DePaul University’s James D. Shilling named a national NAIOP Distinguished Fellow

Professor James D. Shilling—the George L. Ruff endowed chair in the department of finance and real estate at DePaul University’s Driehaus College of Business—has been named a national NAIOP Distinguished Fellow. Shilling’s term as a NAIOP Distinguished Fellow will begin in January 2021.

The prestigious Distinguished Fellows program engages the nation’s foremost commercial real estate, economic and public policy experts. Distinguished Fellows are active participants in NAIOP and contribute articles to NAIOP’s Development magazine, present to the association’s leadership via the board of directors or national forums, participate on corporate committees and provide advice, feedback and information regarding research being conducted in commercial real estate.

“We are very excited that professor Shilling has been named a national NAIOP Distinguished Fellow,” said Charles Wurtzebach, the Douglas & Cynthia Crocker endowed director, Real Estate Center at DePaul. “This is a well-deserved and important honor.”

Shilling has been an important part of meetings and conferences produced by The Real Estate Center at DePaul. Earlier in the fall he addressed a meeting produced jointly by The Real Estate Center and the Real Estate Investment Association (REIA) which focused on a Chicago market sentiment report.

Shilling noted that, according to the report, the greatest concerns impacting the Chicago real estate market are directly related to COVID-19. “The pandemic is not a macro-economic concern,” Shilling said. “It has macro-economic effects but is something that only the microbiologists will solve.”

The financial stress the pandemic is exerting on the state and its municipalities was rated among the top two concerns by real estate professionals connected to DePaul and ULI-Chicago. Shilling noted that those concerns are national in scope and not just relegated to Illinois. For example, he shared that the budget deficit in Illinois is expected to be 6 to 12 percent. That contrasts with projected deficits in California and New Mexico of 16 to 20 and 20 to 30 percent, respectively.

“The concerns are real, in Chicago and across the country,” Shilling said. “This could cause a huge disruption and slowdown that would last through 2022 if not addressed further by the federal government.”

Shilling also reflected on rising unemployment concerns. “The increase in unemployment was unprecedented, but of our own making,” Shilling said. “We wanted to people to stay at home. We worked to shut things down in order to combat the pandemic.”

A portion of his presentation was devoted to conditions that have changed and statistics that are now available since the completion of the report.

“The second quarter was disastrous,” said Shilling, noting a 32 percent fall in the GDP. “It will always be known as the Covid Quarter.”

Shilling shared other market datapoints that are causing some people to be slightly more optimistic than they had been previously. He said that more jobs have been created (or re-created) than expected, lowering the unemployment rate to approximately 8.5 percent with predictions for a 7.5 percent rate by year’s end. In tandem with the employment gains, Shilling noted that even though CARES benefits have expired, people have been willing to spend which has translated into real growth in personal expenditures/consumption.

Given those results, Shilling said the GDP could return to pre-COVID levels by second quarter 2021.

Chicago, according to Shilling, is not unlike the rest of the country when it comes to concerns it will face for the balance of 2020 and into 2021. He noted that while the city and Cook County are burdened by the uncertainty associated with the property tax situation, the prospects for Chicago are relatively good.

“Chicago is a value-creating city and has been for a long time,” he said. “We should continue to see wage increases and rent growth, but not to the level that causes a crowding out effect like coastal cities such as San Francisco, San Jose and Boston have been experiencing.”