Well, we’ve made it. We got through another pandemic year, and was it one for the history books. The new year is just around the corner, but we can already look back at 2021 as one that represented both the good times and the bad times in Chicago commercial real estate. The downtown office market is doing its best to hang on, meanwhile, investors are piling big bucks into multifamily properties in Chicago’s neighborhoods.
Our coverage in 2021 touched on a number of big themes, such as the evolving nature of the centralized office, the wild ride that retail property owners have been on, and some silver linings, such as the legal industry, which has been keeping soaking up quality office space in a distressed market.
Thank you to all of the CRE professionals who spoke with us this year for feature stories in Illinois Real Estate Journal, and thank you to all who have read along and attended our events. If there’s anything you want to see covered in 2022, be sure to drop us a line at editor@rejournals.com.
The “flight to quality” in the office market
This was by far one of the biggest themes of the year in Chicago commercial real estate. At this same period last year, it was largely unknown when major corporations planned to return to the office, or if some would ever return. Because of the massive amount of sublease space on the market, companies that were looking to move or sign a new lease were able to get high quality spaces, often times at a big discount.
And then there was the uncertainty about whether companies will continue to focus their efforts on attracting talent to downtown offices, or consider taking space out in the suburbs. After all, the suburban market had been struggling too. But legal offices offered a sign of hope as that industry came off of a record year and had budgets to spend on office leases.
Big plans coming to fruition
Before the pandemic, Chicago was experiencing a significant building boom. This boom spilled over into the pandemic years as developers continued pressing forward on projects. For instance, on Goose Island, it’s full steam ahead on the adaptive reuse and renovation of old warehouse spaces into posh offices. Also along the Chicago River’s North Branch is the Lincoln Yards mega-development, which is set to enter the next phase of construction.
And then in Pullman, we saw the completion and opening of the visitors center for the Pullman National Monument, capping off years of planning and spending to overhaul the former clock tower and administration building at the Pullman Company. In May, local leaders and developers celebrated the formal opening of the Art Space Lofts, the first new multifamily development built in the neighborhood for over 60 years.
Flexibility will continue to be key
If there’s anything we’ve all learned for both our personal and professional lives in the last two years is to not count on things always working out the way you had planned. This is especially true for business leaders who had been planning to bring employees back to the office by Labor Day, but had to push things back due to the Delta surge.
However, office designers and contractors have taken this moment to reconsider the planning principles of what an office space could and should be during the pandemic. From office spaces that resemble “neighborhoods” or feature a “hub and spoke” model. And then out in the burbs, we can expect to see some big changes as the Chicago Bears appear ready to plant their flag in Arlington Heights.
