One of the world’s great cities, Chicago’s diversified economy and eclectic culture attract talent, jobs and investment capital, even amid challenges. Roosevelt University’s Collete English Dixon and CBRE’s Lisa Konieczka join Spencer Levy to share insights on the Windy City’s blueprint for growth and revitalization.
My Kind of Town: The Deep Dish on the Future of Chicago
January 25, 2022 37 Minute Listen
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Spencer Levy
I'm Spencer Levy, and this is The Weekly Take. To start this conversation, I'll use the words of a renowned crooner who, like me, grew up in the New York City area. But he famously sang that the subject of this show is “My kind of town”. On this episode, we'll talk about a city that the late, great Frank Sinatra and I both love: Chicago.
Collette English Dixon
This city is a city with a ton of ways to build better, to build more, to improve and enhance.
Spencer Levy
That's Collette English Dickson, executive director of the Marshall Bennett Institute of Real Estate at Roosevelt University. A school with two campuses in the Greater Chicago area, including a 32 story vertical campus in downtown Chicago's South Loop neighborhood. Prior to this role, Collette built an impressive career as a development executive, with deals worth more than $12 billion across a variety of sectors.
Lisa Konieczka
The other thing that is different from maybe some of our like-kind of cities that are on the coast is we have the availability of land and the ability to grow.
Spencer Levy
And that's Lisa Konieczka, a CBRE executive vice president in our Chicago office. Lisa has been at CBRE for nearly 35 years handling transaction-based real estate services for corporate clients across the globe. She is also the founder and chair of the CBRE Women's Network and a member of CBRE’s Diversity Council. From the Loop to the shore of Lake Michigan and beyond, we'll cover all that this proud Midwestern metropolis has to offer, as well as what the doubters are saying about its challenges. Coming up the Second City. The Windy City. My kind of town. That's right now on The Weekly Take.
Spencer Levy
Welcome to The Weekly Take, and we're talking Chicago here today – the city, the real estate, not the band. And so to begin our episode, let's start with the simple question: Why Chicago? It's fair to say that there are a lot of people that have been down on Chicago. But there is a lot of positives that people don't see, not necessarily on the surface. And I'd like to know why Chicago? So Collette, let me start with you.
Collette English Dixon
Why not Chicago? I mean, Chicago is the third to fourth largest city in the country. It has an incredibly talented workforce. It has proximity to the largest body of freshwater in the world. It has a diversity of economic sectors. It is a beautiful day, even in the winter. We've got a great basketball team. And from an economic perspective, the ability to come here for talent. Companies need talent, especially right now and coming here with both the educational institutions, the attraction to other Big Ten institutions and just the lifestyle makes it a hotbed of talent for people to have working for their companies. Why Chicago? Why not Chicago? It’s a perfect place.
Spencer Levy
Lisa would love your point of view on what you tell your clients about investing and occupying in Chicago.
Lisa Konieczka
I agree with everything that Collette just said, and particularly when you think about just the diversity of our city. Our city is built on the shoulders of all these amazing ethnic groups. We have got amazing food, restaurants, neighborhoods that are all driven by the immigrants that came to our country many, many years ago. And I think that that makes Chicago just really a very interesting place to be and a place to live. The culture, the museums, the lakefront, the parks, all of the different pieces that make it a wonderful place to live. And what does that do? That brings you back to labor. As to why do people want to live here? Why do people want to work here? But I think I'd add to what Collette English Dixon mentioned about really the diversity of our economy. And I'd say, you know, there are two other things when you think about it from a real estate perspective. One is there is just an amazing public transit and sort of commutation system that comes into play for Chicago. But the other thing that is different from maybe some of our like-kind of cities that are on the coast is we have the availability of land and the ability to grow, and that's allowing us to have more interesting new neighborhoods that are coming up that are going to really give us the chance to sort of come out of this time that we've been in in maybe a little bit different and more innovative of a way.
Collette English Dixon
But I also want to say just doesn't know what she's talking about new neighborhoods, Spencer. I think that cannot be an understated part of what's going on in the city. That really adds an element of excitement. It's the ability to invest in areas that have been disinvested and create new opportunities. The city is a city with a ton of ways to build better, to build more, to improve and enhance. And I think that that's a really unique set of opportunities for the industry and business in general.
Spencer Levy
Let's go back to the neighborhood comment you made Collette English Dixon a moment ago.
Collette English Dixon
Mmm Hmm.
Spencer Levy
One of the things that's great about cities like Chicago, L.A., New York is they're constantly reinventing themselves. And you mentioned the Fulton Market as Exhibit A of a place that was not on anybody's radar screen, but now has some of the biggest occupiers, coolest restaurants and new multifamily in town. Tell us about Fulton Market and why it's working, Collette English Dixon.
Collette English Dixon
Wow, you know, Fulton Market is on top of everybody's list to try to discern, how did you get there? You know, 10 years ago it was nothing. It was a bunch of warehouses and low slung buildings that were occupied by, you know, meat purveyors and vegetable guys. It was rough and tumble and someone decided that this would be perfect because it sits just outside the city, just outside the CBD. It's proximate to transit. They created a train station that stops there. It is readily accessible to the interstates. It is a five-minute drive across the bridge to get into the CBD. And after Google decided that it was going to occupy what had been an old cold storage building that had to be thawed out and put its headquarters there, it just exploded. Now, with all of that explosion – restaurants, housing, services, retail – you wind up attracting this energy. And it is totally where everybody wants to be right now or they want to try to recreate it somewhere else. So it has created a new model for us in Chicago and how to like create new subdivisions, new communities and, you know, new neighborhoods and new submarkets. It's amazing.
Lisa Konieczka
Everything I said is a really wonderful sort of synopsis of Fulton Market. But when you think about, particularly over the last 24 months, why occupiers are making decisions about where they're going to occupy a space – and we're seeing a lot of focus in the Fulton Market area versus, you know, as much of an intensity around the central business district - and a lot of that has to do with that Fulton Market is more of a 24-7 neighborhood, not unlike sort of the growth that we saw over the last 10 or 15 years in River North, which is also a 24-7 more mixed use type of environment. We're seeing that push westward into Fulton Market. It's lower density, and I think a lot of people look at wanting to have a little bit more light and air in times like this. If you're going to come to the office, you want it to be – you know, we talk about magnetize in the office and bringing people back into the office environment because it's going to provide them with value. And so high levels of amenities, high levels of mixed use properties, lower density and also having things to do beyond what's inside the office really makes a difference. And that certainly is one of the challenges that the central business district is going to have to continue to work on, which is really it's more of a nine to five environment. It isn't as broad of a mixed use.
Spencer Levy
Well, it's more than just Fulton Market, there are a lot of great emerging neighborhoods within the city. Lisa, why don't you dig a little bit deeper
Lisa Konieczka
I will mention there are a couple of other new neighborhoods that are on the horizon for Chicago, and this is that lack of that, that we have no lack of land, right? So we have the ability to continue to expand. Certainly one of those where there is a more of a 24-7 environment would be Lincoln Yards, which is up on the north side in Lincoln Park, which would be another place where there's the opportunity to have that body of water with the river kind of running through Lincoln yards. Certainly the 78, which is down on the south side. Also right along the river, close to a lot of potential educational complexes and really could be another really great area of new development. So what we're seeing is that while we've got the density of the central business district, all of those less dense and a little bit more mixed use type of environments are becoming pretty attractive.
Spencer Levy
Let's talk about the city for a moment. On a prior show, we had one of our clients who owns quite a bit in downtown Chicago, spending hundreds of millions of dollars to convert those buildings – not into something other than office, but the hyper-amenitize them. Make them more live-work-play in the same place. Collette English Dixon, what do you say to people that have a concentration in CBD Chicago?
Collette English Dixon
They really do need to look at how they can best differentiate themselves in what is a very, very competitive space. In an interesting conversation with some of the other developers who are building at the western edge of the Loop right now, talking about how they're competing for tenants, there is becoming a distinct split between the uber A's and everybody else. And it's those new buildings that have the high-end HVAC, the amenities, all the really cool bells and whistles that it takes for companies to think that they can bring their employees back into the workplace – it's having those tools that's going to make them the basically the recipients of a lot of the leasing that's going to happen in the city. And there are opportunities for buildings that are in unique locations like the South Street corridor, which is being looked at as in the midst of a transformation between being purely kind of an office space, an office corridor, the financial district spine. As companies have left those buildings and left significant square footage behind. Now is the time to look at how you change the nature of some of these corridors, how you bring in some of the drivers of residential entertainment, restaurant, different services that revitalize and energize the areas around these buildings. So if you own buildings in any of these spaces, if you are not in a building that has the latest and greatest bells and whistles and all of the great neighborhood vibe that goes around – even like Lakeshore East or some of the stuff along the West Loop – you've got to think about how you bring a different energy to the building that you have. And it's not always going to be putting condos on the upper floors. That's not going to be the answer. It's going to be stuff that starts at the street level and works its way through. But this city will help with that. The city will actually respond to that. It's showing it in buildings already. And so I think that owners of other office buildings trying to figure out what to do need to look at those successes and figure out how they can implement similar changes to their properties and the city will respond.
Spencer Levy
Well, one of our clients, a German group called Commerzbank, owns a building called 125 South Clark in Chicago that has a beautiful food court on its first floor – and food court’s probably the wrong way to put it.
Collette English Dixon
It’s a food hall.
Spencer Levy
Food hall. Thank you very much.
Collette English Dixon
They’re called food halls now. Food courts are that old thing that you did in a shopping mall.
Spencer Levy
Exactly, exactly. The food hall. But it's super awesome. And 125 South Clark is probably –
Collette English Dixon
Revival.
Spencer Levy
– an 80 or 90 year old building. Right? So it can be done within the four walls. But I like the word you used, which is corridor, because it's not just your building. So Lisa, what are your clients saying about the top amenities that are necessary drivers and those that might be overrated, right?
Lisa Konieczka
You know, amenities really do rule today when it comes to making decisions. That's going to be certainly the competitive advantage that most of the landlords are going to have. And it really doesn't matter how old your building is, it can be brand new. It could be the Old Post Office, which is a really, really old building, but has got a ton of amenities, just like 125 South Clark also having a lot of great amenities. And I think that, you know, Chicago led the way with this. We've been doing this for a long time and we've really just had to step up our game, the amenities that are leading the charge. Shockingly, considering we're in the middle of winter in Chicago is outdoor space. Private outdoor space is really still considered to be a very important element. There are a lot of really creative amenities that we're seeing some landlords come forward with, certainly co-working and having some level of flexibility as an element of the amenities offered within the building. Obviously not for free. Those are certainly something you have to pay for. But certainly having that ability to flex within your building on an interim basis is important. I think there are other things that are focused around wellness. Even in the fitness centers and some of the newest buildings that are being built. As Collette English Dixon was mentioning in the west edges of the loop, their fitness centers have got wellness centers. They might have urgent care facilities, they've got meditation rooms, they have a variety of different resources that are provided. And again, I would go back to this idea of magnetizing in the office. Beyond just the value of coming and collaborating with your colleagues, you want to make sure that employees’ efforts coming into the office are met with a lot of different resources that they can use, and that's going to help to basically work that into the habit of them coming back in and collaborating more.
Collette English Dixon
You know, actually, I'm thinking that one of the things that has not really been talked about that is an opportunity for employers and building owners to think about is trying to address some of the outflows or outcomes of the pandemic on, kind of, family engagement. Right. So is this an opportunity for wellness centers to incorporate the concept of a little child care? A lot of the stresses that are being felt by people being asked to go back to the office is how to deal with their children. And that kind of truly holistic engagement may be a game-changer for some companies that may find an opportunity in their corporate headquarters to provide that service or office buildings who are willing to create those relationships that can provide that service to their tenants.
Lisa Konieczka
I'm going to add another piece to this, which may sound funny, but I think is really serious is – as somebody who is is T-minus three days from picking up a brand new eight-week old golden retriever puppy – everybody got COVID pets, right?
Collette English Dixon
Yep.
Lisa Konieczka
That is going to be a barrier to people coming back there. Like, I've got a dog at home. I can't leave that dog or I can only be in for a little while. So I think addressing pets. I know it sounds crazy, but I really do think that that's going to be another piece of the picture.
Spencer Levy
Well, my dog Murphy, a bearded collie who is under my desk as I am doing this interview right now, agrees with you.
Lisa Konieczka
Absolutely.
Spencer Levy
But it does bring up a question regarding labor now that is absolutely positively one of the great drivers of Chicago. So talk to me about the labor availability in Chicago – how that’s a positive or maybe a challenge?
Collette English Dixon
Well, I think that historically, as we talk about the growth or the availability of talent in Chicago, we always talk about that attraction from the college side. We have an incredibly well educated population here, but we also have the reality of a very large service industry: hospitality, tourism, grocery stores are your neighborhood, dry cleaner, all of that. They're under an incredible amount of pressure. And I think the challenge that we're going to face is how to provide them with the sort of living wage and the sort of occupational opportunity that meets their capabilities and their goals, but also provides the resource that employers need. We always talk about how many people are coming in Chicago. We always talk about the type of jobs that are available. For example, in December, there was like a four percent change in job postings for computer and mathematical occupations. What does that tell you? Those are college focused sort of roles. And the people who we’re really struggling with right now are those who may not be fitting those roles. They're in more service and labor intensive spaces. We are going to have a challenge trying to figure out how to make this work post-pandemic between health issues and how much wage is needed for a living wage in this city. Chicago is getting increasingly expensive. Affordable housing becomes an issue in the city. Transportation for people getting from communities that may be dominated by employees in the service industry, they need to be able to get to jobs. We need to work on transportation and infrastructure resources for them. There’s a lot that has to be improved upon, but yet it's not for lack of people. And it's not for lack of probably opportunity. We've got to figure out how to match these up better, and how we can actually bridge the gaps that have been exacerbated by the outcome of the pandemic. We've got to figure out how to make all these pieces fit for a truly equitable work environment and for a stronger and resilient labor pool.
Spencer Levy
Well, the subject of affordable housing has been discussed at some length on this show. The one subject we haven't talked about enough, but I think does touch on what you were saying, Collette is infrastructure. It's one thing to have a service need. It’s another thing for these service providers to be able to get there fast, efficiently, consistently. And Chicago, by the way, though their subway system might be old. It's irreplaceable. But I think it is a competitive advantage of Chicago that you have so many trains, even if they are imperfect and getting people from place to place B,
Collette English Dixon
It's a great resource for us to have. But you know, our Red Line stops five miles short of the end of the city. I mean, there is a huge band of the city that is not well accessed to that. And I think there's a lot of opportunity there. But yes, it is a phenomenal system when it works and it works well.
Spencer Levy
And you should know that every time I fly into O'Hare, I take the train into the city because it is much faster than taking a car service.
Lisa Konieczka
It is. The Blue Line is much better.
Collette English Dixon
And it only cost $2.50.
Lisa Konieczka
Yeah, and I'll add, one other piece to that is, you know, if you look at through the office occupier trends that have happened even over the last, say, five to 10 years, you've seen this major theme around suburban to downtown migration. And you look at, well, why is that happening? And certainly most of that is driven by – because it's more expensive downtown than it is in the suburbs, right? – so most of that is driven by a need to access the talent and the labor. And so if you look at it, it's not just our public transportation system, it's actually also the hub and spoke model of our highway systems, right? So if you sit in the city, you have access to the full breadth of all of the Chicagoland area talent versus being maybe having it where you've only got one side or on one side of the river or the other side of the river. So I think you combine all of those pieces and you look at the migration, and it certainly has proven that it has been useful and continues to be useful for a lot of companies to be occupying space downtown and attracting that talent.
Spencer Levy
Well, let's talk a little bit more about the industrial diversity of Chicago, and some of them are well known in the entertainment sector. You have several professional sports teams there. And you have a great downtown theater district, even if the Bears were to relocate out of town. You also have life sciences and a lot of venture capital. Tell us about some of the diversity of industries and how they're helping drive growth.
Lisa Konieczka
You know, that's the kind of the foundational element of Chicago is we have such a diversified economy talking a lot about what Collette said earlier. We have everything from a broad range of services sector as well as the office sector and the industrial side. On the entertainment side, I think Chicago continues and some of that is probably being driven more at the television level right now than it is as much at the movie level. We've got our famous movies, right? You got Ferris Bueller's Day Off. We've got Home Alone. We've got The Blues Brothers, all of those. But we've got, you know, Chicago Med, PD and Fire that are all being filmed on a weekly basis in Chicago. We all know that as Chicagoans, because we're constantly zig-zagging around all the different sets that are being filmed. Chicago doesn't have a lack of land, nor do we have a lack of buildings that can be converted into something that will adapt to new industry. But I think probably the life sciences is one of the most exciting areas of focus right now for Chicago. And it's interesting that it is sort of running hat in hand with a couple of our – Whoops! Well, there's the dog. Sadie, come here! Come here!
Collette English Dixon
You know, it's either like you can be on video and have your kid walk in in the middle of a major meeting. Or you can have your dog bark or your cat walk across the screen. There's always something going on
Lisa Konieczka
During a podcast. OK! So if you look at the life sciences sector and really where our growth is, what I find interesting is that that focus is on some of the new expanding neighborhoods that we were just talking about earlier. So whether that's Fulton Market or you look at Lincoln Yards, likewise, new area that's looking to do the same type of development or you look at the Illinois Medical istrict in some of those areas where there is certainly some support, it's not in the central business district, it's actually actually in these new neighborhoods where we see growth and what we believe is with such a great base of the north side – up near Lake Forest, where a lot of our large companies like Abbott and Baxter are housed – that we see this opportunity for a life sciences growth in Chicago, and we see these new neighborhoods as really being where that focus is,
Spencer Levy
Let's now talk about some of the doubters. There are doubters about Chicago. In fact, on last week's show, we had one of our guests, James Shevlin, the President and COO of CW Capital, say the following:
James Shevlin
"I'm very concerned about Chicago, where you've got older buildings, very expensive to improve that space and very large block space that has to be subdivided. Almost, it doesn't make economic sense on some of those buildings."
Spencer Levy
Collette, what do you say?
Collette English Dixon
I say it takes imagination. The city has – because it's an old city – it has a lot of very large, very old office buildings, which will take creativity and take capital to modify their use or renew their use. Take, for example, the redevelopment of the Post Office. The Old Post Office is a multi-million square foot property that sat totally vacant for 20-plus years. And what it took was a combination of time, space, imagination and guts. And 601W with the team that they assembled have pulled off what I think is the poster child for how you can re-imagine large older properties in a city like Chicago. If you recognize the demand that you're looking for, if you are open to the creative, multi-use benefits of having corporate offices along with amenity space, along with private party space and outdoor rooftops and all those things that business is demanding, you can get the sort of return and the sort of response that you need. And I think one of the buildings that everybody's talking about now is 135 South LaSalle, which was the one that had been the LaSalle Bank building, and it became the B of A building until B of A decided to build a shiny new headquarters in the West Loop. That building is massive. It's stunning. It's a historically landmark building, but it will be a creative redeveloper who finds a way to create value in that space once again, and they will be responded to.
Lisa Konieczka
You know what? We've talked a lot about our labor, our talent, the base of employees available to occupiers in Chicago still ends up being what leads the day. I've had the opportunity to represent several new companies that moved to Chicago over the last 18 to 24 months, and each one of those was driven first and foremost by labor. Secondarily, it was also driven by just the pure set that's available in Chicago. Chicago's a big city, but it's got a level of affordability to it. It's got a level of approachability to it. And I will say you can't forget Chicago's also in the middle of the country. So we are equally accessible to all parts of the United States, and that becomes a pretty big driver. We've got a huge airport, we've got all this accessibility. So when I look at a lot of my clients are in that professional services ranks where they have employees flying all over the country. And admittedly, that hasn't been happening as much over the last 18 to 24 months. But still, that value is really, really important.
Collette English Dixon
I just want to just note, I mean, just to put some real data on the table. I mean, in 2021, there were a hundred and seventy two companies that made a pro-Chicago decision. And that is seventy two new ones and 100 expansions. I think that says a lot. And I mean, our crime issue didn't just roll up in December. I mean, it's been an issue on the table for a long time. And we're also one of the lowest unemployment rates of our top competitive cities. And that's because people want to be here and people want to work. And that is a really important part of that puzzle that I just don't want us to lose face of.
Spencer Levy
Well, I think you take all of that and the relative affordability from a living and a cost of labor standpoint. And you compare that to some of our other great cities in America, in particular, San Francisco and New York, and it isn't close. There is just a lot to be said about Chicago. And that's before we coax Mike Ditka back to coach the Bears. But those are a lot of things that are beyond the scope of today's conversation,
Collette English Dixon
Especially Mike Ditka.
Lisa Konieczka
Yeah, yeah.
Spencer Levy
One of the things I wanted to mention to both you and Lisa, Collette, is you are two leaders, female leaders in the industry. Lisa, you run our women's network. Collette, you used to be the president of CREW. You're now the head of a big university. A lot of our listeners out there would just love to know your perspective. How do we get more women and minorities into our business? So Collette, maybe we'll start with you and then, Lisa, I'd like your perspective.
Collette English Dixon
Wow. You know, this has been the discussion for decades at this point. Right. And I think it's all about intentionality of this industry to provide both awareness and access to opportunities. Running this real estate institute at Roosevelt – Roosevelt is a very diverse urban city focused and a history of social justice and social equity – one of the things that I look at is the lack of awareness of this industry among virtually everybody else. We have a very interesting demographic that dominates this industry, and it's because it's driven by money. And when you don't have access to that capital, it's definitely a barrier. So we as an industry need to look at intentionally creating an outreach to young people so they know what the opportunities are and then help them find access to prepare for those opportunities. And then once they are prepared for them, to help them be successful by not just bringing them in the door and having them flounder, but to recognize that this diversity will require intentional engagement on an ongoing basis for people of color, women, people from other diverse engagements so they can find a place in this industry and be successful. And I just marvel at the challenges we seem to have with that model because it doesn't seem to be that hard to me. And it doesn't seem like it's rocket science to figure that out – because oh, by the way, this is not a rocket science industry – that we have not been able to do better when we've been talking about diversity in this industry for my entire career.
Spencer Levy
Lisa, what do you think?
Lisa Konieczka
No, I agree. I think that it starts with this core fundamental of diversity of thought leads to brilliant ideas. Right? So if you don't have a diverse group of people around the table, how will you ever get to those brilliant ideas? And so when I think about it, I appreciate everything Collette said because that really starts the conversation about how to get people into the industry. But I think there's this other piece that is so important is that we've spent so much time over the length of my career and the almost 22 years I've been running the women's network at Seabee, just trying to get a woman into a role. A diverse person into a role. And time and time again, I think the studies prove that it is very difficult for a person to be successful as the only diverse person at the table.
Collette English Dixon
Absolutely.
Lisa Konieczka
You need a group of people at the table that you need a group of diverse people at the table. And I'll look at CBRE as a great example of that. You know, at the beginning, we were getting a woman into a role and it was so hard for her to really achieve and succeed in that role, whether it was a stretch role or not. But once we got a few women and a few diverse people around the table, it was just absolute, sort of, perfect movement forward because there was enough support for there to be success. So I look at it as two ways. One is, I know we have to walk before we run, which means we have to get people into those roles. But then we have to move. It's not just a check the box. This is about getting amazing talent and diverse thought to get to those brilliant ideas. And that means a lot of people with a lot of diverse backgrounds are really important. So I know for CBRE, our focus is really developing our women, increasing their networks and increasing their profile. Because the key is you've got to know who's on the bench. And unfortunately, leaders not all the time at many companies think about their bench as diversely as they should. So if we can get more diversity on the bench where you get more people into those roles and then move the ball forward
Spencer Levy
Agreed with all that. And we have a long, long way to go. But I think that if there is any silver lining to the terrible COVID crisis we've gone through and some of the social unrest we saw in the summer of 2020, I think that this has now move way up on the agenda, that people are really focused on it and hopefully that will show up with tangible results for people on all different levels within our business.
Lisa Konieczka
Spencer, I must add one thing to that, though, is I will say that, you know, the pandemic is said in some studies to have set back the gender equality movement by 20 years. Two years sets it back by 20 years because so many women had to make decisions about their families. It's the same deal whether it's about a diverse candidate or about a woman. The focus is there, but the issue got bigger during the last twenty four months, so that's the part we really have to focus on as well.
Collette English Dixon
I agree. Absolutely important.
Spencer Levy
Well, Collette and Lisa, let's fast forward three or four years in Chicago. Looking back. What are we going to see? What do you think is going to be the changes to Chicago positive or negative in the next three to four years, Collette?
Collette English Dixon
Oh, wow. I mean, I could get into all sorts of things. I think we'll have a different mayor. I don't know that that's a popular comment, but I do think that's very likely. I can't envision who that's going to be, but I do think that is likely to be the case. And with that will come a whole different level of expectations and probably disappointments on how you can actually move the needle on some of our more challenging issues. But I think we will find that the CBD will begin to evolve from its historical, very office-focused engagement to being something much more diverse in how our various corridors are engaged with different industries, different uses. And I think that will give a different vitality as a rebound from what we currently see as a very, very quiet CBD as we're kind of getting through the pandemic. I think we'll see some great successes from the expansion of O'Hare. I think we'll start to feel some of the benefits of the other infrastructure investment that has been pledged as a result of the Build Better bill that has delivered a significant amount of money to the city. I think what we will benefit from there will be wonderful. But I think we're still going to be struggling with some of the issues around economic inequity in our neighborhoods. These are not easy fixes because they didn't happen quickly. They won't be changed quickly. But what I hope we'll see is a continued determined effort to right those issues and find pathways to enhance the quality of life, education and economic viability of our neighborhoods, which will contribute to the strength and the vitality of our city as a whole. That's my vision.And probably three to four, maybe five years out, but that's what I hope we'll see.
Lisa Konieczka
I agree with what Collette said around what I hope for our city as a whole. So maybe I'll spend a little time focused on what I hope for on the real estate side of things for Chicago. I see that there will be continued growth in Fulton Market, but I think that at least one of these other neighborhoods, whether it be Lincoln Yards or the 78, is going to take off. Some part of it is going to start to go in the next, let's say, five years knowing it takes 24 to 36 months to build a building in Chicago. And I think that it's going to be driven by the pendulum kind of swinging back, right? The pendulum of how you work has swung all the way to the edge, right? Everybody wants to work from home. Everybody's comfortable being in a remote environment. And I do believe that as the pandemic becomes endemic or starts to recede from being in crisis that pendulum is going to swing bac. And then what's going to happen is this is going to be a focus, though, on making opportunities for occupancy proximate to where people live so that it makes it part of their life versus a place that they go. And so I do believe that we will see some additional development start to expand further out. What happens within the more central business district? I think I'll borrow Collette's word. It really boils down to creativity. I give 601W a lot of credit for what they were able to envision, along with the Telos organization at the Post Office. They hit it out of the park and I think it's a great example of what can continue to happen. I think 125 South Clark is another great example of taking an old asset and completely revisiting it. So I think that that's going to take a little more time because you got to pull the creativity together and then do all the work, so that may take three or four or five years. But I think that's going to be probably the next step after that.
Spencer Levy
So on behalf of The Weekly Take, I first want to thank Collette English Dickson, executive director of the Marshall Bennett Institute of Real Estate at Roosevelt University, and I'm proud to say a longtime friend of mine, former president of CREW, just one of the great leaders of our industry. Collette, thanks for joining us.
Collette English Dixon
Thanks, Spencer. It's been a blast.
Spencer Levy
And then I want to thank another great friend of mine, Lisa Konieczka, one of the leading leasing experts in Chicago and beyond the head of CBRE Women's Network for so many years. And just a terrific professional and expert on the Chicago market. Lisa, thank you so much for joining the show.
Lisa Konieczka
Thank you so much for having me. It's really been so much fun to see you guys and talk to you today.
Spencer Levy
Thanks again to our guests – to Lisa's dog, Sadie as well – and to you, of course, for taking part in our tour of Chicago. For more, visit our website CBRE.com/TheWeeklyTake. In the weeks to come, we'll explore other cities and markets, including an episode on Dallas that we've got in the works. And in the spirit of the Super Bowl coming up in a matter of weeks, we'll be talking football and commercial real estate with the chief of staff of the L.A. Chargers. As we get set for the kickoff of those programs and more. We hope you'll share this one as well as subscribe, rate and review us wherever you listen. Thanks again for joining us. I'm Spencer Levy. Be smart. Be safe. Be well.
Spencer Levy
I'm Spencer Levy, and this is The Weekly Take. To start this conversation, I'll use the words of a renowned crooner who, like me, grew up in the New York City area. But he famously sang that the subject of this show is “My kind of town”. On this episode, we'll talk about a city that the late, great Frank Sinatra and I both love: Chicago.
Collette English Dixon
This city is a city with a ton of ways to build better, to build more, to improve and enhance.
Spencer Levy
That's Collette English Dickson, executive director of the Marshall Bennett Institute of Real Estate at Roosevelt University. A school with two campuses in the Greater Chicago area, including a 32 story vertical campus in downtown Chicago's South Loop neighborhood. Prior to this role, Collette built an impressive career as a development executive, with deals worth more than $12 billion across a variety of sectors.
Lisa Konieczka
The other thing that is different from maybe some of our like-kind of cities that are on the coast is we have the availability of land and the ability to grow.
Spencer Levy
And that's Lisa Konieczka, a CBRE executive vice president in our Chicago office. Lisa has been at CBRE for nearly 35 years handling transaction-based real estate services for corporate clients across the globe. She is also the founder and chair of the CBRE Women's Network and a member of CBRE’s Diversity Council. From the Loop to the shore of Lake Michigan and beyond, we'll cover all that this proud Midwestern metropolis has to offer, as well as what the doubters are saying about its challenges. Coming up the Second City. The Windy City. My kind of town. That's right now on The Weekly Take.
Spencer Levy
Welcome to The Weekly Take, and we're talking Chicago here today – the city, the real estate, not the band. And so to begin our episode, let's start with the simple question: Why Chicago? It's fair to say that there are a lot of people that have been down on Chicago. But there is a lot of positives that people don't see, not necessarily on the surface. And I'd like to know why Chicago? So Collette, let me start with you.
Collette English Dixon
Why not Chicago? I mean, Chicago is the third to fourth largest city in the country. It has an incredibly talented workforce. It has proximity to the largest body of freshwater in the world. It has a diversity of economic sectors. It is a beautiful day, even in the winter. We've got a great basketball team. And from an economic perspective, the ability to come here for talent. Companies need talent, especially right now and coming here with both the educational institutions, the attraction to other Big Ten institutions and just the lifestyle makes it a hotbed of talent for people to have working for their companies. Why Chicago? Why not Chicago? It’s a perfect place.
Spencer Levy
Lisa would love your point of view on what you tell your clients about investing and occupying in Chicago.
Lisa Konieczka
I agree with everything that Collette just said, and particularly when you think about just the diversity of our city. Our city is built on the shoulders of all these amazing ethnic groups. We have got amazing food, restaurants, neighborhoods that are all driven by the immigrants that came to our country many, many years ago. And I think that that makes Chicago just really a very interesting place to be and a place to live. The culture, the museums, the lakefront, the parks, all of the different pieces that make it a wonderful place to live. And what does that do? That brings you back to labor. As to why do people want to live here? Why do people want to work here? But I think I'd add to what Collette English Dixon mentioned about really the diversity of our economy. And I'd say, you know, there are two other things when you think about it from a real estate perspective. One is there is just an amazing public transit and sort of commutation system that comes into play for Chicago. But the other thing that is different from maybe some of our like-kind of cities that are on the coast is we have the availability of land and the ability to grow, and that's allowing us to have more interesting new neighborhoods that are coming up that are going to really give us the chance to sort of come out of this time that we've been in in maybe a little bit different and more innovative of a way.
Collette English Dixon
But I also want to say just doesn't know what she's talking about new neighborhoods, Spencer. I think that cannot be an understated part of what's going on in the city. That really adds an element of excitement. It's the ability to invest in areas that have been disinvested and create new opportunities. The city is a city with a ton of ways to build better, to build more, to improve and enhance. And I think that that's a really unique set of opportunities for the industry and business in general.
Spencer Levy
Let's go back to the neighborhood comment you made Collette English Dixon a moment ago.
Collette English Dixon
Mmm Hmm.
Spencer Levy
One of the things that's great about cities like Chicago, L.A., New York is they're constantly reinventing themselves. And you mentioned the Fulton Market as Exhibit A of a place that was not on anybody's radar screen, but now has some of the biggest occupiers, coolest restaurants and new multifamily in town. Tell us about Fulton Market and why it's working, Collette English Dixon.
Collette English Dixon
Wow, you know, Fulton Market is on top of everybody's list to try to discern, how did you get there? You know, 10 years ago it was nothing. It was a bunch of warehouses and low slung buildings that were occupied by, you know, meat purveyors and vegetable guys. It was rough and tumble and someone decided that this would be perfect because it sits just outside the city, just outside the CBD. It's proximate to transit. They created a train station that stops there. It is readily accessible to the interstates. It is a five-minute drive across the bridge to get into the CBD. And after Google decided that it was going to occupy what had been an old cold storage building that had to be thawed out and put its headquarters there, it just exploded. Now, with all of that explosion – restaurants, housing, services, retail – you wind up attracting this energy. And it is totally where everybody wants to be right now or they want to try to recreate it somewhere else. So it has created a new model for us in Chicago and how to like create new subdivisions, new communities and, you know, new neighborhoods and new submarkets. It's amazing.
Lisa Konieczka
Everything I said is a really wonderful sort of synopsis of Fulton Market. But when you think about, particularly over the last 24 months, why occupiers are making decisions about where they're going to occupy a space – and we're seeing a lot of focus in the Fulton Market area versus, you know, as much of an intensity around the central business district - and a lot of that has to do with that Fulton Market is more of a 24-7 neighborhood, not unlike sort of the growth that we saw over the last 10 or 15 years in River North, which is also a 24-7 more mixed use type of environment. We're seeing that push westward into Fulton Market. It's lower density, and I think a lot of people look at wanting to have a little bit more light and air in times like this. If you're going to come to the office, you want it to be – you know, we talk about magnetize in the office and bringing people back into the office environment because it's going to provide them with value. And so high levels of amenities, high levels of mixed use properties, lower density and also having things to do beyond what's inside the office really makes a difference. And that certainly is one of the challenges that the central business district is going to have to continue to work on, which is really it's more of a nine to five environment. It isn't as broad of a mixed use.
Spencer Levy
Well, it's more than just Fulton Market, there are a lot of great emerging neighborhoods within the city. Lisa, why don't you dig a little bit deeper
Lisa Konieczka
I will mention there are a couple of other new neighborhoods that are on the horizon for Chicago, and this is that lack of that, that we have no lack of land, right? So we have the ability to continue to expand. Certainly one of those where there is a more of a 24-7 environment would be Lincoln Yards, which is up on the north side in Lincoln Park, which would be another place where there's the opportunity to have that body of water with the river kind of running through Lincoln yards. Certainly the 78, which is down on the south side. Also right along the river, close to a lot of potential educational complexes and really could be another really great area of new development. So what we're seeing is that while we've got the density of the central business district, all of those less dense and a little bit more mixed use type of environments are becoming pretty attractive.
Spencer Levy
Let's talk about the city for a moment. On a prior show, we had one of our clients who owns quite a bit in downtown Chicago, spending hundreds of millions of dollars to convert those buildings – not into something other than office, but the hyper-amenitize them. Make them more live-work-play in the same place. Collette English Dixon, what do you say to people that have a concentration in CBD Chicago?
Collette English Dixon
They really do need to look at how they can best differentiate themselves in what is a very, very competitive space. In an interesting conversation with some of the other developers who are building at the western edge of the Loop right now, talking about how they're competing for tenants, there is becoming a distinct split between the uber A's and everybody else. And it's those new buildings that have the high-end HVAC, the amenities, all the really cool bells and whistles that it takes for companies to think that they can bring their employees back into the workplace – it's having those tools that's going to make them the basically the recipients of a lot of the leasing that's going to happen in the city. And there are opportunities for buildings that are in unique locations like the South Street corridor, which is being looked at as in the midst of a transformation between being purely kind of an office space, an office corridor, the financial district spine. As companies have left those buildings and left significant square footage behind. Now is the time to look at how you change the nature of some of these corridors, how you bring in some of the drivers of residential entertainment, restaurant, different services that revitalize and energize the areas around these buildings. So if you own buildings in any of these spaces, if you are not in a building that has the latest and greatest bells and whistles and all of the great neighborhood vibe that goes around – even like Lakeshore East or some of the stuff along the West Loop – you've got to think about how you bring a different energy to the building that you have. And it's not always going to be putting condos on the upper floors. That's not going to be the answer. It's going to be stuff that starts at the street level and works its way through. But this city will help with that. The city will actually respond to that. It's showing it in buildings already. And so I think that owners of other office buildings trying to figure out what to do need to look at those successes and figure out how they can implement similar changes to their properties and the city will respond.
Spencer Levy
Well, one of our clients, a German group called Commerzbank, owns a building called 125 South Clark in Chicago that has a beautiful food court on its first floor – and food court’s probably the wrong way to put it.
Collette English Dixon
It’s a food hall.
Spencer Levy
Food hall. Thank you very much.
Collette English Dixon
They’re called food halls now. Food courts are that old thing that you did in a shopping mall.
Spencer Levy
Exactly, exactly. The food hall. But it's super awesome. And 125 South Clark is probably –
Collette English Dixon
Revival.
Spencer Levy
– an 80 or 90 year old building. Right? So it can be done within the four walls. But I like the word you used, which is corridor, because it's not just your building. So Lisa, what are your clients saying about the top amenities that are necessary drivers and those that might be overrated, right?
Lisa Konieczka
You know, amenities really do rule today when it comes to making decisions. That's going to be certainly the competitive advantage that most of the landlords are going to have. And it really doesn't matter how old your building is, it can be brand new. It could be the Old Post Office, which is a really, really old building, but has got a ton of amenities, just like 125 South Clark also having a lot of great amenities. And I think that, you know, Chicago led the way with this. We've been doing this for a long time and we've really just had to step up our game, the amenities that are leading the charge. Shockingly, considering we're in the middle of winter in Chicago is outdoor space. Private outdoor space is really still considered to be a very important element. There are a lot of really creative amenities that we're seeing some landlords come forward with, certainly co-working and having some level of flexibility as an element of the amenities offered within the building. Obviously not for free. Those are certainly something you have to pay for. But certainly having that ability to flex within your building on an interim basis is important. I think there are other things that are focused around wellness. Even in the fitness centers and some of the newest buildings that are being built. As Collette English Dixon was mentioning in the west edges of the loop, their fitness centers have got wellness centers. They might have urgent care facilities, they've got meditation rooms, they have a variety of different resources that are provided. And again, I would go back to this idea of magnetizing in the office. Beyond just the value of coming and collaborating with your colleagues, you want to make sure that employees’ efforts coming into the office are met with a lot of different resources that they can use, and that's going to help to basically work that into the habit of them coming back in and collaborating more.
Collette English Dixon
You know, actually, I'm thinking that one of the things that has not really been talked about that is an opportunity for employers and building owners to think about is trying to address some of the outflows or outcomes of the pandemic on, kind of, family engagement. Right. So is this an opportunity for wellness centers to incorporate the concept of a little child care? A lot of the stresses that are being felt by people being asked to go back to the office is how to deal with their children. And that kind of truly holistic engagement may be a game-changer for some companies that may find an opportunity in their corporate headquarters to provide that service or office buildings who are willing to create those relationships that can provide that service to their tenants.
Lisa Konieczka
I'm going to add another piece to this, which may sound funny, but I think is really serious is – as somebody who is is T-minus three days from picking up a brand new eight-week old golden retriever puppy – everybody got COVID pets, right?
Collette English Dixon
Yep.
Lisa Konieczka
That is going to be a barrier to people coming back there. Like, I've got a dog at home. I can't leave that dog or I can only be in for a little while. So I think addressing pets. I know it sounds crazy, but I really do think that that's going to be another piece of the picture.
Spencer Levy
Well, my dog Murphy, a bearded collie who is under my desk as I am doing this interview right now, agrees with you.
Lisa Konieczka
Absolutely.
Spencer Levy
But it does bring up a question regarding labor now that is absolutely positively one of the great drivers of Chicago. So talk to me about the labor availability in Chicago – how that’s a positive or maybe a challenge?
Collette English Dixon
Well, I think that historically, as we talk about the growth or the availability of talent in Chicago, we always talk about that attraction from the college side. We have an incredibly well educated population here, but we also have the reality of a very large service industry: hospitality, tourism, grocery stores are your neighborhood, dry cleaner, all of that. They're under an incredible amount of pressure. And I think the challenge that we're going to face is how to provide them with the sort of living wage and the sort of occupational opportunity that meets their capabilities and their goals, but also provides the resource that employers need. We always talk about how many people are coming in Chicago. We always talk about the type of jobs that are available. For example, in December, there was like a four percent change in job postings for computer and mathematical occupations. What does that tell you? Those are college focused sort of roles. And the people who we’re really struggling with right now are those who may not be fitting those roles. They're in more service and labor intensive spaces. We are going to have a challenge trying to figure out how to make this work post-pandemic between health issues and how much wage is needed for a living wage in this city. Chicago is getting increasingly expensive. Affordable housing becomes an issue in the city. Transportation for people getting from communities that may be dominated by employees in the service industry, they need to be able to get to jobs. We need to work on transportation and infrastructure resources for them. There’s a lot that has to be improved upon, but yet it's not for lack of people. And it's not for lack of probably opportunity. We've got to figure out how to match these up better, and how we can actually bridge the gaps that have been exacerbated by the outcome of the pandemic. We've got to figure out how to make all these pieces fit for a truly equitable work environment and for a stronger and resilient labor pool.
Spencer Levy
Well, the subject of affordable housing has been discussed at some length on this show. The one subject we haven't talked about enough, but I think does touch on what you were saying, Collette is infrastructure. It's one thing to have a service need. It’s another thing for these service providers to be able to get there fast, efficiently, consistently. And Chicago, by the way, though their subway system might be old. It's irreplaceable. But I think it is a competitive advantage of Chicago that you have so many trains, even if they are imperfect and getting people from place to place B,
Collette English Dixon
It's a great resource for us to have. But you know, our Red Line stops five miles short of the end of the city. I mean, there is a huge band of the city that is not well accessed to that. And I think there's a lot of opportunity there. But yes, it is a phenomenal system when it works and it works well.
Spencer Levy
And you should know that every time I fly into O'Hare, I take the train into the city because it is much faster than taking a car service.
Lisa Konieczka
It is. The Blue Line is much better.
Collette English Dixon
And it only cost $2.50.
Lisa Konieczka
Yeah, and I'll add, one other piece to that is, you know, if you look at through the office occupier trends that have happened even over the last, say, five to 10 years, you've seen this major theme around suburban to downtown migration. And you look at, well, why is that happening? And certainly most of that is driven by – because it's more expensive downtown than it is in the suburbs, right? – so most of that is driven by a need to access the talent and the labor. And so if you look at it, it's not just our public transportation system, it's actually also the hub and spoke model of our highway systems, right? So if you sit in the city, you have access to the full breadth of all of the Chicagoland area talent versus being maybe having it where you've only got one side or on one side of the river or the other side of the river. So I think you combine all of those pieces and you look at the migration, and it certainly has proven that it has been useful and continues to be useful for a lot of companies to be occupying space downtown and attracting that talent.
Spencer Levy
Well, let's talk a little bit more about the industrial diversity of Chicago, and some of them are well known in the entertainment sector. You have several professional sports teams there. And you have a great downtown theater district, even if the Bears were to relocate out of town. You also have life sciences and a lot of venture capital. Tell us about some of the diversity of industries and how they're helping drive growth.
Lisa Konieczka
You know, that's the kind of the foundational element of Chicago is we have such a diversified economy talking a lot about what Collette said earlier. We have everything from a broad range of services sector as well as the office sector and the industrial side. On the entertainment side, I think Chicago continues and some of that is probably being driven more at the television level right now than it is as much at the movie level. We've got our famous movies, right? You got Ferris Bueller's Day Off. We've got Home Alone. We've got The Blues Brothers, all of those. But we've got, you know, Chicago Med, PD and Fire that are all being filmed on a weekly basis in Chicago. We all know that as Chicagoans, because we're constantly zig-zagging around all the different sets that are being filmed. Chicago doesn't have a lack of land, nor do we have a lack of buildings that can be converted into something that will adapt to new industry. But I think probably the life sciences is one of the most exciting areas of focus right now for Chicago. And it's interesting that it is sort of running hat in hand with a couple of our – Whoops! Well, there's the dog. Sadie, come here! Come here!
Collette English Dixon
You know, it's either like you can be on video and have your kid walk in in the middle of a major meeting. Or you can have your dog bark or your cat walk across the screen. There's always something going on
Lisa Konieczka
During a podcast. OK! So if you look at the life sciences sector and really where our growth is, what I find interesting is that that focus is on some of the new expanding neighborhoods that we were just talking about earlier. So whether that's Fulton Market or you look at Lincoln Yards, likewise, new area that's looking to do the same type of development or you look at the Illinois Medical istrict in some of those areas where there is certainly some support, it's not in the central business district, it's actually actually in these new neighborhoods where we see growth and what we believe is with such a great base of the north side – up near Lake Forest, where a lot of our large companies like Abbott and Baxter are housed – that we see this opportunity for a life sciences growth in Chicago, and we see these new neighborhoods as really being where that focus is,
Spencer Levy
Let's now talk about some of the doubters. There are doubters about Chicago. In fact, on last week's show, we had one of our guests, James Shevlin, the President and COO of CW Capital, say the following:
James Shevlin
"I'm very concerned about Chicago, where you've got older buildings, very expensive to improve that space and very large block space that has to be subdivided. Almost, it doesn't make economic sense on some of those buildings."
Spencer Levy
Collette, what do you say?
Collette English Dixon
I say it takes imagination. The city has – because it's an old city – it has a lot of very large, very old office buildings, which will take creativity and take capital to modify their use or renew their use. Take, for example, the redevelopment of the Post Office. The Old Post Office is a multi-million square foot property that sat totally vacant for 20-plus years. And what it took was a combination of time, space, imagination and guts. And 601W with the team that they assembled have pulled off what I think is the poster child for how you can re-imagine large older properties in a city like Chicago. If you recognize the demand that you're looking for, if you are open to the creative, multi-use benefits of having corporate offices along with amenity space, along with private party space and outdoor rooftops and all those things that business is demanding, you can get the sort of return and the sort of response that you need. And I think one of the buildings that everybody's talking about now is 135 South LaSalle, which was the one that had been the LaSalle Bank building, and it became the B of A building until B of A decided to build a shiny new headquarters in the West Loop. That building is massive. It's stunning. It's a historically landmark building, but it will be a creative redeveloper who finds a way to create value in that space once again, and they will be responded to.
Lisa Konieczka
You know what? We've talked a lot about our labor, our talent, the base of employees available to occupiers in Chicago still ends up being what leads the day. I've had the opportunity to represent several new companies that moved to Chicago over the last 18 to 24 months, and each one of those was driven first and foremost by labor. Secondarily, it was also driven by just the pure set that's available in Chicago. Chicago's a big city, but it's got a level of affordability to it. It's got a level of approachability to it. And I will say you can't forget Chicago's also in the middle of the country. So we are equally accessible to all parts of the United States, and that becomes a pretty big driver. We've got a huge airport, we've got all this accessibility. So when I look at a lot of my clients are in that professional services ranks where they have employees flying all over the country. And admittedly, that hasn't been happening as much over the last 18 to 24 months. But still, that value is really, really important.
Collette English Dixon
I just want to just note, I mean, just to put some real data on the table. I mean, in 2021, there were a hundred and seventy two companies that made a pro-Chicago decision. And that is seventy two new ones and 100 expansions. I think that says a lot. And I mean, our crime issue didn't just roll up in December. I mean, it's been an issue on the table for a long time. And we're also one of the lowest unemployment rates of our top competitive cities. And that's because people want to be here and people want to work. And that is a really important part of that puzzle that I just don't want us to lose face of.
Spencer Levy
Well, I think you take all of that and the relative affordability from a living and a cost of labor standpoint. And you compare that to some of our other great cities in America, in particular, San Francisco and New York, and it isn't close. There is just a lot to be said about Chicago. And that's before we coax Mike Ditka back to coach the Bears. But those are a lot of things that are beyond the scope of today's conversation,
Collette English Dixon
Especially Mike Ditka.
Lisa Konieczka
Yeah, yeah.
Spencer Levy
One of the things I wanted to mention to both you and Lisa, Collette, is you are two leaders, female leaders in the industry. Lisa, you run our women's network. Collette, you used to be the president of CREW. You're now the head of a big university. A lot of our listeners out there would just love to know your perspective. How do we get more women and minorities into our business? So Collette, maybe we'll start with you and then, Lisa, I'd like your perspective.
Collette English Dixon
Wow. You know, this has been the discussion for decades at this point. Right. And I think it's all about intentionality of this industry to provide both awareness and access to opportunities. Running this real estate institute at Roosevelt – Roosevelt is a very diverse urban city focused and a history of social justice and social equity – one of the things that I look at is the lack of awareness of this industry among virtually everybody else. We have a very interesting demographic that dominates this industry, and it's because it's driven by money. And when you don't have access to that capital, it's definitely a barrier. So we as an industry need to look at intentionally creating an outreach to young people so they know what the opportunities are and then help them find access to prepare for those opportunities. And then once they are prepared for them, to help them be successful by not just bringing them in the door and having them flounder, but to recognize that this diversity will require intentional engagement on an ongoing basis for people of color, women, people from other diverse engagements so they can find a place in this industry and be successful. And I just marvel at the challenges we seem to have with that model because it doesn't seem to be that hard to me. And it doesn't seem like it's rocket science to figure that out – because oh, by the way, this is not a rocket science industry – that we have not been able to do better when we've been talking about diversity in this industry for my entire career.
Spencer Levy
Lisa, what do you think?
Lisa Konieczka
No, I agree. I think that it starts with this core fundamental of diversity of thought leads to brilliant ideas. Right? So if you don't have a diverse group of people around the table, how will you ever get to those brilliant ideas? And so when I think about it, I appreciate everything Collette said because that really starts the conversation about how to get people into the industry. But I think there's this other piece that is so important is that we've spent so much time over the length of my career and the almost 22 years I've been running the women's network at Seabee, just trying to get a woman into a role. A diverse person into a role. And time and time again, I think the studies prove that it is very difficult for a person to be successful as the only diverse person at the table.
Collette English Dixon
Absolutely.
Lisa Konieczka
You need a group of people at the table that you need a group of diverse people at the table. And I'll look at CBRE as a great example of that. You know, at the beginning, we were getting a woman into a role and it was so hard for her to really achieve and succeed in that role, whether it was a stretch role or not. But once we got a few women and a few diverse people around the table, it was just absolute, sort of, perfect movement forward because there was enough support for there to be success. So I look at it as two ways. One is, I know we have to walk before we run, which means we have to get people into those roles. But then we have to move. It's not just a check the box. This is about getting amazing talent and diverse thought to get to those brilliant ideas. And that means a lot of people with a lot of diverse backgrounds are really important. So I know for CBRE, our focus is really developing our women, increasing their networks and increasing their profile. Because the key is you've got to know who's on the bench. And unfortunately, leaders not all the time at many companies think about their bench as diversely as they should. So if we can get more diversity on the bench where you get more people into those roles and then move the ball forward
Spencer Levy
Agreed with all that. And we have a long, long way to go. But I think that if there is any silver lining to the terrible COVID crisis we've gone through and some of the social unrest we saw in the summer of 2020, I think that this has now move way up on the agenda, that people are really focused on it and hopefully that will show up with tangible results for people on all different levels within our business.
Lisa Konieczka
Spencer, I must add one thing to that, though, is I will say that, you know, the pandemic is said in some studies to have set back the gender equality movement by 20 years. Two years sets it back by 20 years because so many women had to make decisions about their families. It's the same deal whether it's about a diverse candidate or about a woman. The focus is there, but the issue got bigger during the last twenty four months, so that's the part we really have to focus on as well.
Collette English Dixon
I agree. Absolutely important.
Spencer Levy
Well, Collette and Lisa, let's fast forward three or four years in Chicago. Looking back. What are we going to see? What do you think is going to be the changes to Chicago positive or negative in the next three to four years, Collette?
Collette English Dixon
Oh, wow. I mean, I could get into all sorts of things. I think we'll have a different mayor. I don't know that that's a popular comment, but I do think that's very likely. I can't envision who that's going to be, but I do think that is likely to be the case. And with that will come a whole different level of expectations and probably disappointments on how you can actually move the needle on some of our more challenging issues. But I think we will find that the CBD will begin to evolve from its historical, very office-focused engagement to being something much more diverse in how our various corridors are engaged with different industries, different uses. And I think that will give a different vitality as a rebound from what we currently see as a very, very quiet CBD as we're kind of getting through the pandemic. I think we'll see some great successes from the expansion of O'Hare. I think we'll start to feel some of the benefits of the other infrastructure investment that has been pledged as a result of the Build Better bill that has delivered a significant amount of money to the city. I think what we will benefit from there will be wonderful. But I think we're still going to be struggling with some of the issues around economic inequity in our neighborhoods. These are not easy fixes because they didn't happen quickly. They won't be changed quickly. But what I hope we'll see is a continued determined effort to right those issues and find pathways to enhance the quality of life, education and economic viability of our neighborhoods, which will contribute to the strength and the vitality of our city as a whole. That's my vision.And probably three to four, maybe five years out, but that's what I hope we'll see.
Lisa Konieczka
I agree with what Collette said around what I hope for our city as a whole. So maybe I'll spend a little time focused on what I hope for on the real estate side of things for Chicago. I see that there will be continued growth in Fulton Market, but I think that at least one of these other neighborhoods, whether it be Lincoln Yards or the 78, is going to take off. Some part of it is going to start to go in the next, let's say, five years knowing it takes 24 to 36 months to build a building in Chicago. And I think that it's going to be driven by the pendulum kind of swinging back, right? The pendulum of how you work has swung all the way to the edge, right? Everybody wants to work from home. Everybody's comfortable being in a remote environment. And I do believe that as the pandemic becomes endemic or starts to recede from being in crisis that pendulum is going to swing bac. And then what's going to happen is this is going to be a focus, though, on making opportunities for occupancy proximate to where people live so that it makes it part of their life versus a place that they go. And so I do believe that we will see some additional development start to expand further out. What happens within the more central business district? I think I'll borrow Collette's word. It really boils down to creativity. I give 601W a lot of credit for what they were able to envision, along with the Telos organization at the Post Office. They hit it out of the park and I think it's a great example of what can continue to happen. I think 125 South Clark is another great example of taking an old asset and completely revisiting it. So I think that that's going to take a little more time because you got to pull the creativity together and then do all the work, so that may take three or four or five years. But I think that's going to be probably the next step after that.
Spencer Levy
So on behalf of The Weekly Take, I first want to thank Collette English Dickson, executive director of the Marshall Bennett Institute of Real Estate at Roosevelt University, and I'm proud to say a longtime friend of mine, former president of CREW, just one of the great leaders of our industry. Collette, thanks for joining us.
Collette English Dixon
Thanks, Spencer. It's been a blast.
Spencer Levy
And then I want to thank another great friend of mine, Lisa Konieczka, one of the leading leasing experts in Chicago and beyond the head of CBRE Women's Network for so many years. And just a terrific professional and expert on the Chicago market. Lisa, thank you so much for joining the show.
Lisa Konieczka
Thank you so much for having me. It's really been so much fun to see you guys and talk to you today.
Spencer Levy
Thanks again to our guests – to Lisa's dog, Sadie as well – and to you, of course, for taking part in our tour of Chicago. For more, visit our website CBRE.com/TheWeeklyTake. In the weeks to come, we'll explore other cities and markets, including an episode on Dallas that we've got in the works. And in the spirit of the Super Bowl coming up in a matter of weeks, we'll be talking football and commercial real estate with the chief of staff of the L.A. Chargers. As we get set for the kickoff of those programs and more. We hope you'll share this one as well as subscribe, rate and review us wherever you listen. Thanks again for joining us. I'm Spencer Levy. Be smart. Be safe. Be well.
Guests
Collete English Dixon
Executive Director, Marshall Bennett Institute for Real Estate, Roosevelt University
Collete English Dixon is the Executive Director of the Marshall Bennett Institute for Real Estate at Roosevelt University, a private higher education institution located in Chicago. In addition to helping to develop the next generation of real estate talent, she serves on a number of boards for real estate companies and has decades of experience executing real estate transactions including a leadership role at PGIM Real Estate.
Lisa Konieczka
Executive Vice President
Lisa Konieczka focuses on the delivery of transaction based real estate services to corporate clients across the globe. She employs a strategic planning approach towards real estate service delivery, with a focus on KPIs, occupancy strategies and flexibility challenges associated with growth and change. Lisa is also the founder and chair of CBRE’s Women’s Network and a member of CBRE’s Diversity Council.
Host
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Spencer Levy
Global Client Strategist & Senior Economic Advisor, CBRE
Spencer Levy is Global Client Strategist and Senior Economic Advisor for CBRE, the largest commercial real estate services firm in the world. In this role, he focuses on client engagement and public-facing activities, including thought leadership work performed in conjunction with CBRE Research. He also serves as Co-Chair of the Real Estate Roundtable’s Research Committee.