Monthly Archives: February 2016

If you live in Chicago, then you have probably heard of title loans. After all, they are advertised all over the television on a regular basis. Just in case you’re not “in the know,” however, these loans are special loans that allow users to get cash instantly by putting their car or motorcycle titles up as collateral. For people who use their loans wisely and who pay back their loans as agreed upon, title loans are a great option. Unfortunately, though, many people are not smart with their loans and wind up in serious debt because of them, which is becoming a very widespread problem in the Chicago area.

The important thing to understand about title loans is that they are considered “high interest loans.” In other words, the interest that one can expect to pay on them is very high when compared to the average bank loan. However, the reason for the high interest rates is because most lenders who opt for this type of loan have poor credit and/or loan repayment histories. Thus, the lenders who loan to them are really taking a chance and going out on a limb for these borrowers, so they have to charge higher interest rates to make up for the risk involved.

The problem with this high-interest type of financing is that, when a borrower misses one payment, the interest compounds, meaning that if a borrower falls behind by just a little and doesn’t then get things in check, he will fall further and further behind until it’s impossible to find a way to get out of debt. Sadly, this is something that has happened and continues to happen to many Chicagoans on a regular basis.

While many are quick to blame the lenders and to label them as “predatory,” the truth of the matter is that the responsibility really falls on the borrowers. These lenders are very upfront about their higher interest rates, and, for the most part, urge lenders not to borrow from them unless they can truly afford their payments and meet all terms of the repayment agreement. Many lenders even work out specific repayment plans tailored to the borrower’s needs and budgets, but sadly, a lot of borrowers are not honest during this part of the process, fearing that they will not be given loans if they are honest about the state of their finances.

The bottom line is that, when borrowers get in debt, it really is their fault, and the lenders should not be blamed. To avoid going into debt, potential borrowers are encouraged to thoroughly research any lending company before agreeing to a loan with it. They are also encouraged to be open and honest when negotiating the terms of their loans and to compare interest rates from different lenders to find the best possible loan deal.

While so many are quick to blame lenders for the big debt problem among Chicagoans, the responsibility really remains with the borrowers, and while that may be a hard pill to swallow, it’s an honest one.



As industrial real estate leasing has been steadily increasing in the past two quarters, it is still at it’s lowest ever since back in 2001. As the vacancy rate went down for most of the final quarter of the year, it went up at the end, leaving 2015 with a weak finish. However, this isn’t terrible news, because those industrial landlords still left 2015 with reason to be happy with how the year went:


  •         Seattle-based Colliers International shows that industrial vacancy in the Chicago area rose to 7.32 percent in the quarter, up from just 7.26 percent in the previous period, and down from 7.73 percent in 2014. Industrial vacancy also slightly increased in the third quarter after a low of 14 years of 7.23 percent in mid-2015. However, it is well below the peak of 12.24 percent in 2010 after the crash.
  •         Warehouse space is in demand as the economy has expanded, yet it is hard to know how outside forces like China’s economy, low oil prices, and drops in stock prices will affect Chicago. It is easy to be happy about the fact that real estate is in demand for companies or other tenants, however, it is possible that those people will become cautious as it is clear that financial crises create a chain that affects real estate vacancies months down the road.
  •         Net absorption was at its worst from 2008 to 2010. This is the amount of space that is occupied as opposed to the amount not occupied.  As builders created more space, the absorption rate grew slightly. The supply should still be available for the demand as buildings are still be constructed, leaving those that need warehouses and other buildings, an opportunity to thrive in those buildings.
  •         Builders don’t believe they have overbuilt. They believe the supply is there for the demand and that the rate of vacancy will go down with time. Industrial buildings seem to be the highest priority, and that is what is being built, to help supply that specific demand. For example, a major logistics company based in Minnesota leased a 235 thousand square foot warehouse in the suburb of Des Plaines which will be used as a major hub for freight consolidation.


The future is looking bright as long as industrial landlords can continue to build modern buildings and the demand is still there for those buildings. As 2015 ended, the vacancy rate was at 7.3% for industrial real estate. However, it is not as disheartening that it is about half of what the vacancy was around the time of the crash that affected the whole world. It is a little disheartening though that so many outside sources can affect the way industrial real estate is used. China’s economy being low can create a ripple effect that would create another crash. From there, America would have to overcome and start rebuilding, something that took almost 9 years to dig out of. As long as there are industrial buildings going up, and are being occupied, the market should stay stable.


The state of Illinois is an interesting place in my opinion. You have this whole state that is completely different from its major city. In my quick assessment, I would say that a good 60% of the state is rural. Maybe the number is a little high but it can demonstrate the extreme differences between the state itself and its biggest city. Industrial real estate is huge in the city of Chicago. If you can secure land and build on it, then lease that building to a company, you’re probably set financially forever. However, it does benefit an industrial real estate company to branch out into neighboring states to find other ways to lease out their buildings without breaking the bank.

It has been known for some time on social media and in the mainstream media that the state of Illinois is having financial issues. However, when you look at the industrial market in Chicago, renting commercial space is as high as it has been in ten years. Specifically, in the last 2 years, Chicago has shown that even with the financial issues the state is having, its buildings are being rented or leased. While Chicago has been on the upswing, its same industrial real estate people are looking towards not only Northwest Indiana, but also Southern Wisconsin for build buildings. Most of the work being done in these neighboring states has to do with manufacturing. Manufacturing buildings don’t need to be top notch buildings because of the nature of the work. However, that does not mean that there aren’t any chances of building growth in these states. A company in Indianapolis has built a building that already has tenants signed on to long term leases. In Indiana specifically, it makes sense to build, because the property taxes are going to be lower for a developer, therefore making the rental space more affordable for the company leasing the building. This could also stimulate the economy as a new business moves into the area and creates new jobs for the community.

As industrial real estate developers move from Chicago to Northwest Indiana and Southeastern Wisconsin, they should see a better or similar scope of benefits from those economies. However, it is crucial to understand that the state of Illinois, Chicago specifically holds the key in that success. Without Illinois, the neighboring states would end up folding. The state of Illinois must stay afloat in order for industrial real estate developers to continue building not only in Chicago and its suburbs, but also in Indian and Wisconsin.

Maybe the state of Illinois will come back from its current financial situation, and maybe it will hang by a thread for years to come. However, if the continued financial downturn continues, industrial real estate players will have to invest in new areas, creating a mass exodus from the state, leaving Illinois as cripples as ever. Not only would Illinois fall, but Chicago would start to go as people leave the city. It is clear that Illinois has to stay above water so the neighboring states can see real estate growth.


The Chicago industrial market is not seeing any signs of letting up into the next year. This area also includes the Northwest Indiana region; looking at a map you can see why this space is also included. The area is almost a continuous region of the area of Chicago, barring any stateliness and city jurisdiction.

In the Chicago metropolitan area there is around 18 million square feet of industrial development during the last year. This is some of the best seen progress since 2008 and has outpaced anything in the market and there’s no reason to think that this is going to let up anytime soon. The Chicago land area and surrounding designated industrial area is one of the fastest growing areas in all of the country.

Last year was also one of the best years in an entire decade according to a Real Estate forecasting group based out of the Chicago Loop.

In the past year Chicago has not only outperformed itself but also various regions across the United States, shedding any preconceived notions about what Chicago can offer for the industrial industry. Areas like L.A. and the east coast have gotten a lot of coverage but barely compare to what Chicago is putting out now.

Capitalization & Procurement

Venture One just recently purchased one million square feet in Northwest Indiana because of logistics and advantages for being on the border. One of the prime reasons and movers of this entire uptake in real estate is because of online retailers like Amazon and other ecommerce sites.

A new trend is for warehouses to have a small amount of assembly since there are a lot of custom orders, but e-commerce is catching up and seeing a major growth in the industry.

Along with the ecommerce industry, there is still a lot of manufacturing going on in the Southeast parts of Wisconsin, Northwest Indiana and the Chicago Metro area. In terms of a workforce these two states employ the most in terms of having a lot of citizens working in the manufacturing industries.  Commodities drive a lot of the economy here and it has the old school manufacturing feel that is needed to fulfill these types of jobs.

Types of Buildings

Many of these industrial buildings being picked up are buildings that aren’t modern and do not require the uptake that many other companies require that includes high tech industrial standards. The companies buying up these buildings are content to buy twenty five year old buildings and repurpose them for what they need.

Along with these older buildings there’s also still room for growth for modern type buildings. One of the examples is a building out in Indianoplis being built in Hobart’s Northwind Crossings and is 160,000 square feet.

The building is almost in the final stages of completion and already has some potential tenants lined up for purchase. There is a lot of land out there that can house these new developments as well as older buildings that can be repurposed and built upon and that is why the Chicago industrial area will continue growing.



chicago industrial

For the past few years, Chicago has done well each quarter in providing a great industrial market. Much of this activity is coming from major submarkets in the area, especially those close to the I-55 Corridor, O'Hare, I-88, and I-80. Large organizations such as Mars and Saddle Creek are constantly looking to find space within the Chicago submarkets. These two companies signed leases back in 2015 at the CenterPoint Intermodal Center located in Joliet, Illinois, which is a suburb of Chicago. Since the market is performing so well, Chicago can expect more industrial growth in the future.

New development in the area

George Cutro, the director of industrial research at JLL, said that throughout the city and suburbs, there are 48 projects currently under development. JLL provides real estate strategy, services, and support to organizations across the globe. All of these projects combined, take up 13.8 million square feet of inventory. Of course this number is nowhere close to what it was before the recession hit, but it is continuing to grow. There has also been a shift in building size of new construction areas within the past 18 months, according to Neal Driscoll. Driscoll is the Vice President and City Manager at Liberty Property Trust. This is because developers see big box industrial trends to be more of a commodity than multi-tenant products. Still, Cutro works with users who want modern, sleek functional products.

2016 industry trends

With an ever changing market, industrial experts say that 2016 is the year of new trends, which you can expect to see in Chicago. One of these trends was in developing a 1 million square foot locations for growing demands. In 2015, there were two 1 million square foot plus built to account for all signed leases. With a growing market, usually only one of these is seen per year, but there were two in 2015. Another industry trend becoming more popular is e-commerce. In fact the company Amazon signed five leases within the Chicago market this year. One of these was at a 475,100 square foot space located in Joliet. These trends are definitely something the industrial market can expect to continue in 2016.

Industrial experts surprised

There were some things that happened in 2015 that did surprise experts in the industrial field. Cutro was surprised by the amount of money chasing industrial product. This is because there were two pre-sales of speculative developments for the year, which hasn't been witnessed since before the recession. Speculative and build-to-suit developments have both been growing and thriving, but speculative developments have surpassed build-to-suit completions. Comparing numbers, 8 million square feet of speculative developments were completed in 2015, versus 5.9 million built-to-suits. This is the first year since the recession that the Chicago market has seen substantial speculative development. It is something that came as a surprise, but a good surprise.

What this means for vacancy rates

Since Chicago is the second largest industrial market in the U.S., vacancy rates have been dropping over the past few years. Research from JLL shows that Chicago vacancy was at 6.8 percent in the third quarter, which was down 70 basis points from the previous quarter. This marks the 20th consecutive quarter with positive results. It seems like the industrial market in Chicago will remain a thriving field.