Chicago leads nation in CRE investment

It breaks its own record for luring corporate relocations and expansions last year

Chicago, Investment
(Illustration by The Real Deal with Getty)

Who needs corporate headquarters?  Despite the losses of Boeing, Citadel and Caterpillar, the Chicago area has retained its No. 1 spot as the nation’s leading city for commercial real estate investment.

The Windy City broke its record for luring corporate relocations and expansions last year, making it the nation’s top metropolitan draw for investment for the 10th year in a row despite the high-profile headquarters defections, CoStar reported, citing a ranking by Site Selection magazine.

“If winning multiple championships establishes dynasties, what do you call it when you win 10 years in a row?” Site Selection Managing Editor Adam Bruns said in a statement.

“In Chicagoland, they hand the ball back to the ref and act like they’ve been there before,” he added. “Our project data tell us the metro area continues to attract companies and the talent those companies covet.”

Boeing’s headquarters moved from Chicago to the suburbs of Washington, D.C.; hedge fund Citadel migrated to Miami and Caterpillar’s jumping ship from Deerfield to Irving, Texas.

Despite the suckerpunch from those move-outs and the recent struggles of the Loop business district, Greater Chicago had 448 qualifying deals seven more than its record 441 relocations and expansions in 2021, according to the Site Selection trade pub.

Deals in the Chicago area topped the 426 qualified deals in Greater Dallas, 255 qualified deals in Greater Houston and 246 qualified deals in Greater New York. 

In metro areas with more than a million residents, Austin, Texas, led for the most qualifying projects per capita, with 132. 

Site Selection’s honors are often highlighted by cities, states and regions competing for jobs. The magazine said it has more than 40,000 subscribers, most of whom are involved in corporate relocation decisions.

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Major investments in Chicago include California-based Google’s deal to buy the formerly state-owned James R. Thompson Center in the Loop, in an expansion of the company’s Midwest hub in Fulton Market.

It includes Michigan-based Kellogg’s plans to spin off into three companies, the largest of which will be based in Chicago.

Other notable investments include the construction by Virginia-based candy maker Mars of what will become its largest research and development hub on Goose Island; Canada-based BMO Financial’s move to anchor a new 52-story office tower near Union Station; and Dutch logistics firm NewCold’s expansion in the 40-story office tower at 500 W. Madison Street.

Southwest of Chicago, Canadian electric truck and bus maker Lion Electric opened a large plant in Joliet.

West of Chicago, Ace Hardware signed a huge headquarters lease to anchor a redevelopment of the former McDonald’s headquarters in Oak Brook, which the fast-food giant left behind when it moved to Chicago’s Fulton Market district in 2018.

Despite concerns over high taxes and crime, Chicago benefits from a central U.S. location, transportation such as O’Hare International Airport, a key position in the nation’s supply chain and proximity to top universities such as the University of Chicago and Northwestern University, according to CoStar.

The Chicago region’s gross regional product grew 3.1 percent last year, with a 2.2 percent increase in employment, according to World Business Chicago. The transportation and logistics sector saw a 3.8 percent rise in employment, with 1,500 new jobs created.

— Dana Bartholomew

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