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Chicago and other big cities are in for a dramatic transformation in 2021 and beyond due to the black swan covid event. If we stop and think about our everyday life and how much the entire world was forced to change at once we can see that big cities like Chicago will require significant changes going forward. A few thoughts:
1. Remote work is here to stay and will de-couple workers from urban hubs like Chicago. Cities won't compete as much on jobs...COL, lifestyle, amenities and weather will play a much greater role in hometown choice as opposed to living close to work.
2. Chicago metra based on large hub and spoke model will contract as demand declines (due to remote work).
3. Demand on CTA and Metra will decline (due to remote work) and so will service frequency.
4. Many office buildings will either be converted to residential or left vacant (like old shopping malls).
5. Chicago and Illinois population will decline at a faster rate due to high taxes, topography and weather.
On the flip side there is a national housing shortage and Chicago metra could get ahead of this nationwide wave of people moving by promoting relatively low COL, existing affordable housing, livable city, amenities, schools, lakefront, etc. while working as quickly as possible to reduce crime and taxes. We could GROW our city by grabbing the people moving from San Fran and NYC instead of see it decline.
work from home which office workers (like me) can easily do from home - changed everything. so people can live far from work and not have to commute. This will save people anywhere from $60 - $300 a month commuting. And time. you can sleep longer. No crazy waiting out in the bad weather! That means office space wont be used and so rents will probably go down as buildings try to fill the now empty office space.
Another industry which will be affected is the hospitality business i.e. hotels, restaurants downtown that catered to office workers, travelers, convention goers, and the other businesses that profited from these types of customers.
if those close down, the wait staff and cooks, etc, wont be needed in those downtown restaurants and they will lose jobs.. so its a loss for many many people.
Since schools have been closed, there goes everything that has to do with that. no one going to the theaters, even downtown.
In my office, we have had it open for those who want to work, however, we do not use the copier, the printing, or anything that has been replaced with it being online. We dont have hardly anyone in the office so they will probably get rid of the current office space when our lease is up. We dont need coffee supplies, office supplies, paper supplies, etc because we are working from home. Nice for me but not good for our vendors. Also the restaurants in our buidling have been shut down, coz not enough business, they are suffering too. the train and bus (CTA and Metra in chicago) have lost revenue due to no commuters. There may be more, too.. but these are what comes to mind.
work from home which office workers (like me) can easily do from home - changed everything. so people can live far from work and not have to commute. This will save people anywhere from $60 - $300 a month commuting. And time. you can sleep longer. No crazy waiting out in the bad weather! That means office space wont be used and so rents will probably go down as buildings try to fill the now empty office space.
Another industry which will be affected is the hospitality business i.e. hotels, restaurants downtown that catered to office workers, travelers, convention goers, and the other businesses that profited from these types of customers.
if those close down, the wait staff and cooks, etc, wont be needed in those downtown restaurants and they will lose jobs.. so its a loss for many many people.
Since schools have been closed, there goes everything that has to do with that. no one going to the theaters, even downtown.
In my office, we have had it open for those who want to work, however, we do not use the copier, the printing, or anything that has been replaced with it being online. We dont have hardly anyone in the office so they will probably get rid of the current office space when our lease is up. We dont need coffee supplies, office supplies, paper supplies, etc because we are working from home. Nice for me but not good for our vendors. Also the restaurants in our buidling have been shut down, coz not enough business, they are suffering too. the train and bus (CTA and Metra in chicago) have lost revenue due to no commuters. There may be more, too.. but these are what comes to mind.
Seems to me you already are shouting a "doomsday scenario" for downtown Chicago. Guess just Chicago will be doomed as is the mantra here.
Sounds like the Catholic Priest has been hailed for - Last Rites by a Death Bed Prayers..... Like downtown looses Theaters and cannot even be a Entertainment location. Like All in the South Loop, West Loop, River North, Streeterville, Lakeshore East and more .... will just abandon everything downtown has to offer.
Guess the City will LOOSE ALL CONVENTIONS. Tourism is DOA rather ...Dead from no arrivals..... and the Bean even a has-been. Why even re-open Navy Pier right? Guess we should forget Tail Gating at Soldier Field. Just not worth it.... we are use to not going to games now..... ¯\_(ツ)_/¯
All can just stay in their condo, apt. or home or comfortable suburban location and ..... feel like they did 40 50 yrs ago like my relatives as a product of White Flight. To them .... downtown was a no-go zone or interest. They saw no glory days left too. Well that luckily had them wrong as the 80s 90s showed it not dead ... till NOW AND CHICAGOANS ON C-D have resurrected it..... BYE BYE DOWNTOWN and your TOWERS will just be RELICS.
Some never realize that Chicago still is a city that will FIGHT TILL THE LAST MOMENT. KICKING and PASSING GO and ITS NEXT ----- " 9-lives it passed loooong ago".have it say --- look out ain't getting us yet ......
Some said this on NYC in the 70s.... literally. There already was no Times Square as we know it again.... it was well XXX Central Square.
Chicago was named top metro for corporate relocations six years in a row through 2019.
Chicago's building boom the last 10 years has been one of the tops in the nation.
Despite all that...Chicago was losing 100 citizens/day pre-covid
It's not doom and gloom but rather an honest look at Chicago. We should understand why people are leaving and what residential demands post-covid will look like. One example is we can market low COL to workers fleeing New York and San Francisco to grow our population. Get the same amenities here for half the price while being able to own a car and walk down a street that's not packed with homeless people.
Seems to me you already are shouting a "doomsday scenario" for downtown Chicago. Guess just Chicago will be doomed as is the mantra here.
Sounds like the Catholic Priest has been hailed for - Last Rites by a Death Bed Prayers..... Like downtown looses Theaters and cannot even be a Entertainment location. Like All in the South Loop, West Loop, River North, Streeterville, Lakeshore East and more .... will just abandon everything downtown has to offer.
Guess the City will LOOSE ALL CONVENTIONS. Tourism is DOA rather ...Dead from no arrivals..... and the Bean even a has-been. Why even re-open Navy Pier right? Guess we should forget Tail Gating at Soldier Field. Just not worth it.... we are use to not going to games now..... ¯\_(ツ)_/¯
All can just stay in their condo, apt. or home or comfortable suburban location and ..... feel like they did 40 50 yrs ago like my relatives as a product of White Flight. To them .... downtown was a no-go zone or interest. They saw no glory days left too. Well that luckily had them wrong as the 80s 90s showed it not dead ... till NOW AND CHICAGOANS ON C-D have resurrected it..... BYE BYE DOWNTOWN and your TOWERS will just be RELICS.
Some never realize that Chicago still is a city that will FIGHT TILL THE LAST MOMENT. KICKING and PASSING GO and ITS NEXT ----- " 9-lives it passed loooong ago".have it say --- look out ain't getting us yet ......
Some said this on NYC in the 70s.... literally. There already was no Times Square as we know it again.... it was well XXX Central Square.
I learned a long time ago that you simply cannot predict this stuff. I bet on some sure things and came out on the losing end, and did some things I didn't really think were going to pan out well but did. Real estate is fickle.
That said, dtcbnd03 could be onto something with the coastal elites though. Seems like coastal investors are really buying up properties here in certain areas. Not sure you're going to necessarily like their overall mentality if you're a longtime Chicagoan but it will definitely raise the affluence of the City!
Look at this report fresh out of Linkedin and Bloomberg showing 2020 cities gaining and losing. Notice the secondary, low COL, sunbelt city trend. How do you think Chicago will transform in 2021 and beyond?
Chicago and other big cities are in for a dramatic transformation in 2021 and beyond due to the black swan covid event. If we stop and think about our everyday life and how much the entire world was forced to change at once we can see that big cities like Chicago will require significant changes going forward. A few thoughts:
1. Remote work is here to stay and will de-couple workers from urban hubs like Chicago. Cities won't compete as much on jobs...COL, lifestyle, amenities and weather will play a much greater role in hometown choice as opposed to living close to work.
2. Chicago metra based on large hub and spoke model will contract as demand declines (due to remote work).
3. Demand on CTA and Metra will decline (due to remote work) and so will service frequency.
4. Many office buildings will either be converted to residential or left vacant (like old shopping malls).
5. Chicago and Illinois population will decline at a faster rate due to high taxes, topography and weather.
On the flip side there is a national housing shortage and Chicago metra could get ahead of this nationwide wave of people moving by promoting relatively low COL, existing affordable housing, livable city, amenities, schools, lakefront, etc. while working as quickly as possible to reduce crime and taxes. We could GROW our city by grabbing the people moving from San Fran and NYC instead of see it decline.
This comment seems to be under the impression that the way things are in 2020 (with COVID present) will continue on forever. This is just not going to happen.
A vaccine is being distributed as I type this. The virus will die off, and people will go out again. Even if we may never get to the "complete" normal we had before Feb 2020, the future also will not be as extreme as it has been this year. Of course, this will take time no doubt, but we will eventually get back to some level of "normal".
The "Zoom economy" will not last forever, though it's undeniable the WFH will stay, but many jobs will most certainly return to normal, and in person too. You say Chicago will be hurt from WFH, I whole-heartedly disagree. Folks wanting a cheap+ big city experience, will go for Chicago (and Philadelphia) before anywhere else. Many people still desire to live in big cities, contrary to some alarmists on the internet.
I think Chicago will definitely fare well in the future given housing prices and overall cost, even despite taxes and weather. The city still offers a unique big city experience you can only get in a handful of cities in America. But as I said, we've still got a ways to go, and definitely have obstacles ahead.
Mag Mile ... Ya still look good on in a pandemic year of issues and all you need is workers, tourist and locals to shop.
Two recent videos one at night on Mag Mile and one Day.
The Mag Mile is still decked out, clean and shoppers still come.... just in lower numbers sadly in this damnable year. Let us ALL home next Christmas will be much more back to normal and as many shops survive as possible and for those lost like Gap and Macy's in Water Tower Place get some new store tenants or other uses like the former Crate and Barrel got the Starbucks Roastery. Might take a more then a year even.... time will tell WITHOUT DOOMSAYERS ALREADY HERE PRACTICALLY WISHING IT to prove a political point even.... yes for some it is all that.
Scenes on Mag Mile a week ago at night. still some shoppers and Chicago's
tradition of trees wrapped in lights. NEXT YEAR WILL BE BETTER RIGHT.
Chicago was named top metro for corporate relocations six years in a row through 2019.
Chicago's building boom the last 10 years has been one of the tops in the nation.
Despite all that...Chicago was losing 100 citizens/day pre-covid
It's not doom and gloom but rather an honest look at Chicago. We should understand why people are leaving and what residential demands post-covid will look like. One example is we can market low COL to workers fleeing New York and San Francisco to grow our population. Get the same amenities here for half the price while being able to own a car and walk down a street that's not packed with homeless people.
10-20 people in a corporate headquarters relocation is not something to brag about.
Especially when hundreds of thousands have been laid off.
Even more importantly with the Covid work from home trend those corporate HQs amount to nothing more than chest thumping.
work from home which office workers (like me) can easily do from home - changed everything. so people can live far from work and not have to commute. This will save people anywhere from $60 - $300 a month commuting. And time. you can sleep longer. No crazy waiting out in the bad weather! That means office space wont be used and so rents will probably go down as buildings try to fill the now empty office space.
Another industry which will be affected is the hospitality business i.e. hotels, restaurants downtown that catered to office workers, travelers, convention goers, and the other businesses that profited from these types of customers.
if those close down, the wait staff and cooks, etc, wont be needed in those downtown restaurants and they will lose jobs.. so its a loss for many many people.
Since schools have been closed, there goes everything that has to do with that. no one going to the theaters, even downtown.
In my office, we have had it open for those who want to work, however, we do not use the copier, the printing, or anything that has been replaced with it being online. We dont have hardly anyone in the office so they will probably get rid of the current office space when our lease is up. We dont need coffee supplies, office supplies, paper supplies, etc because we are working from home. Nice for me but not good for our vendors. Also the restaurants in our building have been shut down, coz not enough business, they are suffering too. the train and bus (CTA and Metra in chicago) have lost revenue due to no commuters. There may be more, too.. but these are what comes to mind.
I agree that things will be changed as far as work locations go, probably forever. Including the knock off affects you mention. However, I do not think that Covid (really misguided bureaucratic shutdowns) is the cause. It just rapidly accelerated what was inevitable.
My firm was a bit of a pioneer in pushing and even mandating a mobile workforce starting 20 years ago. During my career, we went from the traditional huge office in a prestigious building downtown where all of upper management had private outside offices (which were quite nice and homey) to severe "densification" in newer but less known buildings with less than half of our original physical footprint while at the same time more than doubling headcount. We all lost our permanent private outside offices (everyone hoteled no matter who you were). But it took an enormous investment in IT infrastructure globally over many years to make it all happen. Some, like me, embraced it. The goal was to get everyone out of the office and at clients. So it was not WFH. It was work from wherever you happen to be anywhere in the world, be that home, a client office or plant, a hotel, a plane or airport, a foreign office, wherever. I was a bit on the extreme side of this initiative due to the nature of my practice that required that I be present in person at proceedings domestically and internationally. I was rarely in any office and when I was it was only for a few hours (the office I was in the most by far was Tokyo followed by DC, then LA, then a commuter office by O'Hare).
My firm saw that the huge savings in real estate costs offset the investment in IT infrastructure while at the same time encouraging the "get the hell out of the office and over to your clients locations" culture. You could live anywhere (a couple of my close colleagues lived on farms in the deep south and west coast). Many firms looked at the IT infrastructure cost side and said "no way". Now, those firms have had no choice but to make the investment just to survive and now can clearly see what a drag real estate costs have on earnings. This was going to happen anyway over the next decade. It just got all jammed into one year.
I think the same thing is going to happen to business travel (and this is coming from someone who has flown over 4 million miles all over the world and can read the tea leaves). I just don't see business travel coming back to where it was. Businesses were cutting back on international travel pre-Covid and now that process which would have taken several years, was also jammed into one year. Airlines are fooling themselves if they think business travel will bounce right back. Personal travel will (and has to some extent) bounce back (I have flown every month this year and since July, airports and planes have been full of personal travelers and it keeps growing). Airlines are going to need to rethink where their future revenue will come from. And that will have its own knock off affects.
Last edited by wjj; 12-16-2020 at 11:10 AM..
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