If a theme emerged during this year’s Chicago Forecast event, it was a simple one: Appreciate the fact that you work in the economic engine of the Midwest.
Several speakers during Illinois Real Estate Journal’s 22nd annual Chicago Forecast, held Jan. 16 at the Chicago Marriott Downtown Magnificent Mile, emphasized that commercial real estate brokers are fortunate to be working in the city of Chicago. As many said, it’s important for CRE professionals to tout the advantages of the city.
And as others said? Yes, these are challenging times. But Chicago and its surrounding suburbs have faced difficult times before. And the city has always emerged stronger.
The big takeaway: Chicago’s commercial real estate community will work though the challenges of high interest rates, stubborn inflation, the work-from-home movement and public-safety issues in downtown.
Why? Because it always has.
The resiliency and strength of the Chicago-area market was one of the main points that speakers made during the forecast’s first panel discussion, Forecasting Downtown Chicago & Beyond: What’s in Store for ’24?
This panel featured an all-star cast of CRE professionals, with Michael Fishman, shareholder with Greenberg Traurig, serving as the moderator and keeping the conversation lively. Panelists were:
- Bob Six, chief executive officer of Zeller
- Quintin Primo, chairman of Capri Investment Group
- Brad Serot, vice chairman of CBRE
- John Tomlinson, managing director of Hines
- Meredith O’Connor, director of JLL
These five CRE stars discussed a host of topics during their panel, which attracted a crowded house of more than 400 attendees.

John Tomlinson, Hines; Michael Fishman, Greenberg Traurig LLP, moderator; Meredith O’Connor, JLL; Bob Six, Zeller; Quintin Primo, Capri Investment Group; and Brad Serot, CBRE.
A resilient market
“We will get through this. The governor is correcting our finances. The state of Illinois has seen nine credit rating upgrades. The CHIPs and Science Act and Inflation Reduction Act are already having positive impacts. National site selectors who never looked at Illinois before are now looking at our state. That is a breath of fresh air to see that Illinois is in competition again for major projects.”
– Meredith O’Connor, JLL
There is hope
“The things we have, such as a strong public transportation system, a strong labor force and access to Lake Michigan, make a difference. People talk about the interest rates that went up. Well, we were blessed for many years to with artificially low rates. Unfortunately, that creates a mirage. The owners of Class-C office buildings thought that they could earn solid profits without making any investments in their buildings. That isn’t the case when rates aren’t so low. Today, office owners need to create community in their buildings if they expect to attract tenants. We all need to be patient. We need to see the Fed lower rates. There’s hope here. Be patient.”
– Bob Six, Zeller
The economic engine
“Patience really is key. We saw that with Wolf Point East, which is a big success story now. What’s important is that you also have to build communities outside of the office buildings. You need to bring in retail and restaurants. That’s what brings people to an area. Those outside areas matter, too. We have seen a lot of negative headlines about Chicago. But I believe that Chicago has the best business community in the world. Chicago is the economic engine of the Midwest.”
– John Tomlinson, Hines
There is still demand for Chicago-area office space
“There is demand for office space. The flight to quality we’ve been hearing about? It’s true. Class-A buildings are outperforming others. The Fulton Market area is a winner today. Salesforce Tower is a winner. Since 2020, the center of gravity has been moving back to the West Loop. I hope it travels out to the Central Loop, too. In 2024, I think demand for commercial real estate in Chicago will increase. Hybrid work will remain, though. All our clients are frustrated. They want their employees back. They are considering mandating that their workers return to the office three or four days a week.”
“There are challenges. Since 2020, concessions are way up. Then there is the sublease market that is looming over Chicago. This is some of the highest-quality sublease space that I’ve ever seen. Owners are competing with this.”
– Brad Serot, CBRE
The need for a less segregated community
“Segregation is a big challenge for this city. A two-year study by the Metropolitan Planning Council tried to determine the true costs of segregation. It found that because of segregation, the city of Chicago loses out on $4.4 billion in extra income each year. If the city were less segregated, there would also be 30% fewer homicides and its residents would earn 83,000 more bachelor’s degrees. Just think what we could do with $4.4 billion of additional income each year. Just think how we could make the city stronger. Keeping a significant population of the city from achieving success hurts all of us.”
– Quintin Primo, Capri Investment Group
A controversial take: An increase in real estate transfer taxes high-end properties in Chicago might not be all bad?
“The extra money raised from an increase in real estate transfer taxes would go toward fighting homelessness in the city. Homelessness is a focus for me. I hear a lot of whining that taxes are already so bad, that the real estate market is depressed because of COVID and high interest rates. But, in my opinion, we must roll up our sleeves. What can we do? Our real estate taxes pale in comparison to other cities. The revenue from this increase is going to be used to address homelessness in the city. I’d argue that the impact of homeless people in front of their buildings is more of a negative than the impact of higher transfer taxes.”
– Quintin Primo, Capri Investment Group
Meeting the challenges
Though panelists were optimistic on the strength and future of downtown Chicago’s real estate market. They did say that the city faces several problems that it must resolve.
“We need to fix the issue of rising crime in the Central Loop. Having more activity there will help do that. We need to create more vibrancy in the Central Loop. That is probably the least diverse of all our Chicago neighborhoods. It is almost all office with a bit of retail.”
– John Tomlinson, Hines
“We are far behind on the number of residential units we need in the city. Conversions can help with that, but the costs of construction are up. That makes it difficult. The city needs to offer financial incentives to encourage more conversions from office to residential.”
– Bob Six, Zeller
“Many of the people not going back to work are women. They are facing childcare and transportation issues. We have to figure that out if we want these women to return to the office. We ae also need incentives to encourage more development here. If we want bigger projects in the Chicago area, we have to offer the same incentives provided by other states.”
– Meredith O’Connor, JLL
“Crime and high taxes are deterring people from making real estate decisions. Clients are worried about crime in certain neighborhoods. It is deterring clients from developing in those areas.”
– Brad Serot, CBRE
“It is great that Google has developed such a strong presence in Chicago. It’s wonderful having all these Googlers walking around the Fulton Market. But Google, while important, is not enough. We need to continually attract new companies to the city.”
– Quintin Primo, Capri Investment Group