Chicago Office Challenges and Opportunities with Matt Pistorio

In this episode of the Real Estate for Breakfast podcast, Ice Miller Real Estate Practice Group partner and host Phil Coover sits down with Matt Pistorio, principal at R2 Companies, a privately-held, fully integrated real estate investment and development firm, and founder of Madison Rose, a real estate firm specializing in agency leasing.

During the conversation, Matt talks about his passion for what he does and details how he began his professional journey with commercial brokerage houses. He recounts his road to becoming a principal at R2, and the opportunities and support of colleagues that allowed him to simultaneously have two significant roles at major real estate companies, including founding and driving Madison Rose forward. He details his involvement with the two companies, which at time cross paths on projects but remain separate. Matt discusses his mentors and the impact they had in the way he guides and manages his employees, and his belief that positive energy and attitude translates into building a positive workforce and overall success.

Phil and Matt also talk about the office market and the current vacancy rate in Chicago, and how cities across the nation are feeling the pressure. Specifically, the massive dent in the market due to less demand with more people working from home. Matt and Phil also discuss distressed office space and explain the methodology of what should and needs to occur to get a business to a place that feels good where it can operate effectively.

They also dive into the diamond that is 150 North Michigan, and the outlook of how it will play out in the market as a prime location, with new amenities and building upgrades. They touch on what Chicago looks like post-pandemic, if people are coming back downtown, the downside of financing and underwriting transactions, and everyone’s favorite – taxes. The pair also talk about the strategy in bringing back the Chicago Board of Trade building from foreclosure to a white-hot, second-generation property for office use, and how vintage spaces are being rebranded and brought back to life while maintaining their history and importance to the city.

Matt has nearly two decades of experience repositioning and leasing of commercial real estate assets. His projects include the Chicago Main Post Office, Aon Center, Citadel Center, Willis Tower and Prudential Plaza. Matt is a two-time recipient of the Greater Chicago Food Depository’s ‘Broker of the Year’ Award.

R2 Companies owns, operates and manages superior investment opportunities. With offices in Chicago, Milwaukee and Minneapolis, they are fully-integrated – managing all aspects of the real estate investment process.

Madison Rose, founded in 2019, brings buildings back to life. Named after Pistorio’s two daughters, the firm brings a new age model to leasing by curating the stories of properties and tailoring their approach to showcase each building’s unique strengths and value.

ESG in Commercial Real Estate with Sarah Cannella of Hiffman National

In this episode of the Real Estate for Breakfast podcast, Ice Miller partner Phil Coover interviews Sarah Cannella, Director of Property Management Operations for Hiffman National, which is the asset management arm of the privately owned, commercial real estate and management firm.

During their conversation, Phil and Sarah discuss how Hiffman is not a one-size-fits-all company and the intrinsic knowledge it takes to provide what the clients want and need to satisfy their stakeholders and investors. Sarah talks about the ability to be customizable, a perk of being privately owned, and how it has positioned Hiffman as a top alternative firm to the big national players. Hiffman is responsible for spaces in office, medical and industrial real estate — with the latter experiencing a surge in the Midwest since Covid.

They also discuss ESG, its history and the three pillars:

• E for environmental

• S for social

• G for governance

Within each of the pillars, different strategies are constantly evolving and being determined in how companies are contributing to being a sustainable player in the nation, world, and ecosystem. ESG is a way for stakeholders, investors and partners to examine more than just the bottom line, and evaluate questions like:

• “What impact are they leaving on the environment?” and,

• “What impact are we leaving on society?”

The pair digs into how ESG is touching real estate efforts across the globe, and how Hiffman has made huge steps in talking to their clients about how to implement ESG standards and how many institutional money is requiring ESG processes for their investments, particularly from foreign investors.

Sarah talks about the growth of the company, first in the Midwest and then branching out to Philadelphia and the East Coast. Their initial growth was organic and then spread through client driven initiatives. Hiffman National delivers full range commercial real estate services nationwide and have planted their flag throughout America with offices in 27 states; however, the company is always examining what may be the best next location for expansion.

Sarah Cannella joined Hiffman in 2012 and is currently responsible for the oversight of the property management platform and operational initiatives, including transitioning assets, the Hiffman U property management training program, auditing, due diligence and technology platform directives. Sarah oversees four individuals who are solely dedicated to administering and evolving the Property Management platform. Prior to her role in operations, Sarah worked with the Hiffman Management Services group on behalf of investor clients on industrial, office and retail assets throughout the Chicagoland market.

Headquartered in Oakbrook Terrace, Illinois, Hiffman is a full-service, privately owned commercial real estate brokerage and management company. Hiffman National is the company’s management platform serving markets across the nation. NAI Hiffman is the Chicago-based brokerage operation and representative for NAI Global, the world’s largest managed network of real estate service providers across the world.

What’s Next? Foreseeing the Drive and Demand in an Ever-Changing Real Estate Landscape with Jon McCulloch, CEO of Belgravia Group

In this episode of the Real Estate for Breakfast podcast, Ice Miller partner Phil Coover interviews Jon McCulloch, CEO of Belgravia Group, an award-winning Chicago based real estate developer, that has provided quality homes and real estate services to clients for 75 years.

During their conversation, Phil and Jon talk about his start with the company, growth, and responsibilities as CEO. Jon also speaks on the bread and butter of what makes Belgravia, a smaller conglomerate, a frontrunner in the Chicago condo market and deep dives into how they survived and came out fairly unscathed in the economic downturn of 2008 and how they are navigating the current market.

They touch on macroeconomics, failing banks, interest rates and where the market stands and the demand and desire for new product, as well as Belgravia’s expansion into the West. Jon provides his thoughts about the challenges in the market and what goes into the decision-making process in choosing and building a project. The pair also discuss distressed investments in office and the fluctuation in occupancy and funding in older spaces, and the wait and see game.

Jon McCulloch has been with Belgravia Group since 2004 and serves as the Chief Executive Officer. He is responsible for the company’s residential developments and oversees the company's debt and equity needs. He also is a Principal at Belgravia affiliate, Lakewest, Inc., as well as a co-founder of Lakewest Venture Partners, and a Venture Partner at Dundee Venture Capital. He is also an avid soccer fan and member of the U.S. Soccer Federation’s Chicago Development Council, which efforts support increasing access and resources to accelerate the development of youth soccer players and their coaches.

Belgravia Group is an industry leader and vertically integrated company with divisions for real estate development, sales and marketing, interior design, accounting, customer service, and a full range of real estate legal services. Belgravia recently expanded to the Arizona market, with Portico, a collection of luxury condominiums.

Listen to this episode of the Real Estate for Breakfast on Apple Podcast here.

Integrated Design with Kapil Khanna, CEO of Lamar Johnson Collaborative

On this episode of Real Estate for Breakfast, host Phil Coover and guest Kapil Khanna, CEO of Lamar Johnson Collaborative (LJC), discuss some of the design challenges that the architecture firm faces in a changing world. As part of an integrated design practice with its parent company, Clayco, a full-service, turnkey real estate, architecture, engineering, design-build and construction firm, LJC has a competitive advantage in its understanding of the intersections between design and construction.

In addition to discussing LJC’s background and overall design process, Phil and Kapil also talk about the many challenges that have arisen in the architecture industry due to the pandemic. Specifically, they discuss the supply chain and how LJC’s scale allows the company to prioritize and plan strategically to navigate the ever-changing world.

Kapil also explains the concept of resiliency planning, which includes anticipating a building’s capacity to adapt to changing conditions and to maintain or regain functionality in the face of stress or disturbance. Along with sustainability, resiliency planning is another important design parameter, and Kapil shares examples of designing vertical agriculture and massive 40 acres greenhouses.

Since the year is winding down, Kapil also takes the time to reflect on some of LJC’s recent projects, such as a Macy’s Flagship store, Pfizer’s Midwest headquarters and Fulton East, a newly constructed 12-story office and retail building. He says LJC is optimistic about 2023, especially as industrial projects are increasingly in demand.

As CEO of LJC, Kapil Khanna focuses on overall firm management. A member of the executive leadership team, he is responsible for providing direction for both the business strategy and the implementation of initiatives to support the firm’s growth. Kapil works across all disciplines of the enterprise to seek out opportunities for greater alignment and integration, and to make positive impacts on the firm’s most complex projects.

A veteran of the design industry, Kapil has provided project management on some of the region’s largest and most complex projects for healthcare and academic systems, including Cook County Health & Hospitals System’s Stroger Hospital Central Campus, University of Chicago Medicine Center for Care and Discovery Parking Garage, Orange Regional Medical Center Outpatient Care Center and Cancer Center Expansion; as well as extensive projects with higher education and healthcare facilities across the U.S. prior to joining LJC.

The Multifamily Housing Market in Chicago, the Importance of Market Research and the “Next West Loop” with Jon Morgan of Interra Realty

On this episode of Real Estate for Breakfast, host Phil Coover is joined by a fellow champion of Chicago, Jon Morgan. Jon is co-founder and managing principal of Chicago-based Interra Realty, and he and Phil begin their conversation by discussing Interra’s formation to its emergence as a middle-market commercial real estate brokerage focusing primarily on multifamily asset sales.

During the episode, Phil and Jon reminisce on the 2008 recession and how it differs from today’s market conditions, especially concerning the level of control banks previously had on real estate. Now that the real estate market is so volatile, Jon ensures that research is an integral part of Interra’s philosophy. Jon says he and his colleagues track the market weekly and stay in constant communication with clients to effectively take advantage of fluctuating market conditions.

Jon also explains how the multifamily market has managed to stay lucrative despite seesawing trends spurred by the pandemic. He points out that retailers are now starting to participate in the multifamily space because it keeps pace with inflation, making it a prime investment opportunity.

As fellow Chicagoans, Phil and Jon do not forget to pay homage to the city by highlighting Chicago’s phenomenal restaurants, major sports teams and growing tech scene. As the two discuss prominent Chicago neighborhoods such as the West Loop, Phil capitalizes on Jon’s knowledge of economics to get him to reveal what he believes the “next West Loop”, or at least an up-and-coming area of Chicago.

Jon Morgan began his career in real estate in 2004. Since then, he has been involved in more than $1 billion in transactions, including apartment buildings, retail properties and ground-up developments.

Jon co-founded Interra Realty with David Goss in 2010 to create a different kind of brokerage firm, one built on trusting relationships with buyers and sellers and hyperlocal, block-by-block expertise. This, coupled with Interra’s commitment to client service, has helped the company to establish many long-lasting relationships, fuel its meteoric growth and become a destination for talent and the training of up-and-coming brokers. As Chicago’s top middle-market brokerage, Interra now handles almost one in five sales of apartment buildings up to 100 units, according to CoStar.

Learn more about Interra here: https://interrarealty.com/

Building the Capital Stack with Trisha Connolly, Managing Director of Alpha Capital CRE

On this episode, Alpha Capital CRE Managing Director Trisha Connolly joins Phil to discuss building the capital stacks, money, and the various types of financing and equity investments available. Alpha Capital CRE started in 2008 as a hedge fund placement agent firm raising institutional capital for fund to funds. In 2010, Alpha Capital transitioned to a capital markets platform. Since its inception, the company has changed its name, institutionalized its platform, and grown its team. They optimize solutions for capital, whether it’s debt or equity, for transactions across the country.

Phil and Trisha start by discussing what goes into a capital stack. They touch on what a bridge lender may provide in commercial real estate, why the 30-year mortgage is often an afterthought in this space, and the types of debt with flexibility in a future sale. Phil also asks Trisha about the influence of local banks in her work, as well as her depth of relationships in the national lending community. Phil and Trisha close out the interview by going into the details of creating a development deal, subordinate financing, and the concept of preferred equity.

Trisha Connolly is a Managing Director at Alpha Capital CRE and serves as a partner on the equity and debt placement team nationwide. She specializes in commercial real estate financing with over 11 years of experience including loan restructuring, term financing, syndicated credit facilitating, construction financing, acquisition financing, advisory and joint venture equity or programmatic equity. She has advised on capital markets financing transactions exceeding $2 billion. Trisha specializes in structured financings and continues to work on permanent and floating rate executions. Prior to joining Alpha, Trisha spent four years managing Cushman and Wakefield's Equity, Debt & Structured Finance team. Preceding C&W, Trisha spent more than five years at General Growth Properties (GGP) within their Capital Markets team, focusing primarily on workouts, refinances and development financing.

Learn more at:  www.alphacapitalcre.com

Episode 15 - Dan McCaffery

Phil sits down for a cup of coffee with Dan McCaffery of McCaffery Interests.  Dan explains how he went from a college student in Canada to running a hugely successful real estate development and full service real estate firm in Chicago, Illinois, that has successfully completed over $2 Billion of commercial real estate developments.   Dan is a big picture guy who has made big developments his business, including the current development of The Lincoln Common in Lincoln Park, Illinois.   The Lincoln Common is the former site of the Children’s Memorial Hospital, and the project will cover a contiguous 6.04 acre area which includes 100,000 square feet of retail space, 538 apartment units, 40 luxury condominiums, a 5-story boutique office building, 850 garage spaces, and a 156 room senior living facility, with over 1 acre of open space and multiple swimming pools.  Dan explains how he and his team “imagineers” huge developments, his strategy for pricing the site while factoring in construction and other costs, and obtaining the vision to see the project completion and how it can transform a community.    Dan also discusses his developments in the West Loop and participating in the revitalization of that area, and how to build projects which are attractive to multiple generations including the millennial demographic.  McCaffery interests has been instrumental in pioneering the Strip District in Pittsburgh.  Dan’s story about the sale of the old Nike Town property exemplifies the attraction to real estate development and real estate property values.   Dan also explains why the retail sector may be a great opportunity for investment in this period of bad news surrounding retail.

It is readily apparent that what Dan values above all else is partnerships, and having partners that you can trust, and who share similar visions.  “Relationships over returns,” as Dan says.

McCaffery Interests Website:  http://www.mccafferyinterests.com/

The Lincoln Common Project:  https://lincolncommon.com/

DISCLAIMER – No information contained in this Podcast or on this Website shall constitute financial, investment, legal and/or other professional advice and that no professional relationship of any kind is created between you and podcast host, the guests, SATC Solution Center L3C, or Schenk Annes Tepper Campbell Ltd. You are urged to speak with your financial, investment, or legal advisors before making any investment or legal decisions.

Episode 12 - Sleeping Bear Capital - Andrew Calcutt and George Freeman

First, Phil provides an ICSC RECON recap, and he shares his first experience at the storied conference in Las Vegas.   Phil then sits down with Andrew Calcutt and George Freeman, two long-time friends and business partners, who invest in 6-30 unit multi-family buildings in the south side of Chicago.   Andrew and George discuss their strategies, their challenges finding quality deals in the current marketplace, the lack of REO inventory, distressed debt purchasing, and their strategy of renovating challenged properties to provide affordable, quality housing in challenging markets.

Learn more about Sleeping Bear Capital here.

DISCLAIMER – No information contained in this Podcast or on this Website shall constitute financial, investment, legal and/or other professional advice and that no professional relationship of any kind is created between you and podcast host, the guests, SATC Solution Center L3C, or Schenk Annes Tepper Campbell Ltd. You are urged to speak with your financial, investment, or legal advisors before making any investment or legal decisions.

Episode 4 - Colin C. Laitner

Phil grabs a cup of coffee with his good friend, Colin C. Laitner, the general counsel of Deeter Investments, LLP, a private investment firm, and a principal of Metis Capital, LLC, a commercial real estate development company based out of Austin, Texas.  Phil makes Colin tell the story of how he got his position with Deeter Investments, LLP, and discusses a private nuisance lawsuit where a local live music bar on Sixth Street in Austin, Texas, called The Nook, is being sued by a corporate giant, The Westin Hotel.  Finally, Colin talks about his efforts to attract foreign investments in his company’s development of light industrial and commercial “flex” space, called the Sheldon Cove Corporate Center, which is part of a commercial condominium development.

DISCLAIMER – No information contained in this Podcast or on this Website shall constitute financial, investment, legal and/or other professional advice and that no professional relationship of any kind is created between you and podcast host, the guests, SATC Solution Center L3C, or Schenk Annes Tepper Campbell Ltd. You are urged to speak with your financial, investment, or legal advisors before making any investment or legal decisions.

Episode 3 - Robert Walters - Part 2 of 2

Robert Walters – Principal of Quattro Development, LLC.  In part 2 of a 2 part episode, host Phil Coover continues his conversation with Rob Walters of Quattro Development, Inc., where they discuss the nuances of approaching municipalities around the country, picking sites by looking at population density, the difficulties of entering the commercial real estate industry, and a new non-profit endeavor to help underprivileged youths gain work experience in commercial real estate.

Learn more about Quattro Development here.

DISCLAIMER – No information contained in this Podcast or on this Website shall constitute financial, investment, legal and/or other professional advice and that no professional relationship of any kind is created between you and podcast host, the guests, SATC Solution Center L3C, or Schenk Annes Tepper Campbell Ltd. You are urged to speak with your financial, investment, or legal advisors before making any investment or legal decisions.