Why invest in Chicago real estate? Robyn Lynn, Cawley Commercial Real Estate’s Licensed Business Manager, breaks down as to why Chicago may lean in investors’ favors. From being a primary market without the pricing to its diverse economy, Chicago deems itself as the city that checks all of the boxes.
1.) Primary Market Without the Primary Market Pricing
New York has always been #1, and until 1982 we were commonly known as The Second City. Los Angeles took that away from us and now we’re #3. Regardless of what ranking our city holds, we are still a primary market, with an affordable cost of living, and a market where prices are rising steadily to offer attractive cap rates for investors. If we compare office product in New York’s Financial District to Chicago’s Loop you’ll pay on average $16.08 more per square foot to be in New York. If traditional CBD office space and florescent lighting isn’t the vibe your company is going for, we can look at New York’s SoHo District and Chicago’s Fulton Market. For an office with an Industrial feel to it you’ll pay about $28.69 more to be in SoHo.
Industrial between the two cities tells a similar story, with average Industrial rents being $8.30 PSF higher. This comes with an interesting twist, in New York the average industrial cap rate is 5.7%, where Chicago your investment will bring in an average 7.5% rate of return.
Something to take into consideration is the affordability for your employees, A one-bedroom apartment in Chicago’s Loop is about $1,579.00 cheaper per month than living in the heart of New York’s Financial District.
Pricing – PSF
OFFICE:
Loop vs. Financial District
Loop: $40.27
Financial District: $56.35
INDUSTRIAL AS A WHOLE:
NY Industrial Market Rent Industrial: $16.54
Cap Rate: 5.7%
Chicago Industrial Market Rent: $8.24
Cap Rate: 7.5%
AFFORDIBILITY FOR RESIDENTS:
The Loop Average Rent: 1 BR. $1,921
The Financial District Rent: 1BR. $3,500
*Numbeo lists rent as 45.45% cheaper than New York
2.) #1 U.S Market for Logistics
When analyzing transportation costs, distance and time traveled, and accessibility, Illinois consistently ranks #1 as the top U.S. Market for Logistics. Chicago’s location on the shores of Lake Michigan and along the banks of the Chicago and Calumet rivers give Chicago easy access to a network of inland waterways, as well as access to world markets via the Great Lakes and St. Lawrence Seaway. In addition to its own port facilities, Chicago lies within a short distance of the nearby Port of Indiana at Burns Harbor. The Metropolitan area is an idea midway point for distribution to other major markets. O’Hare International Airport is consistently one of most internationally connected airport in the United States and globally. In addition, O’Hare ranks among the top US airports in terms of the volume of cargo handled at the terminal. Illinois has the largest intermediate switching terminal railroad in the U.S., the Beltway Railway. Chicago is the nation’s freight hub. 50% of intermodal trains and 25% of freight trains in the United States pass through Chicago. Chicago serves as the main interchange for the continent’s western and eastern railroads.
3.) Diverse Economy with Strong Talent Pool
Chicagoland is home to one of the world’s most diversified economies, with Chicago’s Fintech ecosystem as one of the strongest, growing sectors. Chicago thrives with its robust and educated workforce. According to World Business Chicago, we are home to over 3.7 million working age-adults. We consistently rank in the top 10 of major U.S. Markets for talent pool of software developers and computer analysts. In addition, the Chicago metropolitan area has one of the lowest unemployment rates of the top five major metro areas (4.3% – Dec. 2021). Currently home to twenty-three, Chicago is emerging as a global capital for unicorns – companies that achieve a $1 billion valuation.
Looking for a Market Expert in the Chicagoland area?
As Cawley Commercial Real Estate provided insight as to why Chicago is the place to be, if you are looking for property managers in the Chicagoland area and need assistance, please feel free to contact us. Our highly skilled and experienced experts will help you along this process and can answer any questions you may have.