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Gloor Sees Unique Investment Chance Amid Chicago’s Real Estate Slump

Chicago’s commercial real estate market may be facing tough times, but Sterling Bay CEO Andy Gloor believes now is the perfect moment for investors to make a move. Speaking on Bloomberg Television’s ‘Balance of Power,’ Gloor said, ‘The opportunities that we’re seeing, we haven’t seen in 20 years. It’s a great time. It’s a contrarian move.’

Chicago’s central business district has been hit hard post-pandemic, with vacancy rates hitting a record 23.1% last quarter. Despite this, Gloor sees potential for significant gains, especially with expected interest rate cuts from the Federal Reserve on the horizon.

Sterling Bay, known for major projects like the $6 billion Lincoln Yards development, has continued to invest in Chicago, even as return-to-office rates stagnate around 50%. Gloor emphasized the need to lower borrowing costs to revitalize urban areas and get people back to work. ‘We need to get these cities back on track,’ he said, urging action to change the fundamentals driving the market downturn.

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U.S. Immigration Surge Boosts Housing Demand and Construction

The current surge in U.S. immigration is having a notable impact on the housing industry, providing a much-needed boost amid market challenges. As the labor force is projected to grow by 5.2 million people by 2033, largely due to increased immigration, the demand for housing is expected to rise significantly. This influx of new residents will stimulate housing construction and sales, particularly in regions experiencing high levels of immigrant settlement.

With the U.S. housing market facing inventory shortages in many areas, this growing demand could lead to new developments and investments in both residential and multifamily properties. The increase in homebuyers and renters will help sustain home prices and encourage the construction of new homes, which is crucial for addressing the ongoing housing affordability crisis.

Additionally, immigrants often fill essential roles in the construction industry, which can help alleviate labor shortages and accelerate building projects. As a result, the housing market could see a positive ripple effect, with increased activity and investment driven by the expanding immigrant population.

U.S. Housing Market Poised for Recovery as Mortgage Rates Drop

The U.S. housing market might finally be on the verge of a shift. While summer sales have been sluggish, there are promising signs that the market could pick up by the end of the season. Mortgage rates have dropped to their lowest levels in 15 months, which, along with more resale homes hitting the market, is giving buyers more options. Additionally, the median price for new homes has dipped below that of resale homes, with builders continuing to offer incentives to attract buyers.

However, experts like Lisa Sturtevant, chief economist at Bright MLS, caution that the market won’t see significant momentum until ‘mortgage rates drop enough to ease affordability challenges.’

This could encourage homeowners locked into low rates to list their homes, increasing inventory to meet growing demand. The market is still grappling with affordability challenges, but with price cuts on the rise and the potential for lower mortgage rates, there’s hope that the housing market could heat up as we head into the fall.

 

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Stream “3 Things You Need to Know” with Kayla Walsh, your essential daily update on the real estate world! Airing Monday through Friday, Kayla brings you the top three stories that matter most in real estate.

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