Wednesday, April 26th 2017 – (Chicago, IL) On the 56th floor of Chase Tower, a group of Chicago’s premier Developers met to discuss the state of the market. Jonathon McCulloch of Belgravia, Marty Paris of Sedgwick Development, Steve Fifield of Fifield Companies and Tim Anderson of Focus Development addressed the crowd and answered questions from moderator Michael Golden, @ Properties’ Co-Founder.
Hosted by the Home Builders Association of Greater Chicago, the residential market was the focus and topics ranged from success stories, product trends, and hot neighborhoods, to challenges in the rental market and rising construction costs. Many recent discussions have focused on the threat of a rental bubble in the Chicago apartment market and how developers should adjust; Steve Fifield disagreed with the gloom and doom and pointed to recent success at many of their rental sites. Class-A-Buildings in the right neighborhood makes all the difference, as is evident by recent Focus project in Fulton Market. The Parker Fulton Market is currently 95% leased with rents exceeding the original proforma and achieving 10 out of 12 renewals.
Another topic of interest was the rising cost of construction and the impact they have on the market. As mentioned by Marty of Sedgwick, many local developers are having trouble getting projects off the ground due to the cost to build them. “Having a diverse portfolio, experience in different markets, and an in-house general contractor has really allowed Focus to grow steadily through the rescission and has insulated us from the costs of construction today,” said Focus CEO Tim Anderson.
The conversation closed, centered on the country’s largest generation to date, Millennials and their potential impact. The generation trends toward renting later in life than their predecessors and therefore when ready to buy, skip the 1 to 2 bedroom starter homes of old. This may explain some of the changes in the Chicago condominium market. McCulloch explained the trend in the for sale market for bigger condos, citing several of their recent projects like CA Washington which boasts large spaces and 3 bedroom floorplans.
While all recognized the aforementioned trends and some of their negative impacts, this group of panelist all agreed in the end that the state of the Chicago market is strong and the future looks bright.