Prospects for Chicagos Real Estate Market Chicago Association of - - PowerPoint PPT Presentation

Prospects for Chicago’s Real Estate Market

Chicago Association of REALTORS January 11, 2018

Presented by Amy de Vallet Senior Director Tribune Real Estate Holdings, LLC.

• Tribune Real Estate Holdings was formed in

2013 after emergence from bankruptcy

• New Tribune Company management saw
• pportunity to maximize value of real estate

assets to create shareholder value

• Since formation, we have sold over $700mm in

real estate assets and anticipate as much as another $400mm in the coming years

TRIBUNE REAL ESTATE HOLDINGS

MAXIMIZING LEGACY REAL ESTATE IN A DIGITAL ECONOMY

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• Owned 76 properties in 23

states upon formation of the holding company

• 8M SF on 1,200 acres
• Mix of urban office and

industrial, and large suburban/rural parcels

• Large presence in Chicago,

Los Angeles, New York

OUR LEGACY FOOTPRINT

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OUR APPROACH

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Our experience as a holder, leaser and renter of property advises our real estate approach A private equity approach to real estate holdings:

• Define & execute optimal strategies for each

asset

• Perfect entitlements and enhance/improve

zoning

• Enter JV agreements with local operators and

monetize when appropriate

GROWTH AND DEMAND IN CHICAGO’S URBAN CENTER

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• Chicago’s Downtown Central Business District is growing
• City of Chicago is modernizing policies to encourage growth
• Educated millennials overwhelmingly settle downtown, prefer CBD to suburbs

at a 15:1 ratio

• They demand live/work/play environments that emphasize connectivity

(digital & physical)

• Urban centers are replacing suburban campuses – and businesses are

relocating to Chicago

URBAN OPPORTUNITY: SUBURBAN FLIGHT

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• They’re looking for talent, unique and creative space and to use their

presence in an urban setting to further define their brand

URBAN OPPORTUNITY: CORPORATE TRENDS

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So what does this mean for land owners and developers – especially in a large gateway market like Chicago?

WE’RE BULLISH… BUT THERE ARE CHALLENGES

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• Old buildings with aging infrastructure
• Significant transportation infrastructure needs
• Absence of regional planning with widespread, cross-jurisdiction political

support and cooperation

• Potential for excess inventory

LINCOLN YARDS 28 acres OLD POST OFFICE 2.5M sq. ft. MICHAEL REESE 49 acres GOOSE ISLAND/MORTON SALT 4.25 acres THE RIVER DISTRICT 37 acres RIVERLINE 14 acres THE 78 62 acres UNION STATION 14 acres

CAN IT ALL BE ABSORBED?

Why are we still bullish?

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Because geography and demographics still matter

THE RIVER DISTRICT

37 CONTIGUOUS ACRES BOUNDED BY CHICAGO RIVER, HALSTED, AND GRAND AVENUE

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URBAN CONTEXT

NEXUS OF CHICAGO’S MOST DESIRABLE RESIDENTIAL NEIGHBORHOODS

LOGAN SQUARE BUCKTOWN HUMBOLDT PARK

2 Mile Radius

STREETERVILLE

29,507 79.1%

1 Mile Radius

RIVER NORTH

16,022 82.7%

THE LOOP

15,812 80.4%

WEST LOOP FULTON MARKET

55,161 68.1%

WEST TOWN RIVER WEST

35,077 43.4%

TRI-TAYLOR

7,141 62.6%

WICKER PARK

26,164 78%

GOLD COAST OLD TOWN

40,133 72.3%

LINCOLN PARK

66,085 82.2%

LAKEVIEW

70,984 83.3%

SOUTH LOOP PRINTER’S ROW

30,505 78.0%

UNIVERSITY VILLAGE

34,017 43.4%

UKRAINIAN VILLAGE

11,450 59%

POPULATION ESTIMATE

EAST PILSEN

51,527 44.6%

BUCKTOWN LOGAN SQUARE

85,319 67%

COLLEGE DEGREE

15-30 minute commute (or less) to all of Chicago’s most desirable neighborhoods for millennial talent 250,000 residents (146,000 households) within 2 miles of site 953,000 residents (442,000 households) within 5 miles of site

TRANSPORTATION CONNECTIVITY

CENTRAL LOCATION TRANSIT CONNECTIVITY

CONVENIENT ACCESS TO MAJOR BUS, TRAIN, BIKE, AND COMMUTER HUBS

• 50% of site within ¼ mile of CTA

Blue Line

• CTA Blue goes direct to ORD
• Within ½ mile of 5 CTA train

stations (Blue, Brown/Purple, Green)

• Bounded by 3 major bus lines

(Halsted, Chicago, and Grand)

• Halsted and Milwaukee are major

bike ‘spoke routes’

• 1 mile to Ogilvie / Union Station

commuter train system

• There’s good reason to be bullish on Chicago and other

gateway cities

• Geography and demographics still matter
• Watch out for oversaturation and challenges for absorption

KEY TAKEAWAYS

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