The third annual Mid-Year Perspective on Chicago Real Estate Markets from The Real Estate Center at DePaul University opened on a note that bordered on exhaustion. An image of a masked businessman was overlaid with the words, “A year like no other… and it’s only halfway done.”
Part of the reason for the dour note may be that the report focuses on commercial real estate, which is certainly having a tougher time weathering the coronavirus pandemic than residential. While economists with the National Association of Realtors and the National Association of Home Builders have both suggested the real estate market will experience a V-shaped recession, where a deep dive is followed by a steep and rapid climb, the professionals surveyed for the report see a different shape. “More than 42% of participants believe the shape of the recovery will be elongated and look like a Nike Swoosh,” the report noted.
Even the reports of optimism from survey respondents — which include members of the Urban Land Institute Chicago District Council — were downplayed by report authors. While almost one-third of survey respondents said they were either optimistic about the future or trending that direction, the report stated that the reason behind this may not be grounded in economic facts on the ground (though it did cite Illinois’ relatively rapid and strict lockdown as part of the rationale).
“People want to be optimistic; they are sick of COVID-19 and want it to be over,” Charles Wurtzebach, director of the DePaul’s Real Estate Center, was quoted saying in the report. “There are no quick solutions. Chicago has always shown a certain resiliency and tended to be a ‘steady Eddie’ market with less pronounced peaks and troughs. We all hope that holds up.”
Retail and office sectors are obviously not favored by investors at the moment. But two out of three of the local real estate niches that were predicted to have the most rapid recoveries were in areas that will cheer many readers of Chicago Agent magazine. First, the report suggested that multifamily properties will join industrial ones in having some of the fastest recovery times. Second, researchers predicted “a modest shift in investments to the suburban markets,” which, in Chicagoland, have not been as robust as the city in recent years.