ULI Chicago, in partnership with The Real Estate Center at DePaul University, has released The 2024 Chicago Mid-Year Sentiment Report, which is the culmination of feedback and interviews with commercial real estate professionals in the Chicago market.

Here is summary of the Report:

Chicago, like most major markets across the U.S., is deeply entrenched in “The Great Reset.” Originally launched in the aftermath of the pandemic, today the reset has become increasingly more challenging. The elimination of the zero-interest rate policy (and the rapid escalation of interest rates), stubborn but steadily declining inflation, and the struggle of most asset classes to find a valuation floor all are contributing factors.

Results from the 2024 Chicago Mid-Year Sentiment Survey, a joint initiative of The Real Estate Center at DePaul University and ULI Chicago, and a series of interviews with commercial real estate experts proved fascinating. Some in the industry voiced concern and question whether we’ve hit bottom or are still at risk of catching the proverbial falling knife. Other cycle-tested veterans wholeheartedly believe that one owner/investor’s distress is another’s opportunity.

Among the most intriguing findings of the survey include:

• The bulls and bears are both in town, it all depends on where you look! According to the survey, 56% of real estate professionals are bearish or concerned about the state of the market for the balance of 2024. From a wider lens—24 to 36 months—the bulls take over, with 60% expressing bullishness and optimism.
• Chicago real estate professionals are more confident that a recession will be avoided than they were mid-year 2023.
• More than half of professionals expect that the Fed’s efforts will produce a soft landing; the number expecting a hard landing has been halved from one year ago to 18%.
• Fewer people believe the bid-ask spread will widen in 2024; of those who believe the spread will narrow, 62% believe it will be the result of seller capitulation.
• Safety and taxes in general, especially property taxes, are among the greatest short and long-term concerns about investing in and doing business in Chicago.
• The three most concerning market risks are inflation, rising interest rates, and the potential for a recession.

Read the Full Report