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Gail Lissner - 2017 Market Outlook

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Gail's slides from her presentation.

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Gail Lissner - 2017 Market Outlook

  1. 1. #CAROutreach SPEAKER GAIL LISSNER, CRE, SRA Vice President of Appraisal Research Counselors
  2. 2. www.AppraisalResearch.com ARC Appraisal Research Counselors Gail Lissner, CRE, SRA 312 565 3423 glissner@appraisalresearch.com Appraisal Research Counselors 400 East Randolph, Suite 715 Chicago, IL 60601 Downtown Chicago Market Update...
  3. 3. www.AppraisalResearch.com ARC Appraisal Research Counselors 50.0 52.0 54.0 56.0 58.0 60.0 62.0 64.0 66.0 68.0 70.0 72.0 74.0 1989 1991 1993 1995 1997 1999 2001 2003 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 Chicago National Chicago Homeownership Trends… Chicago MSA 3Q16 – 65.1% HUD changes agency targets for affordable
  4. 4. www.AppraisalResearch.com ARC Appraisal Research Counselors Downtown New Unit Deliveries…
  5. 5. www.AppraisalResearch.com ARC Appraisal Research Counselors DT Rental Vs. Condo Deliveries…. 100%100%100% 39% 0% 49% 13% 0% 21% 24% 0% 22% 24% 10% 23% 23% 8% 32% 28% 84% 100%100% 94% 96% 93% 97% 94% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 proj 2017 proj Rental Unit Deliveries - % of Total Deliveries 1990-2017 proj. (c) 2016 Appraisal Research Counselors, AllRightsReserved 2011-2017: Rental units has comprised 93-100% of the total deliveries!
  6. 6. www.AppraisalResearch.com ARC Appraisal Research Counselors Neighborhood Apt Development… 11,500+ Units Proposed/Under Construction
  7. 7. www.AppraisalResearch.com ARC Appraisal Research Counselors Milwaukee Ave. Corridor – Prop/UC… $3.00 PSF: developers’ target
  8. 8. www.AppraisalResearch.com ARC Appraisal Research Counselors The Downtown Rental Pipeline… Green = In Lease Up Red = Under Construction
  9. 9. www.AppraisalResearch.com ARC Appraisal Research Counselors DT Condo/TH New Development Net Contracts…
  10. 10. www.AppraisalResearch.com ARC Appraisal Research Counselors DT Condo Unsold Developer Inventory… 0 1,000 2,000 3,000 4,000 5,000 6,000 (c) 2016 Appraisal Research Counselors, All Rights Reserved Gold Coast Loop Near North River North Streeterville South Loop West Loop
  11. 11. www.AppraisalResearch.com ARC Appraisal Research Counselors DT Condo/TH Unsold Developer Inventory…
  12. 12. www.AppraisalResearch.com ARC Appraisal Research Counselors DT Condo/TH Unsold Developer Inventory… 76% over $700+ PSF
  13. 13. www.AppraisalResearch.com ARC Appraisal Research Counselors DT Condo/TH Unsold Developer Inventory… 19% 6% 26% 44% 5% Units in the West Loop Units in the South Loop Units in River North Units in the Loop Units in the Gold Coast
  14. 14. www.AppraisalResearch.com ARC Appraisal Research Counselors 96 DT Buildings 17,000 Units Price Changes… $200 $300 $400 $500 $600 $700 $800 $900 $1,000 2007 2008 2009 2010 2011 1/2 2012 3/4 2012 1/2 2013 3/4 2013 1/2 2014 3/4 2014 1/2 2015 3/4 2015 1/2 2016 Sales Price PSF Trends in Buildings Developed Since 2004 (c) 2016 Appraisal Research Counselors, All RightsReserved Gold Coast Loop Near North River North Streeterville South Loop West Loop
  15. 15. www.AppraisalResearch.com ARC Appraisal Research Counselors 2004+ Deliveries – Sales PSF Since 2007…
  16. 16. www.AppraisalResearch.com ARC Appraisal Research Counselors Downtown Condo Price Trends…
  17. 17. www.AppraisalResearch.com ARC Appraisal Research Counselors Condo De-conversions… 835 W. Barry 115 condo units Avg 895 SF Being mkted by CBRE 2625 N. Clark 133 condo units Sold for conversion to rental 2518-40 N. Lincoln 30 res. condo units/ New rental building under construction with 200 apts
  18. 18. www.AppraisalResearch.com ARC Appraisal Research Counselors Rental development slowing due to  Short term imbalance in supply and demand  Rising interest rates  Construction costs escalating  Rent growth slowing – renewals  Real estate taxes increasing  Land sellers in denial  ARO adding cost to development Modest increase in condo development  Greater diversity in product type  Gradually increasing project sizes  Continued development in neighborhoods 2017 Trends…

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