Gail Lissner - 2017 Market Outlook

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SPEAKERGAIL LISSNER, CRE, SRAVice President of Appraisal Research Counselors

www.AppraisalResearch.com

ARCAppraisal Research Counselors

Gail Lissner, CRE, SRA

312 565 3423

[email protected]

Appraisal Research Counselors

400 East Randolph, Suite 715

Chicago, IL 60601

Downtown Chicago Market Update...



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Chicago National

Chicago Homeownership Trends…

Chicago MSA 3Q16 – 65.1%

HUD changes agency targets for affordable



Downtown New Unit Deliveries…



DT Rental Vs. Condo Deliveries….

100% 100% 100%

39%

0%

49%

13%

0%

21% 24%

0%

22% 24%

10%

23% 23%

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32%28%

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100% 100%94% 96% 93%

97% 94%

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2017proj

Rental Unit Deliveries - % of Total Deliveries1990-2017 proj.

(c) 2016 Appraisal Research Counselors, AllRights Reserved

2011-2017: Rental units has comprised 93-100% of the total deliveries!



Neighborhood Apt Development…

11,500+ Units Proposed/Under Construction



Milwaukee Ave. Corridor – Prop/UC…$3.00 PSF: developers’ target



The Downtown Rental Pipeline…Green = In Lease Up

Red = Under Construction



DT Condo/TH New Development Net Contracts…



DT Condo Unsold Developer Inventory…

0

1,000

2,000

3,000

4,000

5,000

6,000

(c) 2016 Appraisal Research Counselors, All Rights Reserved

Gold CoastLoopNear NorthRiver NorthStreetervilleSouth LoopWest Loop



DT Condo/TH Unsold Developer Inventory…




76% over $700+ PSF




19%

6%

26%

44%

5%Units in the WestLoopUnits in the SouthLoopUnits in River North

Units in the Loop

Units in the GoldCoast



96 DT Buildings 17,000 Units Price Changes…

© 2016 Appraisal Research Counselors, All Rights Reserved$200

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3/42012

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1/22016

Sales Price PSF Trends in Buildings Developed Since 2004

(c) 2016 Appraisal Research Counselors, All Rights Reserved

Gold Coast

Loop

Near North

River North

Streeterville

South Loop

West Loop



2004+ Deliveries – Sales PSF Since 2007…



Downtown Condo Price Trends…



Condo De-conversions…

835 W. Barry115 condo unitsAvg 895 SFBeing mkted by CBRE

2625 N. Clark133 condo unitsSold for conversion to rental

2518-40 N. Lincoln30 res. condo units/New rental building under construction with 200 apts



Rental development slowing due to Short term imbalance in supply and demand Rising interest rates Construction costs escalating Rent growth slowing – renewals Real estate taxes increasing Land sellers in denial ARO adding cost to development

Modest increase in condo development Greater diversity in product type Gradually increasing project sizes Continued development in neighborhoods

2017 Trends…

Gail Lissner - 2017 Market Outlook

Real Estate

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