Untangling Chicago’s rail traffic mess

The New York Times, on Monday, provided a thought-provoking progress report on the ongoing C.R.E.A.T.E. project to ease rail congestion in and around Chicago.

Did you know that 1/4 of all U.S. rail traffic — and fully 1/2 of all intermodal rail traffic — moves through the Chicago area?

That kind of volume, as has been well documented, has created a traffic bottleneck of sizeable proportions here.  As the story reports, a load of rail cargo can make its way from the Port of Los Angeles to Chicago in less than 48 hours, but then typically takes more than 30 hours just to get through the city.

The $3.2 billion C.R.E.A.T.E. project, which is funded by local, state and federal sources (and by the railroads themselves), includes some 70 congestion-reduction projects, 14 of which have been completed and another dozen of which are now underway.

Getting the rest of the work done now depends on the ability of Congress to pass a bipartisan transportation infrastructure bill which, as you might imagine, is leaving local transportation, supply chain, logistics and industrial real estate industry leaders uneasy.

To read the full New York Times story, click here.

ABC 7 Chicago tours the new Roosevelt U. vertical campus

The new Roosevelt University vertical campus in the South Loop, which has already received rave reviews from architecture critics and other interested observers, celebrated its official opening this past weekend with a ribbon cutting and open house.

Jones Lang LaSalle’s Project and Development Services (PDS) team was proud to serve as development manager for the 32-story, $123 million building, which is now the second-tallest educational facility in the United States and the sixth-tallest in the world.

ABC 7 Chicago attended the ribbon cutting and aired this segment (see video above) on Saturday evening’s newscast.

JLL celebrates 1871 Chicago grand opening

1871 Chicago, the new shared work space for high-tech entrepreneurs at the Merchandise Mart, celebrated its grand opening yesterday with the announcement that more than 140 people from 65 local start-ups have already moved in.

A team of Jones Lang LaSalle professionals led by Managing Director Jack Keenan is serving as 1871′s strategic real estate advisors.  They helped the 1871 locate the space, negotiate a lease and build out the space to their specifications.  JLL is also serving as facility manager.

Last week, the full JLL Chicago team hosted more than 150 clients and guests during an invite-only cocktail party at the space that was featured a sepcial appreance and remarks from Illinois Gov. Pat Quinn.

Quinn (at left told those in there that the digital/high-tech sector is an increasingly important component of the Illinois economy. Nurtuting the tech sector, he said, is a key priority for the state as leaders look for ways to attract new jobs, new corporate investment and a younger, more educated workforce.

To read more about 1871 Chicago, read this story in today’s Chicago Tribune or visit the 1871 website.

New Roosevelt U. vertical campus adds “skyline sizzle”

The esteemed Chicago Tribune architecture critic Blair Kamin offered his review today of Roosevelt University’s new South Loop vertical campus, which is scheduled to open next week.

Kamin’s review of the design, by Chicago-based VOA Associates, was, in a word, glowing, with references to the building a “a dazzling skyline object” that’s ”worth celebrating.”

Jones Lang LaSalle’s Project and Development Services team served as project manager for this one-of-a-kind $123 million development, which will be completed on time and under budget.

To read the Pulitzer Pirze-winning Kamin’s full critique, click here.

A new era at One East Wacker

Courtesy of Chicago Sun-Times

The Chicago Sun-Times captured a terrific snapshot (left) of some changes taking place at One East Wacker (far right side of photo), where the giant blue ”Unitrin” sign that has adorned the top of the building for many years was replaced this weekend with a new “Kemper” sign.

Unitrin, a financial services company that owns the building and is its anchor tenant, changed its name to Kemper Corporation late last year.

Jones Lang LaSalle’s Monica Moore and John Beason are the exclusive leasing agents for the 510,000-SF building, where approximately 27,000 SF of contiguous space is currently available for lease on floors 14 and 15.

To learn more, download the brochure and floorplans here.

Can trendy tech firms keep their creative cultures in downtown offices?

The recent news that online food-delivery service GrubHub is moving its global headquarters from a Bucktown loft to a new sapce at the Burnham Center in the Loop is being seen as the latest sign that the former start-up, which now employs more than 250 people, has outgrown its humble roots.

But the announcement also raised eyebrows among some observers who wonder how the trendy firm can retain it’s casual, creative culture in a corporate office building.

Crain’s Chicago Business weighs in on the subject here and asks JLL’s Matt Carolan about the factors at play when start-ups “grow up” and move downtown:

“These tech companies start in Ravenswood, in Wrigleyville, in Bucktown, but  eventually they hit a size where they can’t grow because there’s just not enough  concentration of office space in those areas. Plus, people get older. They have kids and move to the suburbs, and then you have to figure out how to attract a senior executive. If  the only way to get to your office is by car, you’re unlikely to be able to get  that talent.”

Carolan also notes that many fast-growing start-ups have “split the difference” and located in River North or the west side of the West Loop. But with options in those areas dwindling, space in the heart of downtown is becoming a more realistic option.

Chicago retains spot as one of the world’s top 10 ‘global cities’

The consulting firm A.T. Kearney is out with the 2012 edition of its biannual Global Cities Index, and Chicago is once again near the top of the list, ranking at No. 7 in the world behind New York, London, Paris, Tokyo, Hong Kong and — by a slim margin — Los Angeles.

The report ranks cities in five areas: business activity, human capital, information exchange, cultural experience, and political engagement.

Click here to read the full report.

Office tenants still king in the suburbs

With high vacancy rates still plaguing the 98 million-square-foot suburban chicago office market, tenants are taking advantage of opportunities to extend or expand their current leases or upgrade facilities at favorable rates, JLL’S Dan McCarthy tells Crain’s Chicago Business:

“Tenants are being opportunistic. If they’re in a Class-B  building, they can maybe move to a Class-A building at a similar cost structure.  We’re definitely seeing a flight to quality.”

According to Jones Lang LaSalle research, the overall office vacancy rate in the suburbs rose slighly during Q1 to 24.6 percent, up from 24.5 percent at the end of Q4 2011. With the exception of last quarter, the rate has fallen slowly but steadily since peaking at 25.4 percent in Q2 2010. (See chart at left courtesy of Crain’s.)

Click here to read the full Crain’s story about the suburban office market.

HBR: Five ways to make your office space more creative

No less an authority than the Harvard Business Review weighs in today on the topic of creating creative and collaborative workplaces — a growing area of focus for the JLL team.

The article, by Stanford University Institute of Design professors Scott Witthoft and Scott Doorley, offers five simple tips for businesses looking to improve their less-than-ideal workplaces without moving or breaking the bank.

One example:

“Ambience has huge impact while often receiving little attention, or credit.  Be aware of how a room feels, and act like a good host.  Simply adding multiple sources of warm light (e.g. floor lamps) and opening some windows can change the tone of a meeting space — and of the meeting itself — from institutional and routine to refreshing and special.  If your culture can bear it, add in a little music as people enter to perk people up.”

To read the full article, click here.

More momentum in local industrial market

More signs of positive momentum in the Chicago-area industrial leasing market … this time in the I-355/DuPage Corridor where only five (5) blocks of warehouse space larger  than 250,000 SF are still on the market..

From Crain’s Chicago Business:

Kerry Ingredients & Flavours, a food, ingredients and flavor supplier, has signed a lease to occupy all of a 298,123-square-foot warehouse in west suburban Carol Stream, according to Jones Lang LaSalle. The building at  284-314 E. Lies Road in the Carol Point Business Center, will serve as a  warehouse and distribution center for Kerry Ingredients, the largest division of  Tralee, Ireland-based Kerry Group PLC …  Jones Lang LaSalle Managing Directors Trevor Ragsdale and Michael Burns represented Kerry in the deal.

Jones Lang LaSalle CEO Colin Dyer on CNBC

Jones Lang LaSalle CEO Colin Dyer appeared earlier this week on CNBC‘s popular “Fast Money” program to discuss what he called “a broad-based increase in demand for commercial real estate in the U.S.”

Dyer said the U.S. CRE market is recovering faster than the Asian and European markets and that the tech and energy industries are driving the demand in the office sector (see post below).

To watch the full 3-minute video clip of his appearance, click here.

Tech industry driving office market recovery

As the U.S. office leasing market continues its climb back from the dowtnurn, high-tech companies are leading the way.

A new report from Jones Lang LaSalle that was the subject of this article in today’s Wall Street Journal finds that companies in the tech sector accounted for 29% of all growth in the U.S. office market in 2011, adding an estimated 10.2 million square feet of space (or nearly the size of three Willis Towers).

And what’s more, much of that absorption has taken place in cities outside of Silicon Valley, including such seemingly unlikely locales like Austin, Pittsburgh, Cambridge, Mass., Brooklyn, and — yes — Chicago.

One such example here locally is the recent lease of a 60,000-SF space at the Merchandise Mart by the Chicago Entrepreneurial Center, which is opening a shared workspace for digital startups called 1871. Jones Lang LaSalle brokered the lease for the CEC, is coordinating the build-out of the space, and will also manage the facility once it opens on May 2nd.

To learn more about the high-tech boom, read the full JLL High-Tech Outlook Report here.

View Space: 150 N. Michigan

View from the 34th floor inside 150 N. Michigan Avenue (a.k.a The Crain Communication Building), which is currently being marketed for sale by the Jones Lang LaSalle Investment Sales team.

Leasing at the building is also overseen by Jones Lang LaSalle.  Contiguous spaces ranging in size from 1,250 to 26,000 SF are currently avaialble.

NOTE: This is the latest in an occasional look at some of city’s best office views.

Industrial spec development returns in Chicago area

The recent news that developer Ryan Cos. is planning to break ground on a 600,000-square-foot spec warehouse in Romeoville is among the first tangible evidence that speculative industrial development is back in Chicago.

Keith Stauber, Midwest regional managing director of Jones Lang LaSalle’s Industrial Services division, says he expects to hear more such announcements in the coming months.

“Only five new buildings larger than of 500,000 SF or more are left in the whole Metro area and there are deals pending on two of those. Just 18 months ago, there were 12 options. The increased demand is coming from the food and beverage industries as well as consumer product makers and 3PLs.”

You can read the full story about the project in Crain’s Chicago Business here.

Survey: Office spaces will continue to shrink

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A new survey from industry group CoreNet Global reaffirms what most people who work in an office already know: individual office spaces are getting smaller and smaller.

And that trend shows no signs of abating anytime soon. The survey of 465 corporate users found that 40 percent of companies plan to reduce the allocation of office space per person to 100 square feet or less within the next 5 years.

The average space per worker in 2017 will be 151 square feet, compared to 176 square feet today and 225 in 2010.

The survey results mirror the strategies of most corporate users represented by Jones Lang LaSalle, all of whom are looking to use space more efficiently in an era of increased scrutiny on overhead expenditures.

Telecommuting, shared workspaces and a decreased need for paper document storage are other factors driving the trend.

Click here to read CoreNet’s news release on the study.

JLL named as one of “World’s Most Admired Companies”

For the fourth time, Jones Lang LaSalle has been named to Fortune magazine’s list of the “World’s Most Admired Companies,” the definitive report card on corporate reputations.

The magazine recognizes JLL as one of the world’s leaders in real estate based on a variety of factors including global competitiveness, financial soundness, social responsibility and use of corporate assets.

Midwest Real Estate News  managing editor Dan Rafter editorializes on the news on his blog, and flattered us with this comment:

“ …No one who has worked with Jones Lang LaSalle — and we at Midwest Real Estate News have worked with the company a lot — should be surprised by the company’s inclusion on this list.”

Our thanks to Dan, the editors of Fortune and (of course) our clients, who make it all possible.

JLL report takes a peek inside Chicago’s office buildings

The 2012 edition of Jones Lang LaSalle’s annual Chicago Skyline Review is hot off the presses, and the results are already catching the attention of the Chicago business media.

The report — which analyzes the stacking plans of the CBD’s 54 most important office buildings and gives a snapshot of the overall leasing climate here –  uncovers a “tale of two cities” of sorts, as is detailed in today’s Chicago Sun-Times.

The bottom line: for the majority of users (ie, less than 25,000 SF), Chicago remains a tenant’s market with plenty of available options. But with a dearth of large available spaces (ie, 100,000 SF and up), the market is significantly tighter on the top end. With no new construction in sight for several more years, select landlords with large available blocks are aleady testing the waters with higher asking rents.

As more and more local companies announce plans to boost their local payrolls —  and with a variety of suburban, out-of-state and international companies making moves here – leverage could begin to shift more firmly toward landlords as soon as next year.

To request a copy of the JLL Chicago Skyline report, send an email to Chicago.Skyline@am.jll.com

To read the full Sun-Times story click here.

Angel investors betting on Chicago’s tech startups

More good news for Chicago entrepreneurs, particularly those working in the tech sector.

According to a story in this week’s Crain’s Chicago Business, Chicago tech startups received $16.1 million in angel investment last year, up more than 38 percent from 2010. The growth here rate far outpaces the overall national trend. Across the U.S., ”angels” upped their investments by just 4.4 percent year-over-year.

Chicago’s strong numbers reflect an overall surge in start-up activity here spurred in part by “a sense of euphoria” surrounding locally based Groupon’s $700 million I.P.O. last fall, says George Deeb, managing partner of the startup advisory firm Red Rocket Partners. He tells Crain’s:

“There are a ton more startups in Chicago today than there have ever been, and what’s driving that excitement is that entrepreneurs have seen what happened with Groupon and are motivated to build the next big thing.”
Click here to read the full article from Crain’s.
 

East-West Corridor poised to build on 2011 momentum

With more than 36 million square feet of office inventory, the East-West submarket is by far the largest in the Chicago suburbs.

In 2011, the East-West saw more than 650,000 square feet of total net absorption, thanks to deals (all brokered by the JLL tenant rep team) by Comcast, CA Technologies and HAVI Golbal Solutions.

JLL’s Jeff Shay, who is the leasing representative for a variety of East-West buildings — including Westbrook Corporate Center (above), tells the Illinois Real Estate Journal that he expects the positive momentum to continue in 2012.

“We’re coming off of 2011, which was a good year for both ends of the market. If we don’t have any big negative surprises from the overall macro economy, we’re cautiously optimistic we’ll continue to see more absorption. I think the vacancy rate is going to drop again in 2012. It won’t be a huge drop but it’s definitely going to drop down.”

To read the full Illinois Real Estate Journal article, click here.

150 N. Michigan Ave. on the block

The Jones Lang LaSalle Chicago Investment Sales Team announced earlier this week that they have been hired by the owners of 150 N. Michigan Avenue (formerly the Smurfit-Stone Building) to offer the building for sale.

JLL’s Bruce Miller tells Crain’s Chicago Business that the offering is yet another sign that investors are getting off the sidelines:

“[The current owners] believe the capital markets are strong right now. There’s a lot of debt available and there are a lot of buyers out there looking for good investment opportunities.”

You can read the full Crain’s story on the offering here.