2018 car market outlook amy de vallet
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Prospects for Chicago’s Real Estate MarketChicago Association of REALTORSJanuary 11, 2018
Presented by Amy de ValletSenior Director
Tribune Real Estate Holdings, LLC.
• Tribune Real Estate Holdings was formed in
2013 after emergence from bankruptcy
• New Tribune Company management saw
opportunity to maximize value of real estate
assets to create shareholder value
• Since formation, we have sold over $700mm in
real estate assets and anticipate as much as
another $400mm in the coming years
TRIBUNE REAL ESTATE HOLDINGSMAXIMIZING LEGACY REAL ESTATE IN A DIGITAL ECONOMY
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• Owned 76 properties in 23
states upon formation of
the holding company
• 8M SF on 1,200 acres
• Mix of urban office and
industrial, and large
suburban/rural parcels
• Large presence in Chicago,
Los Angeles, New York
OUR LEGACY FOOTPRINT
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OUR APPROACH
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Our experience as a holder, leaser and
renter of property advises our real
estate approach
A private equity approach to real estate
holdings:
• Define & execute optimal strategies for each
asset
• Perfect entitlements and enhance/improve
zoning
• Enter JV agreements with local operators and
monetize when appropriate
GROWTH AND DEMAND IN
CHICAGO’S URBAN CENTER
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• Chicago’s Downtown Central Business District is growing
• City of Chicago is modernizing policies to encourage growth
• Educated millennials overwhelmingly settle downtown, prefer CBD to suburbs at a 15:1 ratio
• They demand live/work/play environments that emphasize connectivity (digital & physical)
• Urban centers are replacing suburban campuses – and businesses are relocating to Chicago
URBAN OPPORTUNITY: SUBURBAN FLIGHT
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• They’re looking for talent, unique and creative space and to use their presence in an urban setting to further define their brand
URBAN OPPORTUNITY: CORPORATE TRENDS
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So what does this mean for land owners and developers – especially in a large
gateway market like Chicago?
WE’RE BULLISH…
BUT THERE ARE CHALLENGES
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• Old buildings with aging infrastructure
• Significant transportation infrastructure needs
• Absence of regional planning with widespread, cross-jurisdiction political support and cooperation
• Potential for excess inventory
L I N C O L N YA R D S
28 acres
O L D P O S T O F F I C E
2.5M sq. ft.
M I C H A E L R E E S E
49 acres
G O O S E I S L A N D / M O R TO N S A LT
4.25 acres
T H E R I V E R D I S T R I C T
37 acres
R I V E R L I N E
14 acres
T H E 7 8
62 acres
U N I O N S TAT I O N
14 acres
CAN IT ALL BE ABSORBED?
Why are we still bullish?
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Because geography and demographics still matter
THE RIVER DISTRICT37 CONTIGUOUS ACRES BOUNDED BY CHICAGO RIVER, HALSTED, AND GRAND AVENUE
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URBAN CONTEXTNEXUS OF CHICAGO’S MOST DESIRABLE RESIDENTIAL NEIGHBORHOODS
LOGAN SQUARE
BUCKTOWN
HUMBOLDT PARK
2 Mile Radius
STREETERVILLE
29,507
79.1%
1 Mile Radius
RIVER NORTH
16,022
82.7%
THE LOOP
15,812
80.4%
WEST LOOP
FULTON MARKET
55,161
68.1%
WEST TOWN
RIVER WEST
35,077
43.4%
TRI-TAYLOR
7,141
62.6%
WICKER PARK
26,164
78%
GOLD COAST
OLD TOWN
40,133
72.3%
LINCOLN PARK
66,085
82.2%
LAKEVIEW
70,984
83.3%
SOUTH LOOP
PRINTER’S ROW
30,505
78.0%
UNIVERSITY VILLAGE
34,017
43.4%
UKRAINIAN
VILLAGE
11,450
59%
POPULATION ESTIMATEEAST PILSEN
51,527
44.6%
BUCKTOWN
LOGAN SQUARE
85,319
67%
COLLEGE DEGREE
15-30 minute commute (or less) to all of Chicago’s most desirable neighborhoods for millennial talent
250,000 residents (146,000 households) within 2 miles of site
953,000 residents (442,000 households) within 5 miles of site
TRANSPORTATION CONNECTIVITY
CENTRAL LOCATIONTRANSIT CONNECTIVITY
CONVENIENT ACCESS TO MAJOR BUS, TRAIN, BIKE, AND COMMUTER HUBS
• 50% of site within ¼ mile of CTA Blue Line
• CTA Blue goes direct to ORD
• Within ½ mile of 5 CTA train stations (Blue, Brown/Purple, Green)
• Bounded by 3 major bus lines (Halsted, Chicago, and Grand)
• Halsted and Milwaukee are major bike ‘spoke routes’
• 1 mile to Ogilvie / Union Station commuter train system
• There’s good reason to be bullish on Chicago and other gateway cities
• Geography and demographics still matter
• Watch out for oversaturation and challenges for absorption
KEY TAKEAWAYS
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