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WeWork’s Woes: How Will it Affect Chicago’s Office Space Biz?

Oh, how the mighty have fallen! WeWork, the darling of the shared office space world, is now on life support. This means bad news for Chicago. Just six months ago WeWork became downtown Chicago’s largest office tenant. The company’s troubles could create a rare crisis in the still-hot Chicago leasing market. For starters, WeWork’s sudden downturn derailed leases that were in the works, including a huge space the company had planned to open in the recently opened Old Post Office Redevelopment. WeWork’s troubles come at a time when office landlords are bracing for the double whammy of robust new office construction and potentially huge property tax increases. More setbacks could shake up a dow

REITs Are a Better Investment Than You May Think

Color some investment “experts” embarrassed. In a telling article in Forbes, editor Brad Thomas writes a confessional; a mea culpa. He was wrong about REITs. Back in 2018, Brad predicted that returns from REITs would be in the 9%-10% range. Brad writes: “Now well into the year, with just two months left, I’ve got to come clean. Because I was wrong once again. Significantly so this time too. Using VNQ (Vanguard Real Estate ETF) as a benchmark, real estate investment trusts haven’t returned 9%-10% so far this year. They’ve returned more than 26%.” He goes on. “REITs have hit the ball out of the park this year, even outperforming the S&P 500.” Poor Brad. But at least he admits his mistakes. The

Can Anything Prevent A U.S. Housing Crash?

This past week, the Federal Reserve once again lowered interest rates which should help the moribund housing market. However, long-term prospects of a housing crash have increased because of slowing economic growth. The trade war with China is one of the key reasons for this slowdown. The decline in real GDP is bad news for the U.S. housing market because it means that consumer spending is declining thanks to less disposable income. When consumers see a reduction in their disposable income, it’s very unlikely that they will be spending their money on big-ticket items like a house. So, despite the best efforts of the Fed, the housing market is in decline. Sales of both existing and new homes

Where are New SFR Investors Putting Their Money?

Single-family rentals (SFRs) are assets that have traditionally been dominated by mom and pop investors. Even with the rise of institutional investors getting into the game, small-scale investors still dominate the market. Surprisingly, less than 2% of all SFR homes are owned by institutional investors. However, a new class of investor, the midsize investor, is on the upswing, thanks in part to a rise in tech and tools that are making SFR investing and management easier than ever. “The biggest increase in market share over the past year has come among investors owning six to 10 single-family rentals, followed by those owning between 11 and 100 rentals, says Daren Blomquist, senior vice presi

The Greenest Place to Work in America? Chicago.

Who knew? Chicago is the greenest place to work in the U.S., but other cities are trying to catch up fast. According to CBRE Group Inc., Chicago outranked San Francisco, Atlanta, and Los Angeles, which also all saw their percentage of green buildings increase. This is the third consecutive year that Chicago has ranked number one. The city’s percentage of certified green office space rose to 71.1%, up from almost 70% last year and 66% two years ago. Chicago has a goal of having 100% renewable energy in all city-run properties by 2025 as well as its own clean energy rating system for buildings. “The next frontier is going to be taking older buildings and finding ways to make them green and sus

U.S. Construction Spending Rises in September

Despite a rather lackluster housing market, spending on U.S. construction during September actually increased 0.5% from the revised August estimate of $1.287 trillion, according to the U.S. Census Bureau. Low interest rates and higher homebuilder confidence were the driving factors for this increase. According to the National Association of Home Builders and Wells Fargo, the Housing Market Index, which measures current sales conditions, rose from 73 to 75 points, while buyer traffic came in at 50 points. “Low interest rates and solid demand continue to fuel builders’ sentiments even as they continue to grapple with ongoing supply-side challenges that hinder housing affordability , including

Chicago to Spend Big to Revitalize Neighborhoods

Some major money is coming to Chicago’s South and West sides. In October, Chicago Mayor Lori E. Lightfoot unveiled the INVEST program that will shift $750 million in public and private funds to 10 underinvested neighborhoods. That money will come from $250 million in existing pools plus $500 million in already planned infrastructure improvements around transportation, housing and “quality of life” enhancements. Maurice Cox, the city’s new planning commissioner, says he hopes to “unleash the private sector.” And it’s already happening. The first corporate sponsor BMO Harris has committed $10 million to neighborhood investments. BMO’s donation “will be heavily concentrated on the Austin neighb

U.S. Recession Chances Are Increasing

Could the fear of a recession change your investment strategies? If so, it might be a good idea to check out Bloomberg’s new recession indicator. Bloomberg Economics has created a way to determine how close we are to falling into recession. Right now, the indicator estimates the chance of a U.S. recession at some point in the next year is 27%. That’s not good, but there’s no need to panic… yet. The recession probability model developed by Bloomberg incorporates a range of data: economic conditions, financial markets and gauges of underlying stress. Some indicators, like the yield curve, are flashing warning signs. If a recession hits next year, the Fed will have little power to stimulate the

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