ULI Chicago Chair, Mary Ludgin, Senior Managing Director – Head of Global Research, Heitman and John Murphy, Chairman & CEO, Murphy Development Group, sat down with Crain’s Chicago Business reporters, Amy Guth and Alby Gallun to discuss the state of the industry and where things are heading.  The conversation, which was featured on the Crain’s Daily Gist podcast, hit on a variety of industry updates, including the continued expansion of tech firms in Chicago, how city and state fiscal problems are affecting the industry, and what the potential tax-hike means for each sector.

As Mary shared an overall outlook she said, “We’re into the 10^th year of an expansion…we’re slowing rapidly, GDP nationally running at 1.8%.  That makes us more vulnerable nationally to some sort of outside or internal shock.  Political calendars tend to drive fiscal initiatives and other things to help stabilize the economy; miraculously just in time for a presidential election. So we could see this continue for another couple of years.”

John discussed Murphy Development Group’s newest project, The Paragon Chicago, a 500 unit apartment building located in the South Loop.  “It was on-time [and] ahead of budget,” John shared.  “You’re talking about a segment of the marketplace that had not seen high-quality high rise product delivered for 20+ years.  So when you see [other South Loop projects like] Paragon in this under-served area of our City, has seen tremendous absorption.  Primarily because the economics from Lakeshore East, River North and event the West Loop have been pushed so high they’re starting to see $4 rents.  Whereas, we underwrote at the high $2 levels and we’re seeing $3.35-$3.40, which is significantly outpacing our proforma…so we feel very good about that.”

Listen to the entire Daily Gist Podcast and hear what Mary & John had to say about their outlook for CRE, including the downtown office market, the future for co-working and more!