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By Thomas Strand ’17
Bringing warm weather and high spirits with them, the Columbia Business School (“CBS”) Real Estate Association (“REA”) traveled to Chicago from November 1st to 3rd to learn about the current investment landscape in the country’s 3rd largest city. They were joined by representatives from the Paul Milstein Center for Real Estate for a two-and-a-half day trek around The Loop and River North.
Those who arrived early on Sunday were treated to an afternoon tour of Millennium Park and Maggie Daley Park. Neal Speers, General Manager of Millennium Park, was kind enough to take some time out of his Sunday afternoon to guide the excursion. Though imperceptible while touring its grounds, Millennium Park actually sits atop a parking garage and commuter rail, making it the world’s largest rooftop garden. Originally intended to celebrate the second millennium, the park was unveiled (right on time, quipped Mr. Speers) in July 2004.
The tour kicked off at the Jay Pritzker Pavilion, the park’s outdoor performing arts venue, equipped with an incredibly elaborate sound system designed to replicate an indoor concert hall experience. From there the group continued its exploration of the park, visiting Cloud Gate, affectionately referred to as “The Bean;” the Crown Fountain, a video sculpture that depicts 1,000 diverse faces; and the beautiful Lurie Garden. Mr. Speers then led the group across the BP Bridge, from the art and culture-focused Millennium Park to its more fun-oriented counterpart, Maggie Daley Park. Equipped with a skating ribbon (roller- in the summer, ice- in the winter), rock-climbing walls, playgrounds and more, Maggie Daley Park provides the perfect place for a full day of family fun.
Next up was a brief tour of the REA’s two-night residence, the Sheraton Chicago Hotel & Towers. Jenny Delatorre, a Meeting & Event Manager at the Sheraton, welcomed everyone to the hotel with a big smile and a Chicago staple, Garrett’s Popcorn. While guiding the group through the vast hotel, Ms. Delatorre explained that the Sheraton is the only hotel in the city with direct Riverwalk access, making it the perfect warm-weather event venue. The Sheraton also boasts a football field-sized ballroom, perfect for large trade shows and conferences.
Monday’s excursion began bright and early, with a visit to CBRE’s North Clark Street office to experience their new Workplace360 initiative in action. The goal of the initiative is to create an efficient workplace that supports both focused work and collaboration. Embracing the new mobile age, Workplace360 offices are equipped with state-of-the-art technologies that allow employees to work anywhere. While leading a tour of the office, Tina Lamkey, Jamie Georgas and Neil Pendleton of CBRE discussed the success of the implementation, with office utilization increasing as employees embrace the transition from “me space” to “we space.” CBRE is providing clients a glimpse into the future of modern workspace by living it themselves.
After the office tour, Cody Hundertmark and Dennis McGann, from CBRE’s investment sales team, gave an overview of the commercial real estate market in Chicago. As in most major metropolitan areas in the U.S., Chicago has experienced the millennial migration downtown. Residential urbanization has driven many companies to move their headquarters from suburban campuses to prime downtown locations, including the recent moves by Kraft and ConAgra. Additionally, growth in the tech industry, has further driven higher demand for downtown real estate.
The next stop on the tour was a trip to Equity Group’s West Loop office. In what one student described as a true “why CBS” moment, the group had the unbelievable pleasure to meet with Sam Zell, the founder and chairman of Equity Group Investments and a giant in the real estate industry. Mr. Zell treated the group to an overview of his lifetime as an investor in real estate, before welcoming Q&A. From building a property management company while just an undergrad at Michigan, to overseeing billions of dollars of real estate investments across a multitude of property types and geographies, Mr. Zell has attributed much of his success favoring the “opposite of conventional wisdom.” Mr. Zell discussed his outlook on the current real estate market and then opened the discussion up to questions. It was quite a unique and exciting opportunity for the REA to be able to ask questions of Sam Zell, in an intimate setting.
The group also had the opportunity to meet the CEOs of Equity Lifestyle Properties, Equity International, and Equity Commonwealth, and the CFO of Equity Residential. First up was CEO Marguerite Nader from Equity Lifestyle Properties (“ELS”). This publicly-traded REIT owns nearly 400 manufactured home communities and RV resorts across the (primarily coastal) U.S. and British Columbia. Next, Mark Parrell, CFO of Equity Residential (“EQR”), discussed trends in the multi-family residential market in the U.S., and offered some of the rationale behind EQR’s recent $5.4 billion apartment portfolio sale to Starwood Capital Group. Tom Heneghan, CEO of Equity International (“EI”), followed Mr. Parrell, to discuss the company’s international investment outlook. The visit with the Equity Group was capped off by a Q&A session with David Helfand, CEO of the newly-controlled Equity Commonwealth (“EQC”), a publicly traded office REIT.
Monday’s company visits ended with a tour of General Growth Properties (“GGP”)’s Water Tower Place, a mixed use property in Magnificent Mile. The property includes an upscale vertical mall on the first eight floors, with a Ritz Carlton hotel and luxury condominiums above. Prior to touring the property, GGP had a panel of professionals discuss recent retail and mall trends. After the panel, the group toured the class A mall and even did some shopping, before heading to the CBS Alumni and Student Networking Reception.
The reception at the Vertigo Sky Lounge in the Dana Hotel, which was hosted by the CBS Alumni Club of Chicago, was a great opportunity to unwind after a long, exciting day and meet some of the many talented CBS alumni that call Chicago home. The event, held at a trendy rooftop bar on a beautiful fall evening, had a strong turnout and was a great success.
The final day of the trek commenced with breakfast and a lively discussion with employees of Ventas, one of the largest U.S. healthcare REITs. Present for the discussion were the CIO, John Cobb; VP of Construction and Development, Doug Johnson; Director of Asset Management, Kelly Meissner; Manager of Acquisitions, Mike Russell; EVP of Asset Management, Lillibridge Healthcare Services, Jim Mendelson; and Direct of Talent Acquisition, Lara Gartner. The team gave a wonderful overview of the company and its portfolio.
The next stop on the trek was LaSalle Investment Management’s brand new office at 333 N. Wacker Street. Having only moved in the day before the group’s visit, the LaSalle team was still gracious enough to welcome the students into their new, open-concept workspace. In addition to Wade Judge, CIO Americas, and Alfreda Delle, Vice President, both of LaSalle Investment Management, Bruce Miller, a Managing Director at Jones Lang LaSalle (“JLL”), joined the meeting. It was very interesting to hear both buy-side and sell-side perspectives on the Chicago commercial real estate market in the same discussion. Afterwards, Mr. Miller gave a tour around the office space with spectacular views of Chicago.
Before heading to the final stop on the trek, the group hopped aboard Chicago’s First Lady Cruise ship for the Chicago Architecture Foundation’s river boat tour. With beautiful weather once again, the tour was extremely relaxing, very enlightening and provided a unique view of the REA’s final site visit of the trip – Hines’ River Point office development. The final meeting started with a presentation from Laura Hines and David Bach of Hines on the River Point development expected to be completed in late-2016. With the sun setting behind the half-completed building, the group donned hard-hats, vests and goggles, crammed into a construction elevator and ascended to the 20th floor of the active development site. The views from the site were unbelievable, with fantastic riverfront views on the east side nearly rivaled by the beautiful sunset on the west side. It was the perfect end to another successful REA trek.
The REA would like to thank the Paul Milstein Center for Real Estate (“PMC”) and CBS Career Management Center (“CMC”) for their support, with special thanks to Executive in Residence Leanne Lachman, Professor Lynne B. Sagalyn, and the student organizers Charles Griffith ’16, Cheryl Kong ’16, Joe Noon ’17, Durrell Mack ’17, Brian Hwang ’17, Eric Liang ’17, and Nikhil Chaudhri ’16.
Additionally, special thanks to the following alumni and supporters for their help in making this trek possible: Mr. John Vickers ’85, Mr. Howard Milstein, Mr. David Neithercut ’82, Mr. Michael Berman ’86, Mr. Tommy Craig ’82, and Mr. Zoran Lazarevic ’00. Thank you for contributing your time, expertise, and resources, and for helping to make this such a good trek.
2015 Chicago Trek Photo Slideshow
(Trek Photographer: Aradhna Taneja ’16)
Thomas Strand ’17 is a first-year student and member of the Real Estate Association at Columbia Business School. Tom is focusing on real estate investment and development at CBS. He previously worked for net-lease REIT W. P. Carey in Corporate Finance and Capital Markets in New York.