Relatively High Yields on Commercial Property Prompting Firms to Buy in Chicago
REJournals reports: James A. McShane, Staff Writer at the Midwest-focused REJournals, recently posted his evaluation of the Chicago commercial real estate market, and his opinion of where it is going in the near future. He states in general, “While the market experienced a slight boost in early 2010, it was short-lived for many…the Great Recession actually ended in June 2009, although signs of that milestone are fairly invisible to those in the commercial real estate markets.”
Mr McShane uses macroeconomic and national market conditions as a benchmark for his Chicago comparisons. For instance, “The strength of retail sales and the direction of the Consumer Price Index are also strong gauges for the return of the Chicago industrial market.” This index has increased by 1.2 percent from July 2009 to July 2010. While industrial sales are likely to post a slow recovery over the next year or two, Mr McShane states that cap rates across the US are still at historically low levels, according to Real Capital Analytics. This is prompting some companies to take advantage of “cap rate stabilization” that indicates a “secure market.”
The article also clearly supports the notion that Chicago will fare better than other less visible cities as the recovery picks up steam in the upcoming quarters. As an international city, with the ability to attract large amounts of both domestic and foreign capital, Chicago was ranked among Real Capital’s “major” markets in a recent analysis of major/primary vs. secondary and tertiary markets in the company's weekly online interactive US Capital Trends report. Mr McShane cites Chicago’s transportation advantages and its local industrial market – the third largest in the nation – among the city’s other advantages. For the future, he sees the market continuing on a positive upward trend, with financially stable companies gaining market share and positioning themselves for the “eventual return to prosperity.”
View the full article on REJournals: Relatively High Yields on Commercial Property Prompting Firms to Buy in Chicago
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Posted by: Nina Turner