Each week, The Elevator Speech summarizes news related to some of the key industry trends, buildings, deals and dealmakers that shaped headlines. Below are articles that caught our attention the week of December 17.
New office development could be limited in the Chicago CBD because the supply of downtown spaces over 100,000 square feet has increased by more than 40 percent over the past 12 months. A report from CBRE Inc. revealed there were 32 big blocks of space comprising 6.1 million square feet in the third quarter, up from 22 blocks totaling 4.3 million square feet a year earlier. Landlords pay close attention to big blocks of space because developers generally need big tenants to kick off a new tower. In light of this trend, Houston-based Hines Interests L.P. is moving forward with, River Point, a 45-story, 900,000-square-foot tower at 444 W. Lake St. on “spec,” or without lining up a tenant in advance.
The technology startup hub inside the Merchandise Mart, 1871, is off to a fast start, as six companies have landed $11.6 million in funding in the past seven months. Funding has been granted to individual entrepreneurs with little more than an idea, and to more-established startups with products and paying customers. The most recent tenant to get funded was online parking-reservation service SpotHero Inc.
After two years of solid price gains, Chicago-area commercial landlords are back to where they were in 2005, according to a new price index compiled by Real Capital Analytics Inc. Prices today are roughly where they were in mid-2005, when the real estate bubble was still inflating. The index fills in a picture of a local real estate market that continues to recover from the worst recession since the 1930s but has yet to shake off the malaise completely. Though good times have returned for investors who own trophy buildings in the best downtown locations, it’s a different story for many properties in the suburbs, which have been slower to come back.
And, here’s a sign of future growth around Chicago’s premier convention facility. This week, officials agreed to pay $5.1 million for a relatively small property just north of McCormick Place in a move toward assembling land for future hotel and entertainment developments.
The Metropolitan Pier and Exposition Authority board on Tuesday morning approved the purchase of a parcel at 2101 S. Indiana Av.
What CRE or Chicago news headlines from the past week captured your interest? Leave us a comment and let us know.