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Crain's analysis of 18 prominent office properties in and around downtown that were sold during that span found they traded for a combined $712 million, which is a staggering 72% — or more than $1.8 billion — less than they were collectively worth when they changed hands in the years before COVID. "The Johnson administration must do everything it can to remove roadblocks that these investors might encounter as they consider what to do next."
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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The Johnson administration will do diddly squat to improve the investment environment for businesses. All his actions so far have shown a heavy dose of outright incompetence .
Dead money for many years to come.
What these real estate investors miss is the fact that Mayor Johnson is driving Chicago into the ground like a tent peg!
“… wagering brighter days are ahead (for downtown Chicago).” What are these investors basing this optimism on?
Because they have money they think they’re smart.
All they had to do was ask people walking on the sidewalks outside the buildings if they should buy it. THOSE are the smart people.
These real estate investors are delusional. Chicago’s downtown downturn is NOT a cyclical event with an upside to come. If they think they got great deals on these discounted buildings and were buying at the bottom of the market, then they’ve got more money than sense. Suburbanites don’t want to travel into downtown for work or for pleasure. That’s an awfully large number of people who are no longer going to populate those cheap office buildings. Further, that’s a huge chunk of suburban money that’s going to stay in the suburbs and not get spent in the city. Downtown cannot… Read more »
a couple of brief comments: ~Investors invest. That’s their job. If they’re not investing – even in bad deals – then they have no reason to get up and go to work that day. Bad investments happen all the time. ~The Root of Chicago’s downtown problem isn’t crime. The Root of Chicago’s problem is that it’s a PITA to get there and back. It’s an antiquated notion to have a central business district in metropolitan area of 9,000,000 people who are expected to commute from sprawl 50 miles in all directions into a several sq. mile area every M-F between… Read more »
Some credit goes to suburbs who’ve offered entertainment alternatives to the city. You don’t need to go downtown to enjoy a night out anymore. Throw in the city isn’t that clean and every breath you take walking around has a high probability of including someone else’s exhale of marijuana. Chicago is now just a place to just go work. The days of grabbing dinner and a drink with friends before taking in a show after work are pretty much over.
All great points. My thoughts: – these are not good investors unless they’ve got money to burn. There’s much better places to invest in this country with way less risk. The structural changes to the nature of the American office, well documented by companies either downsizing or closing their offices, seems to make these office building purchases quite the folly. – having worked downtown my whole life career, mostly around the CBOT, Chicago’s train system regional coverage is some of the best in the country. As bad as our commutes were, New Yorkers would have killed for our commute times,… Read more »
“New Yorkers would have killed for our commute times” This is true, and our train systems are good. However, in retrospect, it was still a nightmare – especially with a family – to make the train, with all the running around, and the rushing home to go the school followed by evening activities, etc. Too much, not sure how anyone pulled that off. That was just how things were for a long time. I occasionally speak with work from home people who want to go downtown one or two days a week, at their leisure, but don’t want to go… Read more »
Agreed, I had a great commute, and it still wears you down.
Especially in the winter. Go to work in the dark, come home in the dark.
It is heartbreaking to read this about our once spectacular downtown area. We all used to dream about making money in real estate in Chicago– the big guys and the little guys. But with the current environment, I’m not sure even buying property at 25 or 30 cents on the dollar is a good investment. What’s the upside with our wacky governor, socialist mayor, and a business climate that ranks in the bottom five in the entire US?
Until some rational governance appears , there is no upside.