Choose DuPage Makes a Point for the Western Suburbs

THE WESTERN ACCESS O’HARE PROJECT

O’Hare International Airport is the nation’s second busiest airport. In 2005, O’Hare transported nearly 77 million passengers and 1.7 million tons of cargo – serving as a vital transportation link between the Chicago region and the rest of the world. However, its existing infrastructure is the cause of heavy delay and congestion. Currently, O’Hare is accessed from the east. The Western Access O’Hare project will give western access to the airport with an addition of a western roadway, allowing the region to meet future transportation needs.

THE PROJECT

The project begins with an addition of nearly 50 expressway lane miles through the conversion of Thorndale Avenue into a limited-access four-lane highway, creating an extension to the Elgin-O’Hare Expressway. With this extension, a bypass or ring road will then be created in order to connect I-90 and I-294.

CONSIDER THE FUTURE

The increased transportation and infrastructure will bring with it a modern and diverse economic base that will transform the region. The area will become a prime location for businesses to locate and future developments.

CONSIDER THE BENEFITS:

▪   Location – At the heartbeat of the Midwest – the center of the nation’s busiest transportation hub

▪   Land – Enough to build big

▪   Workforce – Skilled, educated, competitive labor

▪   Financial Benefits – Savings on fuel, time, recruitment, incentives

▪   Quality of Life – It’s all here – education, entertainment, culture

With unparalleled proximity to the airport, I-90, I-294, and I-290, businesses looking to locate in the newly available developments will be taking advantage of transportation gateways to the rest of the world. In an increasingly global economy, enhanced access to national and global markets, along with a reduction in delay time, will enhance the competitiveness and productivity of local businesses while facilitating economic growth.

ECONOMIC IMPACT

The benefits from this project are not only compelling, but would completely transform the economy of the region. The following is a list of some of the economic benefits of the project, found by the Elgin-O’Hare Western Bypass Advisory Council:

▪   Opportunity exists to create 65,000 jobs by 2040

▪   Local tax revenues are expected to increase by $29 million annually (based on 2010 projection)

▪   13,450 jobs will be created annually in the region during construction

Travel delays will be reduced, saving $145 million annually by 2040

Spec Warehouse construction on the rise

In Chicago, strong absorption and occupancy and a shortage of top-tier industrial space is fueling a rapid increase in spec construction, said Scott Marshall, executive managing director for CBRE's Industrial Services, Americas, in presenting the company's 3Q 2013 U.S. Industrial Marketview. Of the 5.5 million square feet under construction in the market, almost half broke ground in the third quarter. 

Q3 Industrial Property Improving

Let's start with a 8.3% vacancy rate, which is a great number on a national basis and on the other side occupancy rates are up by 1.6% on a year over year basis. The industrial market is fast approaching the pre recession levels overall and in some factors has already surpassed it.  Even better is the fact that momentum is still positive with 70% of national markets showing increases, indicating a widespread improvement.  Chicago rents are up 3.2% over last year which is a good sign for owners and owners are not as generous on the lease give aways that they once were.  While improving, rates are one of the areas that have not yet reached their pre recession highs.

Buildings in the 100K SQ FT and below that were hit hard in the recession are showing a remarkable come back now and are the fastest growing segment of the industrial market.  Even the CoStar category of industrial building- old and small (40KSF and below) are finally showing improvement.

Gloom and Doomers predicted a collapse of the commercial real estate market. Why didn't it happen?

There is an interesting article in Fortune Magazine explaining why the commercial market didn't totally melt down to the extent the residential market did.  To quickly summarize:

1. While Commercial real estate was overbuilt it was not to the point the housing market was.  In fact until 2005 residential developments used areas that customarily would have been used for commercial development

2. Many owners of commercial properties still had income in the form of rent payments from tenants unlike home owners who lost their income when they lost their jobs. This allowed many to at least limp along and hold out until better times arrived.

3. Banks renegotiated loans and rolled balloon payments further down the road to allow the market to recover.  Of course there were foreclosures, but there were also third party sources with money to spend, and were able to scoop up income producing properties at bargain prices.

This is not to say that the commercial real estate market did not have its problems, values dropped on average of 40% and are still recovering.  There were foreclosures and a lot financial pain, but a complete meltdown as predicted NOPE.

Here is a link to the article:

http://finance.fortune.cnn.com/2013/09/23/commercial-real-estate-hilton/

News Release from CoStar indicates a pick up in nonresidential construction

A new report by Fitch Ratings predicts that the pace of new U.S. nonresidential construction will likely pick up headed into 2014, bolstering forecasts by CoStar Group economists during midyear economic reviews who expect modest rises in new supply for some commercial property segments.

Lombard Chamber Golf Outing

A little hot, but what a great day.  Another successful golf outing by the Lombard Chamber.

Retailers Joining in on the Recovery

Recent analysis by RBC Capital Markets shows  demand from retailers, as evidenced by planned store openings, continues to grow.  At the same time plans for new supply, either among regional malls or community centers, remains subdued with little uptick in planned deliveries.   National tenants, especially franchises, continue to scoop up vacancy among spaces of 5,000 square feet and smaller. At the same time, large box users are struggling to find sufficient space to satisfy planned store openings, RBC noted. It is  anticipated that vacancy rates and asking rents will continue to improve based on this information.