Meanwhile, president Rich F. Cavenaugh hopes his Whiteco Residential LLC gets a green light as soon as today to build a 220-unit multifamily rental property. But the location would be in the west suburb of Oak Park rather than the city.
Those were the positions staked out Wednesday during a Real Estate Investment Association panel discussion asking when the bleeding in the multifamily rental market will stop.
"If I were an owner of a property today, I'd be a big seller," says Crocker, who is stepping down from his post at the largest US multifamily REIT at the end of the year. "If I wanted to start a high-rise in Chicago, I'd wait two years."
Given the time needed to secure zoning and permits, that means Crocker's hypothetical high-rise wouldn't hit the market until late 2006.
For now, the market continues to see concessions, though scaled back from two months free rent or more. Magellan Development Group has had to deal with that at its four recent rental projects Downtown, which added 2,200 units to the submarket.
While corporate malfeasance, a skidding stock market, rising unemployment and low interest rates make the multifamily glass half empty, Carlins points out changes in Cook County's property tax system could cut bills for multifamily owners by 20%. Meanwhile, banks are calling owners, looking to make deals, he adds.
Cavenaugh sees reasons beyond supply and demand to avoid the city entirely. He expects costs of new city energy and electrical codes as well as those associated with the American with Disabilities Act will add up to 15% to the cost of construction in Chicago.
However, Carlins sees cooperation from city hall. "The city's been helpful," he says.
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