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.

Office Space: An Alarming Situation and the Coming Wall of Maturity -- with Alissa Adler of Colliers

In this episode of the Real Estate for Breakfast podcast, Ice Miller Real Estate Practice Group partner and host Phillip Coover welcomes Alissa Adler, Senior Vice President at Colliers, a global real estate services firm.

During the podcast, Alissa and Phil discuss serious distress in the office real estate market nationwide—particularly in larger cities such as San Francisco, New York, and Boston. Within those cities, challenges including transportation, tax assessments, and crime are explored while emphasizing other issues such as the change in work culture and having dated, functionally obsolete office spaces. These compounding issues have contributed to the seriously distressed office market, which could have cascading micro and macro economic effects. They also touch on the “Wall of Maturity” for CMBS loans coming due. With lenders having pulled back dramatically on lending in the office market, there is starting to be, and will continue to be, challenging situations for borrowers—who may have to fight foreclosure or hand over the keys to a lender in this difficult environment.

The pair also discuss the challenges and factors that play into repurposing a building, whether an owner can demolish or convert a property, and the hurdles that these properties encounter in examining how to value them and what they will become. Ultimately, some people will see a lot more funds to buy distressed assets.

Alissa Adler joined Colliers as SVP in 2019, and focuses on office investment sales across the Midwest, as well as debt and equity placement, and has in-depth experience across office, industrial and retail asset classes. Based in the Chicago area, Alissa is recognized in the industry for utilizing her broad real estate knowledge and massive network to uniquely serve her diverse client base.

Colliers is a global leader in real estate services and management. Founded in 1898 in Vancouver, Canada, as a real estate, property management and insurance agency, it now operates in 66 countries, with 18,000 employees worldwide that collaboratively work to provide expert real estate and investment advice to clients. Colliers Chicago was founded in 1947, and is made up of more than 300 real estate advisors, property management professionals and staff. The company’s mission is to maximize the potential of property and real assets to accelerate the success of their clients, investors, and team.

Beds, Sheds and Mixed-Use Property Development with Peter Kelly and Dan Reidy of Lincoln Property Company Midwest

In this edition of the Real Estate for Breakfast podcast, Ice Miller partners, host Phil Coover and co-host Jay Augustyn, welcome Peter Kelly and Daniel Reidy of Lincoln Property Company Midwest (LPC Midwest). The foursome talks about real estate development and trends, specifically in the Midwest and opportunities that the company is exploring for continued long-term growth in office, residential and industrial space.

During the podcast, Peter and Dan discuss strong Midwest market and epicenters for growth, as well as the importance of having a partner with strong ties to local government and public affairs to streamline projects for success. They also touch on the challenges in the market with increasing costs and if the demand will keep up with the supply that’s trending. Peter speaks to seizing the right opportunities to go forward and long-term fundamentals, while Dan talks about being selective and the importance of building culture, logistics and the inside knowledge of opportunities that will drive demand to spaces.

Peter Kelly is the Executive Vice President of LPC’s commercial real estate activities across the Midwest, which include acquisitions, dispositions, development, joint ventures, agency leasing, property management, construction management and other services. LPC Midwest has grown to over 15 million square feet of assets under management across five states, under Peter’s direction.

As Vice President at LPC, Dan Reidy oversees industrial property acquisitions and development in the Chicago area and throughout the Midwest. Dan joined the company in 2019 and has been at the forefront of many major developments in and around the region and is currently leading the efforts of a $100+ million project in Indianapolis and Columbus.

Lincoln Property Company was founded in 1965. LPC Midwest is one of the region’s leading commercial real estate service providers, offering property management, leasing, investment and construction management services. Our regional headquarters is located in Chicago, Illinois along with 15 offices across the Midwest employing 60 top-tier real estate professionals with the skills and resources to meet the needs of our diverse clients.

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.

Debt Financing and Life Companies with Mark Perkowski of Draper and Kramer, Incorporated

In this episode of Real Estate for Breakfast, host Phil Coover and his co-host Jay Augustyn are joined by Mark Perkowski, a Vice President in Draper and Kramer, Incorporated’s Commercial Finance Group.

On the podcast, Phil and Mark discuss the process of debt placement and financing for all types of commercial real estate deals. In particular, they examine a particular type of financing from life insurance companies, and what those types of lenders look for in terms of deals.  From there, they discuss the difference between lending sources, from life companies, to traditional banking, to CMBS loans, and current market trends stemming from COVID-19 fallout. Mark highlights the importance of relationships– both his own personal relationships and those cultivated throughout Draper and Kramer, Incorporated’s over 125-year history – in finding the best deals for his borrower and lender clients.

During his time at Draper and Kramer, Incorporated, Mark has closed $600 million in loans across all major property types, including hotels and data centers. He specializes in placing loans with life companies and structuring complicated transactions.

Hailing from western New York, Mark began his commercial real estate career in 2004 helping retailers use market data and analytical tools to identify the most profitable locations. He then served as a consultant to banks, advising them on the quality of their commercial real estate loans, prior to transitioning to commercial mortgage banking in 2011 when he relocated to Chicago. He holds a B.S. in business administration and finance from St. John Fisher College in Rochester, New York.  

Since 1893, Draper and Kramer, Incorporated, has sourced commercial real estate debt and equity used to acquire, develop, renovate, refinance and recapitalize assets across property sectors and markets throughout the U.S. Today, through its Commercial Finance Group, the company continues that tradition with innovative financing solutions at all levels of the capital stack that are offered to third-party clients and used by Draper and Kramer for its own investments.

For more information, please visit https://draperandkramer.com/

The Return to Work During COVID-19 with Antonia Cardone of Cushman & Wakefield

In this episode of Real Estate for Breakfast, Antonia Cardone, Americas Lead of Total Workplace for Cushman & Wakefield, joins Phil to discuss the return to work following the COVID-19 pandemic and stay-at-home restrictions. Cushman & Wakefield has helped numerous businesses return to work in China and across Asia, and Antonia brings that experience and knowledge to this discussion. Antonia and Phil discuss how businesses can prepare now to return to work in the future and think about what the future at work will be like and what we know now about people working from home. They discuss the “6 Feet Office” and other considerations as we go back to our offices, including maintaining social distance, minimizing touch points and managing any contamination. The return to work will be gradual and businesses can prepare the building, workforce and organization now for that transition. In the long run, technology will be key. The role of the office and how we create community and culture will change and evolve.

Antonia Cardone is Americas Lead of Total Workplace for Cushman & Wakefield. In this role, she supports clients and accounts challenged to create work environments that best support their people and business goals. Antonia’s specialties include innovative workplace strategies, activity based work settings, dynamic facilitation skills, sensitive change management, effective occupancy strategies and focused project management. She and her team serve clients by creating strategic plans to optimize space utilization; create dynamic, flexible work environments; and support change and future-ready spaces and portfolios. As well as providing stand-alone advisory services, the team has strong synergies with other services already available to Cushman & Wakefield clients, in particular, portfolio strategy, project management, brokerage and facilities management.

Visit cushmanwakefield.com for access to a range of online collateral including: podcasts, infographics, guides and articles.

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

Dee Brown, CEO of the P3 Group, Inc. – Changing 60,000 Pound Anchors on Nuclear Submarines – and Other Public-Private Partnership Development

Phil is joined in this episode by Dee Brown, CEO of The P3 Group, Inc., a commercial real estate, boutique development and consulting firm that specializes in business and community development through the creation of P3's: public private partnerships.  Dee explains that The P3 Group’s projects are atypical, meaning that they generally take on modestly sized building projects, which most P3 companies shy away from—due to the complexity of the deals and efforts needed to coordinate these types of municipal projects.  For instance, Dee’s first public private project was changing 60,000 pound anchors on a nuclear submarine. 

Phil and Dee discuss the benefits of a company like The P3 Group, with its multi-faceted background of team members that include legal, real estate and construction experts.  Dee goes on to discuss an exciting project that The P3 Group recently received an award for – an 80,000 sq. ft. regional public safety facility for police, EMS, and other governmental emergency responders.  It will be designed to withstand extreme inclement weather, no-power, and no water!  Tune in to learn more.

Dee Brown

As Chief Executive Officer Dee Brown has a 26 year record of real estate sales, development, management, and  success overseeing all phases of  multi-million dollar construction, infrastructure, water/sewer, and  environmental projects for government and private-sector clients. His experience includes managing personnel of up to 200 people in highway/bridge improvements, asbestos abatement, real estate sales and development, solar installations, and a variety of other projects. Dee is backed by strong credentials and a proven history of on-time, on-budget, and high-quality project completions.

Learn more about the P3 Group here:  https://thep3groupinc.com