Few, if any, parts of the country have been spared COVID-19'seconomic wrath and that includes the Windy City. However,suburban Chicago may benefit from the current turmoil, sayexperts.

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Sixty percent of Chicago real estate professionals with ties toThe Real Estate Center at DePaul University and the Urban LandInstitute Chicago District Council (ULI Chicago) said in a recentsurvey that they're worried.

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According to the Third Annual Mid-Year Perspective on ChicagoReal Estate Markets, produced by the partnership—40.3percent are concerned and 20.4 percent are trending towardconcerned. The findings were published on July 28.

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All the unknowns about COVID-19—from duration to severity ofreturn—are causing angst over the Chicago real estate market. Butnone more so than the pandemic's economic pressures on local,county and state governments as tax revenues dry up, said theDePaul-ULI Chicago Report.

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Rising unemployment and widespread availability of a COVID-19vaccine were also issues of growing concern.

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"COVID-19 has dealt every market across the country a set ofchallenges and circumstances no one could have anticipated," saidCharles Wurtzebach, Douglas and Cynthia Crocker Endowed Director,the Real Estate Center, DePaul University."Yet people want to beoptimistic; they are tired of COVID and want it to be over."

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That may explain why a third of those surveyed were optimisticor trending optimistic.

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Experts anticipate a variety of post-Pandemic officeconfigurations as employers embrace work from home [WFH]strategies, while looking to ensure productivity and sustaincompany culture.

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"We're in a severe economic recession. The question everyonewants answered is how long does that last; and we don't know," saysKeith Largay, Senior Managing Director & Chicago OfficeCo-Head, JLL. "It's hard to predict the outcome and unintendedconsequences of 40 million job losses and the stress it puts on thebalance sheets of people, companies, and governments."

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More than six in 10, or 61.5 percent, expect firms to shrinktheir space requirements as employers embrace WFH. Employers'ability to offer alternatives to avoid public transportation,elevators and other high density venues may prove too hard toresist unless working from home puts too much strain onproductivity, said the real restate report.

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More than three quarters (76.2 percent) of participants saidthey foresee a nominal to modest increase in suburban investmentsas the appetite for city spaces shrinks.

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"The suburbs could benefit from the changing patterns we'reseeing," says Sue Blumberg, Senior Managing Director, NorthMarq."We could see renters looking to the suburbs where units andoutdoor spaces are larger."

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A benefactor of all the uncertainty may be single story officebuildings and complexes—those that offer private entries andminimal common area spaces, said Michael Newman, Principal,President and CEO of Golub Company. "It could be an increased areaof demand in the suburbs," Newman said.

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The market uncertainty and volatility is causing investors topause. Many are looking at defensive options like debt positionswhere there is a layer of equity as a buffer just in casevaluations are off the mark. Others are looking at opportunitieswith more risk.

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As a result, the recovery of Chicago's real estate markets ismost likely going to be shaped like a Nike Swoosh say 42.5 percent,or the letter "W", according to 33.5 percent of participants in theDePaul-ULI Chicago survey.

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"Buying during a recession tends to create good outcomes. Butwe're in the early days of a recession unlike anything we've seenbefore," says Mary Ludgin, Senior Managing Director, Head of GlobalResearch, Heitman. "There are lots of chapters to this story.

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"We're in chapter one or two of maybe a six- or eight-chapterbook."

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Suzette Parmley

Trenton Correspondent who covers the N.J. Supreme Court, Governor, Legislature. She also contributes to The Legal Intelligencer and law.com. Suzette joined New Jersey Law Journal in Jan. 2019 from the Philadelphia Inquirer where she was a former Trenton Statehouse Correspondent and Business Reporter/Columnist. Awards: 1st Place for 2020 coverage of NJ Supreme Court; 2019 Specialized Writing Category, 5-time winner of the Business Financial Writing Portfolio Award from the New Jersey Press Association. Graduate of the Fels Center of Government/University of Pennsylvania. Email: [email protected] or follow on Twitter: @SuzParmley