Curt Bailey's State of the Market

Related Midwest president Curt Bailey remembers 1990 because that's when he began his career, during a downturn almost as bad as ’09. His takeaways: see both sides of the coin, and have continued skepticism. Those guide the firm’s projects in this full-throttle multifamily climate.

The best part of downtown Chicago’s resurgence as a place people want to live is that it’s not limited to one demographic (like bros from Big Ten schools), Curt tells us. Increasing job opportunities in the urban core are bringing more companies and renters from around the country, who stay put and raise families, he says. (At Related’s 500 Lake Shore Dr, 40% of residents moved here from somewhere else for relatively high-paying jobs.) The market should stay cautious in terms of new supply, but you have to remember to factor in condos when comparing today’s absorption to historical numbers. (The same person buying a condo unit in 2006 is now a renter.)

Using those metrics and factoring in population growth, Curt's confident in the prospects for well-located, Class-A product like OneEleven, Related’s 504-unit ultra-luxury high-rise at 111 W Wacker Dr. (The OneEleven team, snapped in front of the building, above.) Pre-leasing already locked in 100 leases, and Related will deliver for first occupancy July 1. When Related took control of the former Waterview site, just 26 stories at the time, the industry thought it was crazy, Curt says. But a mixture of cautious optimism, strategic design, financial engineering, and lucky market tailwinds (River North’s renaissance, huge employment boons nearby like Motorola and ADM, the City’s work along the river, etc.) paved the way.

Over at 500-unit 500 Lake Shore Dr, Related just hit 99% occupancy after being open one year, thanks to a well-timed delivery and top-notch amenities. (On-site pet care service Dog City, above.) Related is always looking for new amenities that make living vertical easier, Curt tells us. At condo building The Grant in the South Loop, it transformed an underused business center into a kids playroom, something he expects to take off now that more families are staying in the city. The firm’s three-building, 500-unit South Loop Luxury by Related collection has 300 units sold in 14 months, and prices are already shooting up by 25% to 30%. (Making it hard to keep the developers, and eventually conversions, at bay.)

Here’s Curt with Related VP Nick Anderson. Related’s affordable housing business line is busy revitalizing developments like Lathrop Homes and Parkway Gardens. As much as they’d like some movement on the Spire site, Curt tells us Related is fairly uninvolved at this point, and it’s “wait and see.” (Either they are paid off, or they get the land.) Looking ahead, Curt expects Related to stay focused on high-end and affordable residential (with an eye on the West Loop), while also dipping a toe back into retail, where there’s been a dearth of development. When he takes off his hard hat for the day, Curt likes to go to the park with his four daughters, ages 9, 7, 5, and 1 as of last Friday.