There are always a million reasons not to do something.
Naysayers will say the real estate market is unpredictable, that higher taxes will lower the demand for real estate, and that people are leaving the city. Is there some truth to these statements? Sure, but there’s no need to overthink it. Now is the time to buy or lease commercial real estate in Chicago. Here’s why.
The Tax Hike is Overblown
By now, you’ve probably heard about the proposed $500 million property tax increase in Chicago. Of course, this will have an effect, but even with the rise in rates, Downtown Chicago will still have the 15th-lowest tax rate in Cook County. According to a report issued by the Civic Federation last year, Chicago even had the lowest effective residential rate in Cook County last year. Effective residential rate factors in property values, making it a much better way to compare property taxes by area.
Chicago is also one of the better major metro areas when looking at real estate costs per employee. The Windy City comes in at $5,234, while other major cities like Los Angeles ($6,172), New York ($12,362), Silicon Valley ($7,294), and San Francisco ($11,690) are much more expensive.
The Silicon Prairie
According to the 2015 Technology Office Outlook report from JLL, Chicago’s tech business brought in over $412 million venture capital and employed 104,869 workers last year. Experts maintain that Chicago has plenty of characteristics that will continue to foster start-ups in the coming years.
The reason why? Well, there are a few.
Simply put, there are a lot of places to go where rent is cheap. Incubators like 1871 and WeWork have become great short-term options for start-ups working on short projects, which in turn drives the rates down elsewhere.
Also, Chicago has become the “go-to” hub for Midwest millennials who are looking to move out and grab a job in the city. Young adults no longer want to commute from the suburbs to the city, they want to live in the city and work there at the same time. Companies have catered to this by opening up large office spaces and moving their headquarters to the region. Among these are Groupon, Grubhub, and more recently, ConAgra.
Chicago has plenty of room for growth, the market is trending in the right direction, and the tax hikes still place them near the bottom of the barrel when compared to surrounding areas and other major cities. Need we say more?