IllinoisCRE Boeing, Sara Lee and toy soldiers: Gloor, Nieman draw crowd at Forecast event Dan Rafter January 10, 2020 Share on Facebook Share on Twitter Share on LinkedIn Share via email For the record, both Andy Gloor and Drew Nieman are fans of the Chicago Cubs. But they both think the White Sox will be the next Chicago baseball team to make it to the World Series. They both also think Mitch Trubisky should be shipped far away from the Chicago Bears and that Chicago’s best pizza is thin crust, not deep dish. Those revelations, during a rapid-fire q-and-a session by moderator Meredith O’Connor, international director with the Chicago office of JLL, came during the end of a freewheeling and entertaining chat between Gloor, chief executive officer of Chicago’s Sterling Bay, and Nieman, executive vice president of Riverside Investment and Development in Chicago, at the 18th annual Commercial Real Estate Forecast Conference held Jan. 9 by REjournals. In a packed meeting room – there were so many attendees that dozens lined the back and side walls of the meeting space – Gloor and Nieman shared their thoughts on the evolution of Chicago’s commercial real estate market, the challenges facing the city and their favorite deals. The discussion was certainly a highlight of the conference held at the Hyatt Regency Chicago. First, the positives. Both of these CRE veterans said that Chicago remains an attractive city for developers and new businesses. Both said, too, that this isn’t about to change anytime soon. Why? Chicago simply has too much to offer. Gloor pointed to something so many Chicagoans take for granted, O’Hare International Airport. This airport makes it extremely easy to get into and out of the city, Gloor said. That’s important for businesses seeking new headquarters or regional offices. Gloor cited, too, the strong labor market in Chicago. Businesses moving to the city have plenty of skilled worker from which to choose, he said, another benefit that those who have long done business here might take for granted. Nieman added that the city has been blessed with a long line of pro-active mayors. These mayors – along with Chicago’s political leaders – have done much to bring new businesses to the city, Nieman said. “More companies from the coasts are coming to Chicago. The word is getting out about what a good place this is for businesses,” Nieman said. “Companies from the coasts are realizing that Chicago isn’t a bad place to be.” O’Connor added that the business and development community in Chicago has done plenty to attract new companies to the city, too. “The existing business community here really does roll out the red carpet for companies that are considering coming here,” O’Connor said. “Companies won’t move to a city if they don’t feel welcome there. The business community in Chicago does a great job in helping us sell the city.” Of course, Chicago does face challenges. Both Nieman and Gloor pointed to the pension crisis facing Illinois. This crisis, actually, was a theme throughout the entire Forecast Conference. The many CRE experts speaking said that Illinois lawmakers need to draft a plan to deal with the pension shortfall. Until they do, these speakers said, the big pension bill will loom over the state and city. Gloor also pointed to the slow, but steady as of late, dip in Chicago’s population. The exodus of so many residents leaving the city and Illinois is only exacerbating the pension crisis, he said. “That pension shortfall is so big, we’re not going to be able to climb out of the hole without two things,” Gloor said. “Of course, the state has to get its finances in order. But we also have to grow. The city and state populations are shrinking now. We have to attract people to Chicago and Illinois. That will help.” Despite the challenges, both Nieman and Gloor predicted that 2020 will be a solid year for Chicago’s commercial real estate industry. “I think 2020 will be a good year. Most think there will be a slowdown, though, of some sort,” Gloor said. “It won’t be like 2008 or 2009. It is not something we are panicked about. But there does seem to be an expectation that there will be a bit of a slowdown this year.” Nieman said that the presidential election might have an impact on CRE activity this year. Presidential elections bring uncertainty, and some companies might wait to make their real estate decisions until after this uncertainty passes. But overall, Nieman said, the Chicago CRE market should remain a strong one in 2020. O’Connor asked Nieman and Gloor, who both have closed plenty of transactions during their careers, to name their favorite CRE deal of all time. It didn’t take Nieman long. He pointed to the deal he worked to bring Boeing’s corporate headquarters to Chicago in 2001. This was a major coup for the city, of course. Boeing was considering Dallas and Denver, and eventually chose Chicago. Nieman recounted the late nights and last-minute financial wrangling that helped close the deal. “We did get that deal done, and it really was fun to be a part of it,” Nieman said. Gloor pointed to helping to bring Sara Lee Corporation’s North American Meats headquarters in early 2013 to Chicago, at 400 S. Jefferson St. Sterling Bay, of course, has since closed deals that brought Google and McDonald’s to the city of Chicago. But that Sara Lee deal was one of the first examples of a company making the big move from the suburbs to the city, Gloor said. “I remember when the CEO of Sara Lee first saw the building. He said it wasn’t pretty but that they were coming to Chicago,” Gloor said. “He told us to make it happen.” Gloor said that the Sara Lee deal gave him the confidence that big companies were interested in moving to Chicago. That helped pave the way for the big Google and McDonald’s deals that Sterling Bay would eventually close. Both Nieman and Gloor have enjoyed long careers in commercial real estate. This means that both these industry veterans have seen big changes in the city and its CRE market. What are the biggest changes they’ve seen? Nieman pointed to the constantly shifting nature of what, exactly, constitutes the intersection of Main & Main in Chicago. There was a time, Nieman said, when the key intersection, the heart of the city, could be considered LaSalle and Madison. Then the city evolved, and you could make the argument that Wacker and Madison became the new Main & Main. Today? With the growth of Uber and Lyft and with more workers riding Divvy bikes or working from co-working spaces, Main & Main can really be anywhere, Nieman said. “It can be in several spots at once,” Nieman said. “It can be in River’s Edge or Fulton Market. Or it could be in some other part of the city that is being developed now. There aren’t as many limitations.” Gloor said that the expansion of the commercial real estate market has been the biggest change he’s seen during his career. He pointed to Google’s decision to open in Fulton Market. Years ago, Google might have focused on Chicago’s CBD. Today, companies are looking across the city to find their new homes, Gloor said. O’Connor ended the conversation with a bit of fun, asking Gloor and Nieman what they’d do with their time if they hadn’t gone into commercial real estate. Gloor talked about how peaceful it would be to spend his days fishing, maybe working as a fishing guide in some warm part of the country. And Nieman? He mentioned his five kids – some of whom were in the crowd watching their father’s presentation – and said that he’s always loved coaching and mentoring. He also mentioned his toy soldiers. Nieman, a history buff, collects toy Civil War figurines, a relaxing way to destress from the world of commercial real estate. “My kids will hear me and say, ‘Uh-oh, he’s talking to his Civil War guys again,” Nieman said, ending the conversation with a good laugh.