If the goal for 2024 was for CRE players to survive till 2025, the new year might provide an opportunity for Chicago’s embattled sector to thrive.
From megadevelopments to downtown revitalization, seven Chicago CRE stakeholders told Bisnow big news could break quickly in the Windy City in the year to come.
“Our heads are going to be on a swivel in 2025,” Maverick Hotels and Restaurants CEO Robert Habeeb said of the next 12 months, which insiders predicted could bring resolution to dormant projects, reverse the fortune of the city’s troubled downtown and place Chicago front and center for investors.
Here are seven stories to keep an eye on in Chicago this year:
Moves On Megaprojects
While the Illinois Quantum and Microelectronics Park is seeing progress in its development, other megaprojects around the city, like The 78, the Bronzeville Lakefront and Lincoln Yards, are fairly quiet.
The 78 lost its $285M anchor tenant in October, the Bronzeville Lakefront site has been a rumored potential destination for the Chicago Bears, and Bank OZK, which backed a portion of Lincoln Yards, took a write-down on its $128M loan for the project in October.
Movement on any one of the developments would be a “game-changer,” Habeeb said.
“All the deals that we're talking about are still in the speculative stage, if you will,” Habeeb said. “People seem to be waffling on how fiercely they're going to go after developing them. Just to see somebody that says that they're going to aggressively pursue those developments would be a shot in the arm.”
Stadium Spending
The Chicago Bears and White Sox made headlines last year when they released renderings of new stadiums on the sites of Soldier Field and The 78, respectively.
But owners of both teams have asked for public money to help finance the stadiums, a request that Gov. J.B. Pritzker has repeatedly said is a nonstarter for the state.
Chicago CRE stakeholders are looking to see whether the teams pony up more private money to start building these stadiums in 2025 or follow through on last-ditch alternatives such as moving the teams out of the city.
“If the ownership of the Bears wants this sort of stadium … no matter where they're going, they need to come up with some money to do it,” said Collete English Dixon, executive director of the Marshall Bennett Institute of Real Estate at Roosevelt University.
“I think the NFL has helped them by allowing private equity to invest in these things and invest in teams. And so maybe that's going to be their pathway to come up with the resources to make this happen.”
A Central Loop Comeback
Full-year office leasing activity downtown reached 9.1M SF in 2024, the highest annual tally since the pandemic began, according to a year-end Savills report.
Office stakeholders expect to see that trend continue, buoyed by progress on LaSalle Street office-to-residential conversions, a lack of new office development and major corporate players like Google and JPMorgan Chase committing to the Central Loop.
“The major trend you're seeing is a stronger degree of confidence by corporate office space users to commit to leasing space for longer periods than they had been over recent years,” said David Burden, principal and vice chair at Colliers.
“There's been some insecurity coming out of Covid, but I think in 2025, we're going to see that pass and we're going to see more confidence in making commitments to leasing space.”
The Thompson Center
Progress on the conversion of the James R. Thompson Center to Google’s new Chicago headquarters is well underway. Curtain walls surrounding the construction are completely off, and glass for the facade is expected to come in February.
The company anticipates it will move into the building at 100 W. Randolph St. in 2026. And executives hope the anticipated completion will lead some companies to set up shop nearby, inking deals as soon as this year to give time for tenant improvements and renovations.
“We've talked to some [companies] that want to be in proximity,” said Allen Rogoway, managing principal at Cresa. “The workforce … should absolutely infuse the Central Loop retail, and there's buildings in proximity that I think are going to benefit from it.”
Read the full article in Bisnow.