Monthly Archives: January 2016

View of the Chicago River, the Loop and the Sears Tower from Roosevelt Street.

In recent news in Chicago an affiliate of Hackman Capital Partners, LLC, a company based out of Los Angeles who specializes in real estate investing purchased a new portfolio filled with industrial buildings through the metropolitan Chicago area. They purchased up to six different buildings. Five of these building are at about 90% occupied. The newest acquisitions will increase Hackman Capital’s presence in the Midwest and represent about seven million square feet of a total of 25 million square feet they already own. The newest purchase puts the amount of square feet at around 906,984 worth of real estate.

The company is planning on leasing the vacancy they currently have in the new buildings they have just purchased. This is just one of the many deals that has happened from the 2015 to 2016 Chicago industrial realm.

2015 and Beyond

Professionals around the area are wondering if the New Year will be as prosperous as the years before hand. The performance of 2015 was unprecedented and a lot of land and real estate was being exchanged throughout the industrial scene.

2016 will not be living up to the year that 2015 has with the same amount of volume and trading going on. Some analysts predict that land constraints off of I-55 will drive development over to I-80 and I-88. Also rental growth will be more closely related to how the economy is doing rather than the amount of supply in regards to industrial buildings.

Investing activity will continue to grow and be strong for stable industrial assets around the area. On the other hand there are some analysts who believe that 2016 will be good for a year of trading industrial assets. Neal Driscoll a manager and vice president at Liberty Property Trust believes that 2016 could be a great year as long as there are not any major financial issues or economic problems on a mass level. He believes that 2016 will have a similar year to 2015. There is going to be a lot of activity with buildings ranging from 100,000 to 200,000 square feet. There will also be developments on industrial land because there is a lack of it.

Because of all of this it will drive up the demand even great in the Chicagoland area. Other than these redevelopments the decrease in demand may come from developers heading to other markets and that is what the main fear is. For example one of the analysts think that with the economic uncertainty of Illinois others may be driven to seek out other marketplaces for industrial growth.

These areas would include places like the neighboring states of Wisconsin and Indiana. Even so with increased internal investments this may be able to mitigate any potential losses that might be faced by the industrial real estate market in the Chicago area. 2016 has two different paths it could take, either continuing the trend of 2015 or falling off and not having that big of a year.

Kendall College on Goose Island in Chicago, Near North Side. Repurposed Edwardian factory building on the Chicago River. No people.

Goose Island in the middle of the city of Chicago has a rich and varied history. Originally the artificial island was dubbed “Little Hell”, it was littered with shantytowns and was quite a poor place to live and work. Over the years companies began to take root on the island and take over it and it has become what it is today, somewhat of a run down industrial park in the middle of some prime real estate in the middle of the city.

Goose Island has become more of a fixture in the news as of late as there have been some propositions and plans for the advancement of the island to become a center of progress for tech innovation and industry in the middle of Chicago. Proponents of the new development have dubbed the new iteration of the island Goose Island 2.0 as it goes forward to future development for the future.

Future Plans

Recently property developer Zack Cupkovic has been involved with developing some plans for the island. He works for R2 Companies, a company that has been instrumental on putting its vision forward for the island. They have proposed a new plan all the way up to 2025 outlining their future vision, which includes a new group of buildings and workplaces for the island as well as a new transportation infrastructure

The new transportation would opt for pedestrian walking and biking in order to get to and from the island without the need to drive. Goose Island is at an ideal location in the city as it is close to the L lines and right next to the heart of the downtown area. It has yet to reach its full potential and become an industry leader in the area.

In 2009 there was the Cherry Street pedestrian and bike bridge that was opened up on the north side of Goose Island which made it easier to walk from the North and Clybourn station. The company would like to take this a step forward and build two new bridges without any cars. R2 hired an Urban planning firm called PORT Urbanism to draft a plan for new bike paths.

The company believes that there will be thousands of workers the island will be able to support and it will need the underlying transportation network to make this possible. The plan that they put in place proposes two different paths. The first path would be located at the original site of the bridge where Ogden Avenue once crossed into the island that was removed in 1993, this would help it connect to the Chicago Blue Line stop area.

The area is rife with industrial buildings that could support far more than they do at the current moment as well as future for more companies to rebuild and create better areas for companies to flourish. The building of these two pedestrian paths would prove to be a necessary step to get this to be feasible and help build onto the long term aspects of this project at Goose Island.  

flooding

Some people claimed that this winter would be a mild one and they weren't kidding. December has been a warm month, leading to tornados in Texas and excessive rain in Louisiana, Missouri and Southern Illinois, among other locations. There have been more than 20 people killed in the floodwaters across these regions, and floods are only expected to get worse in the month of January. Now, states in the South are bracing themselves for overflow coming from the Mississippi River, Arkansas River, the Red River, the Ohio River, and the Missouri River.

 

Damage due to flooding

Flood water has become so high on the Mississippi River that the state of Missouri was forced to close interstate highways. Certain areas have seen more than 10 inches above normal flowing of the rivers, as opposed to the normal snow and ice for the month of December. Flood waters were so bad that the National Guard was asked to step in to help out. Flooding has become so excessive on the lower part of the Mississippi River, that it might force the opening of Bonnet Carre Spillway, located in New Orleans, Louisiana.

 

Comparisons to the 2011 flooding

Flooding occurred in 2011, but Jeff Graschel, who works as a hydrologist at the forecast center, stated that although unusual, this flood's magnitude is a bit less than 2011. In 2011, flood waters caused overflowing rivers to completely consume cities, slowed barge traffic, and threatened local refinery and chemical plant operations. It is interesting to note that the 2011 floods occurred in the month of May, when we are more likely to see flooding.

 

Current flooding situation

Into the new year, the Missouri River is at a major flood stage and still pouring into the Mississippi. This water will join with that already in the Ohio River and flow toward densely packed industrial river fronts throughout the southern part of the country. Records for this year have already exceeded those from previous years. This flooding has caused an increase in costs for barge delivery. It is estimated that about 60 percent of United States grain exports entering the Gulf of Mexico through New Orleans are delivered through barges on the Mississippi. With the way the forecast looks, New Orleans is not expected to be hit with any flooding until roughly the third week of January. This can have a major effect on many companies with refineries, factories, or shipping sites along the river. Some of these include the Dow Chemical Co., Archer-Daniels Co., and Valero Energy Corp.

 

The country has been hit with some interesting winter weather and there are still plenty of months ahead. This year's strong El Niño might be to blame for the different weather experienced throughout the country. Meteorologists need to remain mindful and the National Weather Service will continue to keep everyone updated on any flood watches or warnings. What do you think about the winter weather in your area? Has is truly been a mild winter and is it likely to continue? Or do you think the nation is in for some freezing temperatures?