Building boom, who is moving into these buildings..... (Chicago: apartments, condos)

[westburbsil]

Lived up here whole life and right now Chicago is in another building boom downtown. Just go to Chicago Curb if you need a list, but outside of NYC(which is going crazy and has the demand), Illinois and Chicago is losing population and there is a good reason for it.

Property Tax with 10K limit now, unfunded pensions to raise property tax, etc. Now I know those who move to these buildings could care less about tax deductions when paying an extreme so much and I also realize a lot of the population lost is on the south and west sides.

But many of these new buildings are mixed and many are offices.

The skyline will look even more beautiful, but just curious for the demand? Would love any insight.

[TBideon]

A lot of it is musical chairs where existing businesses want more modernised buildings (i.e. CNA moving to the ugly new glass building or Bank of America building along Wacker), consolidations (i.e. Northern Trust moving to the former CNA building), poaching (McDonalds to West Loop), hotels (tens of millions of tourists annually and going up), commercial to residential conversions (like Wrigley), new start ups and WeWork companies (fillling up Merchandise Mart and a number of other buildings), etc.

Also, there are a ton of Russian/Chinese/Arab investors looking to keep their money somewhere - and it can't all go to New York or Miami

Plus, anecdotally, the economy is booming in law, medicine, insursance and finance locally - and companies are growing in those sectors. Tech could be doing better.

[OKParker]

Originally Posted by TBideon

A lot of it is musical chairs where existing businesses want more modernised buildings (i.e. CNA moving to the ugly new glass building or Bank of America building along Wacker), consolidations (i.e. Northern Trust moving to the former CNA building), poaching (McDonalds to West Loop), hotels (tens of millions of tourists annually and going up), commercial to residential conversions (like Wrigley), new start ups and WeWork companies (fillling up Merchandise Mart and a number of other buildings), etc.

Also, there are a ton of Russian/Chinese/Arab investors looking to keep their money somewhere - and it can't all go to New York or Miami

Plus, anecdotally, the economy is booming in law, medicine, insursance and finance locally - and companies are growing in those sectors. Tech could be doing better.

Tech is doing well in absolute numbers, but relative to California and NYC we are lagging pretty far behind. I see no reason why Chicago can't do more with tech companies, so I think it will continue to grow here, but California will likely maintain higher growth with the majority of new jobs.

[TBideon]

My hunch is it's related to the universities here. Boston, California, North Carolina and NYC have so many schools that dominate in tech. U of C, Northwestern, Loyola and DePaul just do not share that reputation; their strengths are in more traditional areas.

[LeotheOrangeCat]

the 9.9%

https://www.theatlantic.com/magazine...ocracy/559130/

[ChiGuy2.5]

I think this article does the best job of explaining what you're asking about.

https://www.dnainfo.com/chicago/2016...hicago-shrinks

[OyCrumbler]

Originally Posted by TBideon

My hunch is it's related to the universities here. Boston, California, North Carolina and NYC have so many schools that dominate in tech. U of C, Northwestern, Loyola and DePaul just do not share that reputation; their strengths are in more traditional areas.

That's an interesting point. I believe both UIC and IIT rank better than Loyola and DePaul when it comes to computer science. U of C and Northwestern rank well, but aren't at the very top. Chicago does do pretty alright for itself overall though. Perhaps the city should actively poach harder from UIUC, the University of Michigan, and the University of Wisconsin?

[Chicago60614]

They're building around 5,000 to 8,000 residential units downtown every year, and those units are what's going into the dozens of highrises being built - aside from a few hotels and office buildings.

Essentially the demand is just people wanting to live downtown and the general boom of the downtown employment situation. It's not just "musical chairs", the downtown area has gained around 170,000 jobs in the past 7 years. Those jobs are being filled with everyone who's moving into the apartment buildings.

Another big report just came out saying net absorption is actually hitting peaks this year, meaning the net gain in move-ins downtown over move-outs.

The downtown and near north/south/west sides of the city are seeing around 10,000 new residents every year. The reason the city as whole is holding stagnant is because of heavy losses on the west/south sides.

The central areas are booming, west/south are losing, with the southwest and far northwest showing little change, with additional pickups on the north side and especially the Milwaukee corridor.

[MassVt]

Originally Posted by TBideon

A lot of it is musical chairs where existing businesses want more modernised buildings (i.e. CNA moving to the ugly new glass building or Bank of America building along Wacker), consolidations (i.e. Northern Trust moving to the former CNA building), poaching (McDonalds to West Loop), hotels (tens of millions of tourists annually and going up), commercial to residential conversions (like Wrigley), new start ups and WeWork companies (fillling up Merchandise Mart and a number of other buildings), etc.

Also, there are a ton of Russian/Chinese/Arab investors looking to keep their money somewhere - and it can't all go to New York or Miami

Plus, anecdotally, the economy is booming in law, medicine, insursance and finance locally - and companies are growing in those sectors. Tech could be doing better.

A lot of Chinese investment in Boston, too. Evident everywhere..

[emathias]

Crains recently had an article about demographic changes in Chicago. The central area and, to a lesser extent, the popular north and northwest side neighborhoods are rapidly adding people with six-figure incomes. Those are the people choosing to live in the new buildings. Some of that is just adjusting the mix of where people in the region choose to live, and some of it is high-income jobs replacing or adding to the downtown jobs scene. Most high-end service industry categories are adding headcount in the current economy. I've lived in the Central Area for most of the time since 1999, and have been a strong earner during that entire time, especially after 2002. When I first lived here, Cabrini Green still mostly stood and today it's gone. Between 2000 and 2010, about 10,000 residents left Cabrini Green, yet the Near North Side overall still grew by 10,000 people, which basically means that 20,000 people moved in, offset by the 10,000 person loss of Cabrini. The new people were nearly all professionals or students, and mostly professionals. That means that they had plenty of money to pay for new units - mostly new condos before 2010, and now mostly new apartments.

So who/what is filling those towers? Almost all new high-income people. Financial people, tech people, consultants, lawyers, doctors, etc. It's cool to see surface parking lots turn into buildings and to benefit from the high density supporting more businesses and shops, but it also means there are no more cheap places to eat in places like River North anymore. And while I can afford to pay River North prices, I liked having the option of eating for cheap, too. Now I either have to settle for a burger or head into the neighborhoods if I want cheap food.