In a year filled with economic and political uncertainty, a number of starts and stops even for space within our own portfolio, and the eventual emergence of retail as the sweetheart product type, there are a handful of observations that I thought would be helpful to explore heading into 2025.
The Who: How the Players are Evolving
Those of us who have been in the real estate industry for many years are familiar with the various critical participants in every transaction – the owner/seller and the user/buyer and typically the brokers representing each of those parties. In the fall, the US Government and the State of IL increased requirements for real estate licensees that leave most of us scratching our heads and wondering what exactly were supposed to do. Two areas that we’re all trying to understand how to handle are 1) requirement for signed representation agreements prior to showing any property whatsoever, and 2) commission transparency related to cooperative commissions. It is expected the formalization of the agreements between the parties will benefit clients but creating new processes is something each company has to figure out.
Speaking of the player evolution, in the time period during and after the COVID-19 pan-demic, new firms emerged within the Chicago retail market and brokers switched companies. Colleagues have been moving around within the industry, and it’s likely going to continue. According to the WSJ on 12/3/2024, “more
Americans are looking to switch jobs than at any point in the past decade.” Finding the right player gets harder when professionals have limited longevity in their roles.
Retail is evolving too. Entertainment retail, including family destinations and dedicated single-purpose sports facilities for cricket, pickleball, and others, has had a lot of media attention. Are we oversaturated? I don’t know. Landlords are quick to capitalize on hot con-cepts, but it still feels like service, food and traditional fitness remain the most active tenants in the market. Amenities are also evolving, as we are incorporating EV stations at our shopping centers to increase appeal to retailers and shoppers alike.