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Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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Tif, Edge and other assorted subsidies must have run out.
Considering Illinois “offers” one of the highest combined local and state tax rates — and the second-highest property taxes — in the country, it’s unsurprising high earners are eager to set up shop elsewhere.
It’s a plot by Google to reduce headcount without having layoffs. You don’t want to work here? Fine, thanks for your contribution. The city is dead, murdered by Lori and her ilk.
Google thinks they can fill the Old Thompson Center with new employees — in reality they have bought a $100M white elephant
Chicago is nearing it’s ‘Detroit moment’ Enjoy – this is what the majority in Chicago wanted.
Certainly with the the taxpayers dollars these building could be repositioned as homes for the newly arrived immigrants looking for sanctuary. Thinking ahead even voting machines could be installed saving the prescient captains gasoline bills transporting these individuals to the polls on election days. What a blessing in disguise for the Chicago political class.
ThevMsg Mile, BudinesscDistrict and Entertsinment District are dead. Nobody voluntarily wants to,play Russian Roulette. The results of Herself’s malicious negligence. Lori Lightfoot.
Not negligence. EQUITY.
Unload To whom?
Businesses are leaving, fleeing for their economic lives.
Maybe the CTU will rent out all the extra space.
Anyone in their right mind is Fleeing the Chitty of Chicago. It is DOA, high taxes, higher crime and lowest education level. Ken Griffen is just one of many that have left and many more to come. Illinois has done its best to discourage the private sector and done everything to overpay the Lazy Private sector. Good luck with that program.
Yesterday I showed that home prices were dropping hard and fast in Chicago neighborhoods straddling the traditional (and loosely defined) western ave boundary between gentrified and ungentrified neighborhoods. Time on the market has doubled, prices are down in some areas 25% YOY, or at least off last year’s peak, and median days on market has skyrocket to the moon! Downtown is in full meltdown mode right now and it’s spreading into the neighborhoods where downtown workers live now too.
There’s 7.8 million square feet of vacant office space in downtown Chicago? No biggie, it’ll get absorbed rather quickly, as Chicago is vibrant, resilient and will bounce back any minute now…it’s not like this downtown collapse will last more than a generation…or two…
Wait a minute….Pensions Paid First said Chicago and IL are “in-demand” and everything is great . This article must be fake news…. it can’t be so. Demand for office space in Chicago is hot says PPF
Meanwhile take a look at Office Space in metro Miami area….cant build more fast enough. Go Figure
“Demand for office space in Chicago is hot says PPF”
Please provide evidence of me ever writing that. Don’t spend too much time looking for that because it never happened. Just another commenter that makes up stuff to boost themselves on an anonymous board. What a sad pathetic individual.
I earlier mentioned a conversation I had with an established institutional investor with a 30 year track record, and a particular focus on REITs. He knows how to make sense of their often opaque balance sheets. He has not owned a single commercial real estate REIT for 2 years. I asked him if the post COVID hangover is responsible. He said to a degree, but the real problem in urban centers like the Loop is rising crime. No matter the efficiencies, or perceived efficiencies, employer leverage dissipates when employees express doubts about their safety. And crime on public transportation just… Read more »
Willowglen, First, I have answered your question in the past, I’m just not going to repeat it every time you ask it and didn’t bother to go back to the older post. I don’t disagree with you about taxes and their impact on economic activity but that doesn’t change the fact that money is owed. Unless people are willing to cut elsewhere or the state will allow bankruptcy for Chicago, it doesn’t matter. Raising taxes and/or cutting spending is at least dealing from the top of the deck. Second, I completely agree with you regarding the real issue with Chicago… Read more »
I recall several months ago PPF having strong opinions on Chicago real estate. I said that the housing market was in a major bubble 2.0. I said the bubble was just about to pop here because prices have just started to decline elsewhere. Then he tried to pin me down as to when it will pop in Chicago. I said ‘soon, little grasshopper, have patience’ and he got upset and said that real estate prices weren’t going to fall. Then I showed some data showing that were minor declines in Chicago which was the start of the housing bubble deflation… Read more »
I discussed the residential real estate market not the commercial market. At the beginning of 2022 you stated the residential real estate market would collapse by 20%. At the beginning of this year I pointed out the case-shiller index showed Chicago real estate was up over 7% through November. You stated that was old data and it was collapsing as we speak. Also, said that a year earlier. So you need that market to collapse close to 30% in the next 12-18 months to be right. My main point for discussing this market was because it didn’t line up with… Read more »
We’re in a global housing correction, @GoldmanSachs
says, and the U.S. housing market is holding up the best.
New Zealand -16.2%
Canada -15.8%
Sweden -13.1$
Australia -9.1%
Germany -4.1%
U.K -2.9%
U.S. -2.7%
https://twitter.com/NewsLambert/status/1639366649059893248
US printed more money and for longer than every other country. We’ve just started this meltdown. It’s happening. Bubble 2.0 is finally happening. Grab your popcorn and hold on tight. With Frick and Frack in charge (Yellen and Powell) what possibly could go wrong!
…..and Chicago???? We are talking about Chicago. Stop trying to move the goal posts. Stick to the subject. I made the point that I never, that’s right NEVER discussed the commercial real estate market strength. You then chimed in that you recalled that I did and tried to recreate the conversation. You asked if I agreed. I then corrected where you were mistaken. Now you’re back to our old conversation. On top of that, now you’re posting about the “global” market instead of Chicago. If you stay on topic then you’ll admit that I was never discussing the commercial real… Read more »
Patience little grasshopper…
PPF and Debtsor – I do note that you are both in agreement on the dim prospects of commercial real estate in Chicago. It is also a national problem, although certain factors – i.e., high property taxes, a dismal regulatory environment, and crime exacerbate the Chicago situation. As to residential, I read anecdotes such as the sharp rise in taxes in places like Pilsen. That neighborhood strikes me as an immigrant success story so I it disheartening to see the tax monster eat the fortunes of these hard working people. I don’t see any other view other than to be… Read more »
Willowglen, yes, you do have enough real estate knowledge to say how dumb it is to think the solution to downtown’s empty offices is conversion to residential. It’s plain to see. I’ve been talking to real estate pros, too, who shake their heads at it. I will write about it at some point. This is a massive problem with no good answer, for Chicago and many cities.
And the crash begins…down 1/2% MOM, down -3.85% from the peak, and while still up 4.83% YOY, it’s only a matter of months before Chicago and every city on that list turnovers…Look out below, it’s not going to be pretty.
Did this guy have anything else to say about CRE besides crime being the office building killer? It’s been three years now, commercial buildings are going into special servicing right and left as the sub-leasing market goes bonkers. The CMBS market is close to $4 Trillion Dollars and there’s been nary a peep from Mr. Stock Market which continues to defy expectations. The real CRE reckoning is coming soon, no one in the main stream has really yet even tried to comprehend how bad things are going to be, which I personally believe will cause major disruptions in the market.… Read more »
Debtsor – this guy is an Econ Phd with a 30 year track record of high success. So he won’t even look at a REIT unless it is very well managed and has transparent accounting. If in doubt, he has a forensic accounting guy working for him. The bar is really high to begin with. So for the few that make it through his filters, he then looks at fundamentals and math/value proposition. Being overly leveraged right now is deadly. He doesn’t disagree with the points you make but the quiet narrative among investors in the know – and who… Read more »
LOL you calling anyone pathetic is Rich with capital R
Later dude
So you were called out about your lie and now you’re saying later? Ha ha ha. Makes sense. Don’t like to stick around when someone calls out your sad pathetic lying behavior. Later sad pathetic dude.
Isn’t Salesforce consolidating its Chicago offices into their soon-to-be tower on Wolf Point?
Yes, and the articles says they are shedding 5 floors about 25% of its space in the building, and the building hasn’t even been completed yet. not good.
There are 60+ floors, so 5 floors is nothing and renting the space out has been a common theme downtown for decades (prime space, that is, not denying all the rest of the vacant spaces). This isn’t really anything new.
It is new for so many companies, all at the same time, to be shedding space. 20% of the loop is vacant and all trends point to higher. I haven’t been into a downtown office in three years. I don’t plan on going into a downtown office ever again.