January 2010 Global Economic Outlook web conference available OnDemand!

January 25, 2010

Now that we have found “the bottom,” what’s next?

NAI Global’s Chief Economist Dr. Peter Linneman previews a slow economic recovery in 2010, with jobs on the decline through the first quarter and the housing sector in an upturn, with an in-depth review of what happened in 2009 and where we can go from here. Listen to the January 2010 Global Economic Outlook web conference OnDemand.

Posted by NAI Hiffman | Filed Under Adam Marshall, General Business, Investment, NAI Global

Shipping firm buys Northlake site

January 25, 2010

northlakesitejpeg A Melrose Park shipping company paid about $3.1 million for a site in west suburban Northlake where it plans to build a 100,000-square-foot facility that would include its offices. Go To Logistics closed Jan. 15 on the 13-acre site at 165 W. Lake St., where it intends to tear down the existing 231,000-square-foot building. The company, which currently leases about 35,000 square feet at 2001 Cornell Ave. in Melrose Park, plans to start work this spring with a goal of moving to the new building in the fourth quarter, says Brian Carroll, a senior vice-president with Grubb & Ellis Co. who represented Go To Logistics. Larry Goldwasser, Larry Much and Jay Maher of NAI Hiffman represented the sellers, private individuals including two owners of Olmarc Packaging Co., a food packaging firm now out of business that was headquartered at the site.

Source: Chicago Real Estate Daily

Posted by NAI Hiffman | Filed Under General Business, Industrial, Media Coverage

Decade in Review: The Industrial Market

January 22, 2010

John Cash, SIOR
Executive Vice President / Managing Director
NAI Hiffman

As we begin a new decade and as 2009 recedes into the rearview mirror, we find ourselves at an opportune moment to look back on a remarkable and turbulent decade in industrial real estate. A fitting quote to describe the first 10 years of the new century is Charles Dickens’ famous, “It was the best of times, it was the worst of times”.

In January 2000, investors were riding on the edge of the dot-com bubble with buoyant exuberance. The NASDAQ stock index broke 5000 in March 2000 just before the market began a precipitous plunge. The following year, with a recession looming, the nation was struck with the terrible tragedy of 9-11 which led to two costly and enduring wars.

The resilient American economy rebounded by mid-decade despite a declining manufacturing sector. Unfortunately, a new speculative bubble soon formed in the financial and real estate sector fueled by low interest rates, high leverage and plentiful equity. Again, the bubble burst, this time beginning in the housing sector and spreading throughout the commercial markets.

This era of financial chicanery, beginning not long after the repeal of the Glass-Steagall Act in 1999, introduced us to new jargon including: subprime loans, credit default swaps, derivatives and collateralized debt obligations. As the U.S. plunged into recession in 2008, additional terminology entered the lexicon including: credit crunch, financial meltdown, bailout, and TARP funds. In 2009, unemployment jumped to 10 percent. The entire underpinning of the economy was in doubt. Yet by the end of 2009, signs of a nascent recovery became evident with a positive turn in GDP growth, increased industrial production, rising home sales and an improving stock market. What a ride it has been. Read more

Posted by NAI Hiffman | Filed Under Industrial

Chicago’s East-West Corridor Offers Opportunities for Tenants in 2010

January 15, 2010

By Jim Adler and Garrett Schultz, NAI Hiffman

If you’re like most companies, you are glad 2009 is over. Nearly all sectors of business felt the burdens of this recession including law firms, accounting, IT & consulting firms, medical practices & related services, the list goes on. For many companies, 2009 was simply the year to hunker down and make tough choices, be fiscally conservative and “get the house in order”. As unemployment in Chicago topped 11% this year, it comes as no surprise that the overall vacancy rate for suburban office properties climbed to an astounding 22.5%. In the East-West Corridor, vacancy has climbed to a similarly dismal rate of 21.95% – matching the high-water mark of the past 10 years set back in 2003. The cold realities many landlords faced in 2009 included anemic prospect lists, tenants not expanding or even renewing their leases, and others asking for rent relief. News of large leases or new tenants in the marketplace was virtually nonexistent. And news of landlords losing their office assets or “giving back the keys” to their lenders became commonplace. Suffice it to say they, too, are glad 2009 is over.

The Year Ahead

So what’s in store for the office market in 2010? For landlords, no doubt most will continue to compete fiercely for new tenants and retain existing ones at returns far less than what they or their investors originally hoped to achieve. Significant tenant improvement allowances will likely not be offered, as the availability of capital is limited more so than it was during the last recovery cycle. Rent abatement and low rent structures, however, will remain prevalent as landlords compete to attract tenants. Most landlords will continue to be far more concerned about maintaining occupancy than achieving high rates. And for many owners of office buildings, 2010 will continue to be about survival. Read more

Posted by NAI Hiffman | Filed Under Office