

“On any given day, about one in 25 hospital patients has at least one healthcare-associated infection,” said JLL Director of Healthcare Technical Operations George Mills. “By taking a proactive approach to compliance, health systems can reduce overall risk in hospital environments.”

George joined JLL last year after serving as Director of the Department of Engineering at The Joint Commission. By exploring the intersection of clinical needs and the physical environment, he’s demonstrating the need for health systems to turn a critical eye to their operational efficiency and outcomes.

Our top 10 webinar takeaways:… Read More

Your Stark Law and Anti-Kickback Statute Playbook

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If you’re a health system and think patient referrals have nothing to do with your real estate, think again. Arm’s length isn’t just for anatomy lessons; it’s necessary to ensure real estate transactions don’t corrupt professional, medical judgement, resulting in fines and criminal charges.

Stark Law

Click the image to download our complete Stark/AKS Playbook

Two intertwined federal laws concern patient referrals influenced by improper financial incentives (ex. below fair market value rents) and are a critical consideration in the management of a health system’s real estate:

Stark Law

For services paid for by Medicare, Medicaid or other state healthcare plans, Stark prevents physician self-referral and patient referral to entities with which the physician has a financial interest or relationship.

Anti-Kickback Statute

Prohibits kickbacks, bribes, rewards and other economic incentives that induce physicians to refer patients for services or recommend purchase of medical supplies that are reimbursable under government-funded healthcare programs.… Read More

mHUB CEO Haven Allen talks manufacturing innovation

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mHUB

Welcome to Episode 12 of Real Time, JLL Chicago’s industrial podcast. In the first half of this two-part episode, the team learns more about mHUB, Chicago’s first innovation center for physical product development and manufacturing. As mHUB approaches its one-year anniversary celebration in March, CEO Haven Allen reflects on:

  • Creating mHUB to cement Chicago’s status as an advanced manufacturing hub
  • Finding mHUB’s home in River West
  • Attracting and developing talent for Industry 4.0
  • Early success stories, like Fixer

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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Recorded at: Coda Room Audio
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Why tech employers are freaking out about the Chicago market

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tech employment

While unlimited soup, salad and breadsticks is a universal truth at any Olive Garden, an unlimited supply of engineers is not a guarantee in a hot tech market like Silicon Valley. That’s why the most agile and bottom-line-minded tech firms have turned to Chicago to find their next tech talent, whether their need is a half dozen or several hundred of the best and brightest.

“We want to tap into the Chicago market. We’re excited about the tech talent there—the new grads, people returning home because it’s such a livable city,” Foursquare senior vice president of engineering Matt Kamen recently told Crain’s Chicago Business.

While Foursquare is starting to hire just a half-dozen engineers locally, enterprise demand for its location data underscores a high-growth and more diversified future for the New York-based business. Foursquare looked at other up-and-coming markets, from Toronto to Austin, but we can guess one big reason Chicago won—tempered wage growth.… Read More

Thinking outside of the ‘green’ box

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sustainabilityAuthor: Keara Fanning

When it comes to sustainability, companies and landlords need to start thinking outside of the ‘green’ box in order to attract new occupiers in a tightening market. After all, sustainability isn’t just about the environment anymore. It’s also about health and wellness, which is why more and more building owners are looking to add amenities such as fitness centers, bike racks and showers within their facilities, as well as to integrate health and wellness measures into the design of their buildings. However, landlords need to be thoughtful about how they tackle the demand for building amenities, as the added electricity alone can greatly increase the budget, with electrical making up nearly a third of total renovation cost.

There are many pros to adding wellness focused amenities within your building, whether included in ground up construction or through renovation:… Read More

Where to snag Class A space at a $20 PSF discount

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Class A

On the heels of Black Friday and Cyber Monday, we’re here with an office space discount you have to see to believe. In the last five years, the gap between top-tier downtown and suburban space has dramatically widened, creating interesting opportunities for occupiers looking for luxury.

Since 2012, Class A rents have increased just 7.4 percent in the suburbs, compared with more than 27 percent downtown. For even the smallest tenants, this represents six-figure savings that could be reallocated to other business priorities, from talent retention to technology upgrades.… Read More

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 Woodfield Mall appears to be flagging, JLL Research attributes that to Zurich’s relocation and expects occupancy to soon mirror the strength of its peers.

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Commuting in the suburbs: A SWOT analysis

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In a market as large as suburban Chicago, getting to work can be around the corner or a major undertaking. Our Research team recently completed a suburban SWOT analysis, determining the top three modes of transportation used to get to the office in each submarket. Roll over each submarket below for the details.

Strength: Public transit

Public transportation, from the L to the Metra, has been a boon to several… Read More

Fast facts on Chicago’s educated workforce

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More classes are in session than ever in Chicago. The share of Chicagoans over age 25 with bachelor’s degrees or higher leapt from 29.3 percent in 2006 to 36.4 percent last year, with the sharpest increase starting in 2011. That share is significantly higher in the CBD, with nearly 80 percent of the population holding undergraduate and graduate degrees.

educated workforce

Chicago’s hike was larger than any of the country’s four other most populous cities—New York, Los Angeles, Houston and Philadelphia—and more than twice the 4.3 percent national increase.

educated workforce

Let’s look at some major demographic forces at play in the development of the CBD’s well-educated, diverse and skilled labor force.… Read More

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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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.

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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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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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