Chicago: Are We About to Emerge From The Doldrums?
- Apr 14, 2009
Wikipedia explains “the doldrums” as a reference to being in a state of listlessness, despondency, inactivity, stagnation, or a slump. Sound familiar? It surely is representative of our economy and the last six months in Chicago Metro real estate.
I would hazard to guess that most of our existing, or potential new clients, have felt just like the sailors of old, stranded in a calm, waiting for the winds of change to rise once again, so they can begin to see the skies clear, and offer a glimpse of hope to guide them back on course.
There are signs of “clearing skies.” The Dow has grown from 6500 to surpass 8000 in just the last thirty days, usually a harbinger of a recovering economy. During that same time period, companies that have sound fundamentals, and a recent and proven track record have also shown comparable growth in their share value.
The developer, Hines Interests LP’s apparent decision to postpone a planned 50-story tower at the northeast corner of Lake and Canal, has created an opportunity for high-rise building owners to compete for that tower’s planned tenants, a scenario that would reduce the current inventory of available space in the Central Business District.
Michael Burgess, a British author, was once quoted as saying, “I have also believed in empowering the individual and believe there is a degree of inertia in big government that hampers the ability to respond to a rapidly evolving crisis.”
Those same empowered and insightful individuals will see this “clearing of the sky”, and recognize that the economic slowdown we are experiencing will constrain near term new development. As already planned current developments are delivered with significant pre-leasing commitments, we will see less inventory and opportunities for rental rates to continue to deteriorate. History, coming out of previous recessions, supports this theory.
Accordingly, this is a very good time to make those bold real estate decisions, be a decisive tenant, secure an array of current opportunities, and have one less decision to make as the economy continues to make its recovery and your business can take advantage of the “economic bounce” and get back on course, singly focused on growing your business, with that real estate decision behind you.