In early June, two of Chicago’s leading young developers sat down at the BSH Experience & Design Center in the famous Merchandise Mart to talk about hot submarkets, challenging capital stacks and the rare residential-to-office conversation. The evening, which was the latest event in BSH and The Real Deal’s Building Luxury series, featured a sizzling panel discussion followed by networking and cooking demonstrations, all set against the stylish backdrop of Bosch, Thermador and Gaggenau appliances.
TRD Chicago Bureau Chief Sam Lounsberry kicked off the panel by asking Fulton Street Companies Founder & CEO Alex Najem to talk about the journey his Fulton Street Lofts has taken from Schwinn bicycle factory to multifamily to hotel to, ultimately, Coca Cola’s newest offices.
“I am proud to be the only multifamily deconversion to office, probably in the country,” said Najem, who described how Coca Cola fell in love with the space after just a single tour. “They were like, ‘We love it. We want to take the entire building.’”
The conversation soon turned to the unique challenges and benefits of building in Chicago, a market with chronic low supply despite strong demand. The city has some of the highest, and most ambiguous, property taxes in the country, making it a difficult market to enter. However, once a developer jumps these hurdles, the stable market makes up for the difficulties.
“It’s all about focus, right? The moment you start to spread yourself thin, that’s when it becomes a third rail,” said Nick Melrose, Founder & CEO, Melrose Ascension Capital, who has succeeded in the Windy City by becoming an expert at multifamily development. Melrose emphasized that, when compared with some flash-in-the-pan markets, “Chicago is the slow and steady player” where hard work is rewarded with long-term stability.
The conversation continued after the panel concluded, with attendees enjoying custom bourbon cocktails and a sumptuous spread of small bites alongside various Bosch, Thermador and Gaggenau vignettes.
“Chicago has, historically, always outperformed volatile markets because we are the opposite of volatile,” said JC Griffin, who appreciated the panelists’ take on the city’s challenging tax regime. “Juggling the triennial system here in Chicago is always difficult for investors who are not used to it.”
As the evening wound down, Rick Federico, BSH’s VP of Sales for the Western Region, reflected on the conversations he had with real estate professionals.
“Hearing what they go through on a daily basis helps us understand how we can do our business better,” he said. “I’ve met some folks here that I never would have met anywhere else.”
On July 9th, BSH and TRD will host the next event in the Building Luxury series, Building Los Angeles, where speakers Paul McClean, Garrett Lee and Ardie Tavangarian will discuss the city’s roadmap to recovery. Apply to attend here.
As TRD’s Exclusive Appliance Partner, BSH brings innovation and design excellence to the forefront of the real estate conversation. Visit the Appliance Hub to learn more about Bosch, Thermador and Gaggenau.