Kenosha. Lake. Dupage. Cook. Kankakee

Transcription

1 Map Kenosha 94 PPR undamentals Overview Winnebago Boone Mchenry Lake ROCKORD 9 Dekalb Kane Dupage Cook Kendall 8 GARY La Porte 8 nam 39 8 La Salle Grundy Kankakee all Summary of Last Twelve Months vs. Historical Minimum, Maximum, and Average Will Lake Porter Map Layers County PPR Markets U.S. Cities Starke State Capital Major Cities Secondary Cities Miles Pulaski 21 Jasper Property & Portfolio Research Apartment Office Retail Warehouse Hotel Current Vacancy* Net New Supply (S)** (S)** 3.4% 3,151-3, % 6.1% 17 12,833-3,118 15,311 99:4 91:4 92:3 87:4 2:1 87:4 15.% 5,344-6, % 19.4% ,479-6,491 15,398 82:1 93:1 94:3 87:3 2:1 87:4 11.5% 4,194-1, % 22.% 75 7,978-5,631 12,16 :3 82:2 83:4 9:2 82:1 :1 1.% 5,672-1,41 4.1% 1.% 552 9,711-2,428 9,835 82:1 2:1 92:4 :4 92:2 :2 6.3% 1,297-6, % 6.3% ,338-6,851 3,337 98:1 2:1 93:1 88:1 2:1 :3 *Occupancy for Hotels **Apartment and Hotel data are in units. 1Q22 PPR undamentals 22 by P R O P E R T Y P O R T O L I O R E S E A R C H, L L C. All Rights Reserved.

2 PPR undamentals Analysis/Economy Notable Economic and Real Estate Market Events ECON Chicago s employment fell 2% year-over-year as of March, doubling the pace of job losses at the national level. The manufacturing and services sectors have experienced the largest declines over the last year, while a slowdown in commercial construction has negatively impacted employment growth in the previously resilient construction sector. Locally headquartered Arthur Andersen is a wildcard for the metro, as layoffs continue to mount, totaling over 7, nationwide. The local attrition has been mitigated somewhat, as many of these workers are already being reabsorbed by competing accounting firms including Deloitte & Touche and KPMG. Motorola s struggles continue as the company will close a distribution center in Harvard in the next quarter, eliminating 85 jobs. However, not all the news is bad. There are several companies still expanding in the metro, including E-peopleserve, which is moving their headquarters from London to Chicago, and New York-based Zurich Scudder Investments, which plans to move its U.S. mutual fund business to Chicago, creating another 5-6 jobs locally. APT Weak net absorption, which began at the end of last year, is driving the vacancy rate higher in Chicago s traditionally tight apartment market. The glut of condo product on the market has created competition for rental apartment owners, as would-be renters are enticed into buying. Also, corporate belt tightening has led to the release of over 1, corporate apartments over the last year, further deteriorating fundamentals. Rental construction remains steady as well, with the focus of new development in the closer in River North submarket. John Buck Co. s 254-unit 2 East Erie and Magellan Development s 764-unit Grand Plaza Development are both underway. O The office market continued to soften through the first quarter, as a high availability of sublease space continues to plague the metro despite a steady slowdown in construction. With vacancy rates over 2% on average, the suburban markets continue to remain weaker than the, but sublease space in the is rising at a faster rate, with over 5 million S available as of the first quarter. The fallout from Arthur Andersen is contributing to the overhang of space in the as well, as the firm leased nearly 9, S downtown. However, competing companies have already begun to increase their space needs in order to house added staff acquired from Andersen. Deloitte & Touche recently signed a three-year 12, S lease at the Aon Center in the East Loop to accommodate newly hired former-andersen employees. RET Despite a slowdown in consumer spending, retail construction has remained steady over the last year, holding the economic vacancy rate in the mid-teens. While much of the recent construction has taken place in collar counties of Kane, McHenry and Kendall, strong residential growth in the has encouraged a spate of new retail construction recently. Home Depot is making its first foray into urban infill with a two-story, 91, S store going up in Lincoln Park, and the proposed rehab of the prime 2.8 acre Block 37 site in the West Loop is coming closer to reality as developer selection is close to being finalized. The fourteen local Kmart stores that were vacated after the firm filed for Chapter 11 bankruptcy protection earlier this year are leasing up quickly. Kimco Realty Corp. recently acquired six of the fourteen leases, with plans to rerent the stores to other big box retailers including Home Depot, Burlington Coat actory, Borders Books, and Linens 'n Things. WHS Build-to-suit activity has been dominating construction in the warehouse market. The new intermodal facility in Joliet is attracting development in the Southwest suburbs/will County. CenterPoint Properties Trust says it will begin construction next month on a 48, S buildto-suit warehouse for Potlatch, and Madison Warehouse will take 266,68 S at the 386-acre Rock Run Business Park nearby. The I-88 Tollway in DuPage County will also see a rise in construction, with Prime Group Realty Trust breaking ground on a 35, S distribution center for Hyundai Motor America in Aurora during the second quarter. Steady construction amid slowly recovering demand will keep warehouse vacancies relatively high over the short term. HOT Occupancy rates continue to remain at cyclical lows, hovering near 6%. The dearth in financing has led to the deferral of several projects, including a 45-room Omni hotel in Rosemont near O Hare and an Adam s Mark hotel in the. Construction remains low, with under 1, rooms expected to complete this year. Demographic Trends Annual Growth Rates 22* Category Market U.S. Market U.S. Market U.S. Market U.S. Population 8,41 288,644.4% 1.% 1.% 1.2%.4%.9% Households 3,12 17,714.7% 1.3% 1.% 1.3%.5% 1.% Median Household Income $58,636 $44,333 4.% 4.4% 4.5% 3.7% 3.3% 3.1% Apartment-Renting Households 1,21 35,788 1.% 1.7% -.7%.5%.4% 1.% Real Retail Sales Per Capita $4,447 $4, % 1.4%.6% 1.7% 1.8% 1.7% Employment Trends 22* Annual Growth Rates Location SIC Category Employment Quotient Market U.S. Market U.S. Market U.S. Total Services 1, % 4.3% 3.2% 3.7% 2.2% 2.5% Business Services % 6.6% 5.5% 6.2% 2.7% 3.% Other Services 1, % 3.8% 2.4% 3.% 2.% 2.4% Retail Trade % 2.5% 1.1% 2.% 1.% 1.6% Government % 1.6% 1.% 1.3%.2%.7% Manufacturing % -.6% -.6% -.6%.3%.1%.I.R.E % 2.2%.6% 1.5%.4%.9% Wholesale Trade % 1.3% -.3% 1.4% 1.5% 1.2% Trans., Comm., Util % 1.1% 1.6% 2.%.8% 1.1% Construction % 1.4% 2.9% 4.2% -.1%.3% Mining % -6.% -.2% -1.6% -1.1% -1.1% Total Employment 4, % 1.9% 1.4% 2.% 1.2% 1.4% Office-Using Employment 1, % 3.% 2.3% 2.9% 1.6% 1.9% Trucking/Warehouse Employment % 1.5%.4% 1.7% 1.3% 1.2% *All units (except for dollar denominated figures) in thousands. Current Economic Indicators Employment Labor orce Unemployment Employment Net Migration () Cost Indices (U.S. = 1) Growth 3/2 Growth 3/2 Rate 3/2 Volatility Ratio 21 Business Living -2.%.4% 6.3% Sources: PPR; Economy.com 1Q22 PPR undamentals 22 by P R O P E R T Y & P O R T O L I O R E S E A R C H, L L C. All Rights Reserved.

3 Supply, Demand, and Vacancy PPR undamentals Apartment Demand & Supply (Units) 18, 16, 14, 12, 1, 8, 6, 4, 2, -2, -4, Apartment Market Statistics (Units) Vacancy Rate Percentage Vacant Apt. Vacancy 2.8% 2.7% 2.4% 2.5% 3.2% 3.6% 3.5% 3.3% 3.2% 3.% Apt. 3,829 3,65 4,487 2,295-2, ,267 2,371 2,833 3,681.6%.5%.7%.3% -.4%.%.5%.4%.4%.5% Multifamily 12,756 9,788 1,68 7,331 1,865 5,6 2,68 2,524 3,15 4, % -23.3% 8.4% -3.9% 48.2% -53.9% -46.5% -5.8% 23.% 4.1% Net Apt. Completions 2,551 3,9 2,56 2,73 2,886 3,27 2,16 1,543 1,699 2,237 Apt. Inventory 677,289 68, ,84 685,57 688, , ,77 695, ,12 699,249.4%.4%.4%.4%.4%.5%.3%.2%.2%.3% Apt. Rent Index % 9.4% 3.4% 4.4% -1.3%.2%.3% 1.2% 2.1% 3.3% PPR/Dodge Pipeline Summary Current Activity (Units) Multifamily by Subclass 14, Change in Rent vs. Change in Rent 1% Bidding inal Pre- Deferred Abandoned 2, 4, 6, 8, 1, 12, 14, 16, 18, 2, Apartments Townhouse/Condo Low Income Unclassified (Units) 5,257 11, % 31% 68% % 1% 12, 1, 8, 6, 4, 2, % 6% 4% 2% % -2% Sources: PPR; McGraw-Hill Construction - Dodge; National Real Estate Index 1Q22 PPR undamentals 22 by P R O P E R T Y P O R T O L I O R E S E A R C H, L L C All Rights Reserved.

4 Supply, Demand, and Vacancy Demand & Supply (S) 2, 15, 1, 5, -5, Vacancy Rate PPR undamentals Office Percentage Vacant , Office Market Statistics (S) Vacancy % 1.5% 1.3% 1.5% 14.3% 15.4% 14.6% 13.7% 13.1% % 7,358 6,713 4,962 5,694-6, ,44 3,749 3,15 3,88 3.% 2.7% 1.9% 2.2% -2.3% -.2% 1.7% 1.4% 1.1% 1.1% 4,611 6,838 7,961 9,134 4,93 2,299 1,335 1,258 1,8 2, % 48.3% 16.4% 14.7% -46.3% -53.1% -41.9% -5.8% 43.1% 58.8% 1,94 2,76 4,888 7,18 6,224 3,43 2,131 1,234 1,9 1,463 Inventory 286,69 288, ,663 3,681 36,95 31, , ,7 314,79 316,173.7%.9% 1.7% 2.4% 2.1% 1.1%.7%.4%.3%.5% Rent Index % 2.8% 6.1% 6.4% -8.4% -4.5% -.2% 2.9% 2.7% 4.% PPR/Dodge Pipeline Summary Bidding inal Pre- Deferred Abandoned Current Activity (S) 2, 4, 6, 8, 1, 12, 14, 16, 18, Low Rise Mid Rise High Rise Office R&D Unclassified Office by Subclass (S) % 7,845 51% 3,495 23% 3,897 25% - % 61 % Change in Rent vs. Change in Rent 1, 15% 9, 8, 1% 7, 6, 5% 5, 4, % 3, 2, -5% 1, -1% Sources: PPR; McGraw-Hill Construction - Dodge; National Real Estate Index 1Q22 PPR undamentals 22 by P R O P E R T Y P O R T O L I O R E S E A R C H, L L C. All Rights Reserved.

5 Supply, Demand, and Vacancy PPR undamentals Retail Demand & Supply (S) 14, 12, 1, 8, 6, 4, 2, -2, Retail Market Statistics (S) Vacancy Rate Percentage Vacant Vacancy 14.9% 13.2% 1.1% 9.2% 11.1% 11.5% 1.9% 1.7% 1.6% 1.5% 5,511 8,319 11,953 6,425-1,266 2,55 4,75 3,343 4,296 4, % 3.7% 5.1% 2.6% -.5%.8% 1.6% 1.3% 1.7% 1.7% 6,556 6,75 6,868 5,752 6,347 3,61 3,854 5,11 5,951 6, % 3.% 1.7% -16.2% 1.3% -43.3% 7.% 32.6% 16.5% 4.9% 4,637 4,244 4,135 4,511 4,445 3,651 2,398 3,17 4,446 4,973 Inventory 263, , , , , ,87 287,269 29, , , % 1.6% 1.5% 1.7% 1.6% 1.3%.8% 1.1% 1.5% 1.7% Rent Index % 7.% -6.2% 6.9% -5.7% -1.1% 1.9% 1.1% 1.5% 1.5% PPR/Dodge Pipeline Summary Retail Current Activity by Subclass Change in Rent vs. (S) Change in Rent Bidding inal Pre- reestanding Stores Deferred Neighborhood Center Community Center Abandoned Regional Super Regional Outlet Unclassified Sources: PPR; McGraw-Hill Construction - Dodge; National Real Estate Index 1, 2, 3, 4, 5, 6, 7, 8, (S) % 2,186 35% 1,111 18% 153 2% % - % - 1,822 % 29% 8, 7, 6, 5, 4, 3, 2, 1, 1Q22 PPR undamentals 22 by P R O P E R T Y P O R T O L I O R E S E A R C H, L L C. All Rights Reserved % 6% 4% 2% % -2% -4% -6% -8%

6 Supply, Demand, and Vacancy Demand & Supply (S) 12, 1, 8, 6, 4, 2, Vacancy Rate PPR undamentals Warehouse Percentage Vacant , Warehouse Market Statistics (S) Vacancy % 8.% 7.2% 7.3% 9.5% 1.5% 8.7% 7.7% 7.5% % 2,263 6,35 9,538 8, ,794 4,524 3,427 3,521 1.% 2.9% 4.2% 3.7%.%.2% 2.8% 1.8% 1.3% 1.4% 4,135 8,363 5,179 5,752 6,522 3,751 1,814 2,277 3,564 4, % 12.2% -38.1% 11.1% 13.4% -42.5% -51.6% 25.5% 56.5% 13.8% 4,232 7,682 8,152 9,711 6,461 3,71 1,919 1,874 3,49 3,698 Inventory 238, , , ,485 27, , , ,44 281, , % 3.2% 3.3% 3.8% 2.4% 1.4%.7%.7% 1.1% 1.3% Rent Index % 5.5%.7% 3.5% -3.8% -5.% -3.1% 1.5% 2.5% 2.7% PPR/Dodge Pipeline Summary Bidding inal Pre- Deferred Abandoned Current Activity (S) 1, 2, 3, 4, 5, 6, 7, 8, 9, 1, Distribution Warehouse/lex Light Industrial Unclassified Warehouse by Subclass (S) % 3,171 9% 187 5% - % 184 5% 9, 8, 7, 6, 5, 4, 3, 2, 1, Change in Rent vs. Change in Rent 6% 4% 2% % -2% -4% -6% Sources: PPR; McGraw-Hill Construction - Dodge; National Real Estate Index 1Q22 PPR undamentals 22 by P R O P E R T Y P O R T O L I O R E S E A R C H, L L C. All Rights Reserved.

7 PPR undamentals Hotel Supply, Demand, and Occupancy Demand & Supply (Rooms) 6, 4, 2, -2, -4, -6, Occupancy Rate Percentage Occupied Hotel Market Statistics (Rooms) Occupancy 71.3% 69.8% 69.3% 7.3% 62.1% 6.2% 62.4% 64.9% 66.2% 67.3% 655 1,41 2,43 2,312-5,492-1,23 2,198 2,39 1,367 1, % 2.1% 4.7% 4.3% -9.8% -2.% 4.4% 4.6% 2.5% 2.9% 2,85 4,524 3,647 3,8 1, ,333 1, % 61.3% -19.4% -17.5% -63.2% -56.% 1.6% 61.7% 66.2% 19.1% 876 3,45 4,15 2,219 1, ,56 Inventory 7,783 73,828 77,843 8,62 81,786 82,656 83,311 83,735 84,233 85, % 4.3% 5.4% 2.9% 2.2% 1.1%.8%.5%.6% 1.3% Room Rate Index % 8.% 3.6% 3.9% -7.1% -6.1% -3.9% -1.2%.% 1.2% RevPar Index % 4.9% 2.% 2.7% -19.9% -5.9% 2.3% 1.4% 2.1% 2.6% PPR/Dodge Pipeline Summary Bidding inal Pre- Deferred Abandoned Current Activity Change in Room Rate vs. (Rooms) Change in Room Rate 5, 1% 4,5 8% 4, 6% 3,5 4% 3, 2% 2,5 2, % 1,5-2% 1, -4% 5-6% -8% 1, 2, 3, 4, 5, 6, Sources: PPR; McGraw-Hill Construction - Dodge; Smith Travel Research 1Q22 PPR undamentals 22 by P R O P E R T Y & P O R T O L I O R E S E A R C H, L L C. All Rights Reserved.

8 PPR undamentals Single amily Housing Single amily Multifamily 4, 35, 3, 25, 2, 15, 1, 5, Single amily Market Single amily 3, 25, 2, 15, 1, 5, Change in Home Price 16% 14% 12% 1% 8% 6% 4% 2% % Sources: PPR; Economy.com Single amily Market Statistics ,824 21,268 23,915 23,13 23,164 22,698 23,316 22,59 21,397 21, % 13.% 12.4% -3.8%.7% -2.% 2.7% -3.5% -4.9% 1.3% Completions 19,447 2,26 22,855 23,879 23,73 22,848 22,836 23,161 21,537 21,62 Apartment Market Statistics Multifamily 12,756 9,788 1,68 7,331 1,865 5,6 2,68 2,524 3,15 4, % -23.3% 8.4% -3.9% 48.2% -53.9% -46.5% -5.8% 23.% 4.1% Apartment Completions 2,551 3,9 2,56 2,73 2,886 3,27 2,16 1,543 1,699 2,237 Sources: PPR; McGraw-Hill Construction - Dodge 1Q22 PPR undamentals 22 by P R O P E R T Y P O R T O L I O R E S E A R C H, L L C. All Rights Reserved.

9 PPR UNDAMENTALS Projects PPR undamentals Apartment Projects Grand Plaza Title Address Units Stage Start Completion ( by Grand Ave., Ohio St., State St. and Dearborn St.; River North), River 764 1/ 6/2 AMLI at Seven Bridges 6466 Double Eagle Dr., Woodridge, DuPage County 52 7/1 12/2 Southwest Suburbs Park Millenium 2 N. Columbus Drive, River North 48 1/ 6/2 Highlands of Lombard Lombard 43 8/2 West Suburbs Cabrini Green Development N. Clybourn Avenue and N. Larabee Street, River North 4 Proposed armington Lakes Douglas Rd & Rte 34, Oswego 34 12/2 Kendall County 2 East Erie Street Corner of State and Erie, River North /3 Reserves at Evanston 193 Ridge Avenue, Evanston 195 Planned North suburbs 178 S. Indiana Ave. 17th and Indiana Streets, South Loop 192 Planned Bristol Station Apartments Naperville 1/1 6/3 DuPage County 1Q22 PPR undamentals 22 by P R O P E R T Y P O R T O L I O R E S E A R C H, L L C. All Rights Reserved.

10 PPR UNDAMENTALS Projects PPR undamentals Office Projects Title Address S () Stage Start Completion Dearborn Center 131 S. Dearborn St., Central Loop 1,4 5/ 1/3 Tenants: Bank One Corp, Holland and Knight LLP ABN AMRO Plaza - Phase 1 54 W. Madison St, West Loop 1,1 8/1 8/3 Tenants: ABN Amro North America Ltd 2 North Riverside Lake and Canal Street, West Loop 1,1 Planned Tenants: none -need preleasing 111 South Wacker Drive Southeast Corner of Wacker Drive and Monroe Street, West Loop 82 Proposed 12/4 191 North Wacker Drive Tenants: Gardner Carlton & Douglas SE corner of Lake St. and Wacker Drive, West Loop 74 9/ 11/2 55 West Adams Street 55 West Adams Street, West Loop 525 Planned 5/2 12/3 555 West Monroe 555 West Monroe St., West Loop 425 4/1 9/2 Tenants: Quaker Oats Pointe O'Hare - Phase II NW Corner of River Rd. and Higgins Rd., Rosemont 35 3/2 12/2 O'Hare Schaumberg Corporate Center phase III 1475 Woodfield Road, Schaumberg 31 4/1 6/2 Northwest Suburbs Highland Landmark Office Complex 35 Highland Parkway, Downer's Grove 25 Completed 11/ 1/2 East-West Corridor 1Q22 PPR undamentals 22 by P R O P E R T Y P O R T O L I O R E S E A R C H, L L C. All Rights Reserved.

11 PPR UNDAMENTALS PPR undamentals Retail Projects Projects Title Geneva Commons Lifestyle Center Address S () Stage Start Completion Randall Road, between Bricher Rd. and Williamsburg Ave., Geneva 425 6/1 12/2 Suburban Kane County Parkview Plaza 179th St & Wolf Rd, Orland Park 164 1/2 11/2 Southwest Cook County North Avenue Collection Tenants: Gap, Jcrew, BR, Vic Secret SE corner of North Ave. and Sheffield Ave. 13 Completed 4/1 4/2 City North Main Street Promenade Van Buren Ave btw Webster and Main Streets, Naperville 128 Planned 6/2 12/3 East-West Corridor McHenry Towne Center West Side of Hwy. 31, McHenry County 116 Completed 1/1 5/2 ar Northwest Suburbs Gateway Center SW corner of Smith St & Colfax St., Palatine 11 12/1 12/2 City North Grand Plaza ( by Grand Ave., Ohio St., State St. and Dearborn St.; River North) 1 Completed 1/1 2/2 City North Home Depot 2665 N. Halstead Street, Lincoln Park 91 12/2 Rehab of Woolworth Building corner of State and Washington, West Loop 85 Planned 12/2 Yorkville Marketplace East side of Rte 47 south of Rte 34 at Landmark Dr, Yorkville 79 Completed 6/1 4/2 Kendall County 1Q22 PPR undamentals 22 by P R O P E R T Y P O R T O L I O R E S E A R C H, L L C. All Rights Reserved.

12 PPR UNDAMENTALS Projects PPR undamentals Warehouse Projects Title Address S () Stage Start Completion Kellog's build-to-suit 6225 E Minooka Rd, Minooka 1,34 11/1 11/2 ar Southwest Suburbs Tenants: Kellogs USAA Real Estate Warehouse and Distribution acility East of Orchard Rd, Aurora 85 Planned 3/3 East-West Corridor Pampered Chef HQ and Distribution facility Tenants: Pampered Chef Swift Road and Army Trail Road, Addison 6 7/1 7/2 DuPage County CenterPoint Business Center 55th and East Avenues 445 Completed 3/1 12/1 Cook County Pinnancle Business Center Phase II 112 Taylor Road, Romeoville 442 Completed 9/1 ar Southwest Suburbs Tenants: Bluff Point Building 1 Bluff & Joliet Rds, Romeoville 4 Deferred 12/1 ar Southwest Suburbs Industrial Park Intersection of Interstates 8 & 55, Minooka 4 Planned ar Southwest Suburbs Aurora Corporate Center 999 E Bilter Rd, Aurora 4 Completed 3/1 11/1 East-West Corridor Pinnacle Business Center - Phase 3 Taylor Road, Romeoville 4 11/1 7/2 ar Southwest Suburbs West Ridge Corporate Center NW Corner of I-88 and arnsworth, Aurora 325 Completed 9/1 2/2 East-West Corridor 1Q22 PPR undamentals 22 by P R O P E R T Y P O R T O L I O R E S E A R C H, L L C. All Rights Reserved.

13 PPR UNDAMENTALS Projects PPR undamentals Hotel Projects Title Address Rooms Stage Start Completion Omni Rosemont Hotel Rosemont 45 Deferred O'Hare Hotel Sofitel Chicago 19 East Chestnut Street, Near North/Streeterville 415 1/ 6/2 Hotel Intercontinental River Rd. near oster Ave., Rosemont 41 Proposed O'Hare Hilton All-Suites Hotel - Grand Pier Center - Phase 3 Columbus Drive between Grand and Illinois Aves., Near North/Streeterville 41 Deferred Magnificent Mile Courtyard By Marriott 155 E Ontario St, Near North/Streeterville 258 3/2 Hilton Gardens Hotel/Restaurant/Swimming Pool 293 S River Rd, Des Plaines 172 Proposed O'Hare Extended Stay America 2 N Roselle Rd, Schaumberg 128 Completed 7/1 2/2 Northwest Submarket Doral Resort & Spa 141 Nordic Rd, Itasca 74 4/1 9/2 O'Hare Adam's Mark Illinois Street, Near North Deferred Courtyard by Marriott/Swimming Pool 295 Knollwood Drive, Bloomingdale 5/1 5/2 Northern DuPage County 1Q22 PPR undamentals 22 by P R O P E R T Y P O R T O L I O R E S E A R C H, L L C. All Rights Reserved.