At Lake County Partners’ quarterly roundup, real estate experts discussed the future of the market. The panel featured Heidi Smithson of First Midwest Bank, Brett Kroner of Cushman & Wakefield, James Otto of CBRE, and Gordon Lamphere of Van Vlissingen and Co.
The discussion, led by Heidi Smithson, revolved primarily around understanding the commercial real estate market’s current state and positioning for strategic growth.
What Did We Learn?
The suburban office market is struggling but has a lot of growth potential post-pandemic. The panelists expect to see the removal of older, more functionally obsolete office space. Conversely, experts expect to see the model of offices evolve to meet changing corporate demands. Businesses are specifically demanding changes relating to the traditional commute and based around an evolving corporate model.
The Industrial Market Is Booming
Pushed by e-commerce and biomedical expansion, the industrial sector of Lake County is growing at a rapid pace. As a result, we see industrial real estate fight to supply growing demand as the vacancy rates continue to dip. Although there was some disagreement between panelists around what sectors of the market long-term growth will come from, overall, the industrial market will continue to be a bright spot.
Too Soon To Tell For Hospitality
Future consumer and business spending habits will define the hospitality industry. However, at this point, it is too difficult to predict the real estate future of the hospitality industry reliably.
Real Estate Experts See Big Change Ahead
Over the past few decades, the allocation of sales tax receipts has strongly incentivized municipalities to zone land for retail development. As a result, Lake County has both over planned and developed in the retail sector. In the post-Covid-19 world, the impact of the over-development has been exacerbated.
Still, there is a lot of hope! Redevelopment of retail will provide an opportunity to readjust to the changing needs of the post-Covid-19 world. Moreover, Lake County is blessed to be in a strong position to adjust to changes required to meet future demand.
Covid-19 has accelerated dramatically many societal trends, particularly the shift away from traditional retail to e-commerce. As a consequence, we will need to work to re-plan and repurpose many current and proposed Lake County retail sites.
Growth Will Reshape The Suburbs
Growth in the residential market in Lake County will continue to drive more of the labor market into the Chicago suburbs. As the labor often drives corporate growth, expect to again see businesses chase the suburbs’ expanding talent pool into Lake County.
