CHICAGO BOOTH INSIGHTS: COVID gives an opportunity to rethink organizations. PAGE 8

CRAIN’S LIST: The area’s biggest commercial real estate sales. PAGE 11 CHICAGOBUSINESS.COM | OCTOBER 19, 2020 | $3.50

BACK TO THE OFFICE Employers are embracing remote work, perhaps permanently. Assuming some people will be back in of ces in some hybrid form, what does that look like?

STORY BEGINS ON PAGE 14

Masking up Pension bond at Abbott Labs creeps into the Hot-selling COVID tests shroud troubles elsewhere BY STEPHANIE GOLDBERG this year, compared to a 5 per- conversation cent decline for a Wall Street Strong demand for novel Journal index of health care and Some see the maneuver as a way out for the city coronavirus tests is propping up life sciences shares. Abbott Laboratories, obscuring But COVID tests can’t carry BY A.D. QUIG

downturns in the company’s Abbott forever. Test sales will BLOOMBERG other business segments. likely level o when a vaccine be- Abbott reported sales of $615 million from its With a global pandemic exac- Without surging sales of comes widely available, pushing COVID-19 diagnostic tests during the second erbating Chicago’s pre-existing COVID-19 tests, the North Chi- the company’s other businesses quarter.  nancial crisis, talk among some cago medical device maker’s 8 into the spotlight. If they’re still aldermen and policy wonks is percent second-quarter revenue lagging, Abbott’s overall perfor- mance in nearly three-quarters of turning to a risky  nancing tactic decline would have been twice mance will worsen. Abbott’s business. with a checkered history in Illi- as bad. Sales are down sharply “We expect there’s going to COVID-19 tests that detect nois: a pension obligation bond. be widespread vaccines current and recent COVID-19 Mayor Lori Lightfoot hasn’t re-

available in the  rst half of infections have been respon- jected the idea. NEWSCOM TEST SALES WILL LIKELY LEVEL 2021, in which case, in the sible for 5 percent growth in Proponents say a pension obli- Mayor Lori Lightfoot OFF WHEN A VACCINE BECOMES second half of 2021, there’s Abbott’s diagnostics business, gation bond, or POB, would ease probably going to be di- which accounts for 24 percent  scal pressure as the city con- state’s pension problems. WIDELY AVAILABLE. minishing demand for a lot of the company’s $32 billion in fronts a $1.2 billion budget gap, Freshman Ald. Matt Martin, of the COVID-19 testing,” annual revenue. Sales of other $31 billion in unfunded pension 47th, argues that City Council in the company’s medical device Morningstar analyst Debbie diagnostics products have been liabilities and a projected $756 deliberations over the mayor’s and drug businesses, and at in Wang says. down during the pandemic million increase in required an- upcoming budget should in- its nutritionals unit. Abbott’s third-quarter earnings amid lower patient volumes. nual pension contributions over clude hearings on a POB. Now Even so, COVID test sales lift- report on Oct. 21 will provide fresh Total sales of COVID tests are the next six years. Critics warn “is the time when we need to ed Abbott earnings past Wall data on trends in the business expected to reach at least $2 bil- that POBs have worsened  scal talk about structural solutions so Street estimates in the second units that have been hurt by the lion this year, William Blair ana- problems for other cities and we’re not just lurching from bud- quarter, helping its shares defy a novel coronavirus.  at data may lyst Margaret Kaczor wrote in a raise the specter of former Illinois get to budget, year after year in tough market for medical stocks. also test investors’ willingness to Gov. Rod Blagojevich’s ill-fated Abbott stock is up 23 percent continue forgiving underperfor- See ABBOTT on Page 22 POB, which failed to solve the See PENSION BOND on Page 18

NEWSPAPER l VOL. 43, NO. 42 l COPYRIGHT 2020 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED CHICAGO COMES BACK GREG HINZ We need to consider In his arguments for social media and how the ‘fair tax,’ Pritzker we use it. There’s a has played into his lot at stake. opponents’ hands. PAGE 4 PAGE 2 2 OCTOBER 19, 2020 • CRAIN’S CHICAGO BUSINESS I’m a ‘yes’ on the ‘fair tax’—despite J.B.’s sales pitch hen it comes to state whether to enact Gov. J.B. Pritz- the rate eectively would be gradu- nances, nothing is clear, ker’s graduated income tax after a al. Instead, I’m referring to Pritzker’s Wsimple or pure. Everyone campaign that can only be called failure to deal with the two biggest has a motive and a constituency butt ugly. problems in Illinois government: GREG HINZ they play to. Everyone has an eye on I’m going to vote for the propo- Mike Madigan and unaordable election—or re-election—no matter sition as the best available way to worker pensions. ON POLITICS what they say. try to ease some of Illinois’ genuine e governor has tiptoed for nigh Remember when Gov. Jim Edgar, scal pain. But Pritzker sure hasn’t unto two years around the power- running for re-election, absolutely made it easy. ful House speaker, even as federal Citadel’s Ken Grin, among the sions. Instead, they signaled they’ll ripped up Democratic nominee e core argument in favor of the prosecutors close in. I understand state’s richest men and someone just raise the current at rate some Dawn Clark Netsch for propos- amendment is, to borrow Pritzker’s why, but that decision will exact who surely has personal reasons to more. In my view, doing that would ing to swap higher state income language, “fairness.” Almost every a horrid price if Pritzker’s prized vote “no.” Arguments such as: e cause signicantly more harm and taxes to fund schools for lower local other state and unit of government tax plan goes down because voters General Assembly will start taxing cause signicantly more people to property taxes, and then proposed that imposes an income tax does so don’t trust crooked Springeld to middle-class people more if the leave the state than would taxing just that—after the election, that is? at varying rates, hitting the well-o spend the money correctly. On pen- amendment passes. No it won’t, millionaires more. Or when then-Illinois Senate GOP harder than those struggling to feed sions, he’s done a little around the because most lawmakers want to is state doesn’t need another their family. e current Illi- margins, but he won’t get behind keep their job. Rauner-style stando. If anything HE’S PLAYED INTO OPPONENTS’ nois Constitution allows only a vote on a constitutional amend- e strongest anti argument hurt this state in recent years, it a at tax, and the amendment ment to cut them, hasn’t bargained is that higher taxes will whack a was Rauner’s government shut- HANDS BY REFUSING TO TAKE ON would let lawmakers change hard enough with unions to make state that already underperforms down, which sent the message to that and impose graduated up some money another way, and economically, encouraging more business that this state’s problems OUR TWO BIGGEST PROBLEMS. rates. guarantees only that unfunded people to leave. But that generally never would be solved. It therefore Unfortunately for Pritzker, pensions will get a teeny slice of the hasn’t happened in the 32 other shouldn’t surprise you that some Leader Christine Radogno struck a that truth has been sort of lost be- proceeds from the graduated tax on states that already have a graduated of the leaders of the anti-gradu- grand bargain with Democrats to cause he’s played into the opposi- wealthy people. Not much property income tax. Beyond that, consider ated-tax movement were close nally end a state budget war, only tion’s hands. Not by secretly plotting tax relief in this deal, either. what will happen if the tax goes Rauner associates. to have Gov. Bruce Rauner spike it to raise taxes on retirement income; Not good enough. down. Pritzker, Madigan, et al., I’m not happy. Neither, I suspect, because it wasn’t perfect? the General Assembly already has But neither are arguments from aren’t going to magically fall to their are you. But I’m going to hold my ese things never are pret- the power to do that, and can do so the foes, amplied in millions knees, crawling to Republicans for nose and vote “yes” for the graduat- ty. Which leads to the subject of by adding so many exemptions that of dollars of TV ads paid for by help in slashing spending and pen- ed income-tax amendment. Why Illinois’ recovery could stall in 2021 hen fear of contagion and the state without a rainy-day fund livelihoods during the pandemic government measures or the ability to rescue struggling will pay the heaviest price. Wto slow the spread of families and businesses. Despite evidence that higher COVID-19 caused many business- Adding a tax hike into the mix corporate tax rates tend to reduce ORPHE DIVOUNGUY es to close, more than 1.3 million will only make matters worse. is investment, and that corporate ON THE ECONOMY Illinoisans lost their jobs. e bulk is because a tax increase would taxes are negatively correlat- of job losses were concentrated negate the impact of federal scal ed with growth and positively among low-income households, stimulus. In addition, sluggish correlated with the size of the minorities and women. economic growth coupled with informal economy, Illinois poli- income tax hike of 2011. During es of their past actions, but Illinois Seven months into the worst mandatory increases in pension ticians also plan to raise the total that time, the average duration of residents should not allow them economic crisis since the Great costs can only mean the initial corporate tax rate by 10 percent, unemployment was nearly two to prolong economic hardship by Depression, 695,000 Illinoisans rates and brackets of the proposed while more than 100,000 Illinois weeks longer for unemployed giving them progressive taxation are still unemployed—three progressive tax aren’t likely to last pass-through businesses will face Illinoisans when compared to powers on Nov. 3. times the number of people who for very long before the state comes up to a 47 percent tax hike if the other Americans. Illinois also saw were looking for work before the looking for more from taxpayers. progressive tax is adopted. record population loss. Crain’s contributor Orphe crisis. And Illinoisans are at risk of If the uncertainty surround- Illinois lost out on roughly Illinois politicians may want to Divounguy is chief economist of prolonged hardship, as economic ing rates and brackets and the 320,000 jobs since the record ignore the economic consequenc- the Illinois Policy Institute. growth is expected to remain slug- possibility the tax amendment gish for years to come. could be used to tax retirees—the 2020 is a year that most of us only growing segment of Illinois’ would like to forget. e country population—were not good was shaken by a global pandemic. enough reasons to reject the pro- Chicagoans faced massive riots posal, the governor’s tax assault that damaged many of their local on small and midsize businesses businesses. ere may not be an- would leave a large number of job seekers unable to At Wintrust, your banker knows you. A GRADUATED INCOME TAX WOULD nd work, therefore worsening before-tax HELP PROLONG ECONOMIC HARDSHIP. income inequality. We understand what’s Income tax hikes other federal stimulus package be- have a negative eect on job cre- fore January, and many businesses ation. Economic research shows a most important. are closing permanently. tax hike on business prots reduces COVID-19 pushed many job creation and worsens inequal- low-income households below ity. Because rms’ bargaining the poverty line and worsened power is high and job openings are the rise in inequality, monopoly scarce, an income tax hike acts like and monopsony power. But if Gov. a barrier to entry: It benets large J.B. Pritzker is successful at giving rms at the expense of marginal state leaders new, far-reaching ones, while taxes on the returns to taxing powers, the economic capital leave everyone worse o. recovery is likely to stall. Illinois Unfortunately, that makes sense. My employees are able to will be home to a more unequal If businesses expect a large decline keep working as a result of your economy as a result. in receipts due to COVID-19 and Illinois’ Achilles’ heel is how it social distancing, while at the efforts on our behalf and I just spends its tax dollars. For years, same time facing an increase in wanted to write to let you know Start the conversation at the state has prioritized public their tax rate, the gain from cre- that I am really grateful. pensions over all else, including ating an additional job falls, thus wintrust.com/meetus. education and social services for reducing aggregate job creation. In – Kenneth Zoll, Zoll-Dental the poor. Still, the price tag for the end, workers will be unem- public sector employee pensions ployed longer, and the low-income keeps growing. Misplaced prior- families, minorities and women Banking products provided by Wintrust Financial Corp. banks. ities and rampant corruption left who disproportionately lost their CRAIN’S CHICAGO BUSINESS • OCTOBER 19, 2020 3 Flipping the switch on door-to-door power sales ICC sta pushes to lift COVID-based ban on the marketing practice

BY STEVE DANIELS  e door-knockers appear set to return. Since the onset of COVID-19, state utility regulators have barred energy suppliers from going door to door to sell households on al- ternatives to Commonwealth Ed- ison, Peoples Gas and Nicor Gas. With much of modern-day unso- licited marketing occurring over cellphones or internet, power and natural gas retailers are among the last businesses to continue in the tradition of encyclopedias or vac- uum cleaners. In recent months, the indus- try has pressed to be allowed to resume in-person marketing in a limited way. But on Sept. 29 they received a gift that went well beyond even their scaled-back SOUTHWEST TURNS UP HEAT ambitions. Seemingly out of the blue, sta of the Illinois Com- merce Commission moved to al- low unsolicited door-knocking, ON UNITED, AMERICAN AT O’HARE arguing that Gov. J.B. Pritzker’s GETTY IMAGES “Phase 4” public-health restric- tions for Illinois didn’t allow the The discount carrier is taking the  ght to United strongholds in Chicago and Houston. commission to continue to bar such marketing. The $9 billion O’Hare expansion project could come out a winner. BY JOHN PLETZ Until then, no supplier had publicly argued for that stance SOUTHWEST AIRLINES is about to start  ying into in 1985. But the announcement is good news for “IT’S HARD TO SEE before the commission. Instead, O’Hare International Airport, making life easier O’Hare, which is embarking on a $9 billion expan- suppliers generally had asked for for travelers in the northern suburbs while mak- sion, adding terminals to go along with the new HOW AMERICAN permission to meet in person with ing it harder for the airport’s dominant carriers, runways built over the past decade. Southwest says AND UNITED CAN potential customers if arranged United and American. the  ights at O’Hare won’t come at the expense of ahead of time, presumably over Southwest, which is the main carrier at Midway Midway, where it is nearing capacity. RESPOND IN A the phone. Airport on the city’s Southwest Side, said Oct. 12 “ is is the biggest story in Chicago aviation Now, however, the suppliers are that it plans to begin  ying out of O’Hare in the  rst in years,” says Joe Schwieterman, who heads COMPETITIVE WAY.” all for resuming in-person sales. half of 2021.  at’s an even more direct competitive DePaul University’s Chaddick Institute for “Competitive energy suppliers John Grant, senior analyst, threat to United and American than Southwest’s OAG steady growth since it started  ying out of Midway See SOUTHWEST on Page 23 See SUPPLIERS on Page 22 Is medical real estate immune to COVID? Physician o ce buildings are still hot properties despite the pandemic

BY DANNY ECKER those paid before the crisis be- from a niche, defensive wa- gan, rent collections have barely ger for investors spooked by a COVID-19 continues to ail felt a pinch and new sources of downturn into a trendy pick. investors in most types of com- capital are looking for a way in. And the Chicago area could be mercial real estate. But many Even the specter of more pa- a big target market with sever- of those that own health care tients receiving medical care al large health systems moving properties are feeling good. virtually and eroding some of quickly to expand their outpa- While the pandemic jacks up the need for in-person treat- tient footprints. vacancy, hampers property val- ment hasn’t scared o real es- “ is pandemic has only in- ues and raises critical questions tate investors, which are betting creased the need for the type about the future of the retail and heavily that the coronavirus will of facilities we acquire and op- hospitality and traditional o ce instead accelerate the trends erate,” says Peter Westmeyer, sectors, medical o ce buildings that have made medical o ces CEO of Chicago-based Remedy have been largely free of those more popular in recent years. Medical Properties, whose  rm

economic symptoms. It’s a signal that health care has more than 20 million square GROUP MEDPROPERTIES Properties are trading at real estate, fueled by a global MedProperties Group is forging ahead with the development of a seven-story medical o ce build- prices similar to or higher than health crisis, is poised to grow See MEDICAL on Page 23 ing next to Oakbrook Center mall on speculation, or without any tenants signed. 4 OCTOBER 19, 2020 • CRAIN’S CHICAGO BUSINESS CHICAGO COMES BACK JOE CAHILL ON BUSINESS Chicago aldermen make a rare display of independence I never expected to nd myself district commissioners—who applauding Chicago aldermen make their living as lobbyists. for standing up to a mayor and Well, that’s exactly the kind of standing behind tough ethics practice that needs to stop. An rules. ocial who depends on lobbying But 2020 has been a strange fees to pay the bills has a powerful year, with many longstanding motive to put personal business assumptions overturned. Case interests ahead of the public in point: A Chicago City Council good. Government is supposed to

committee just rejected a mea- serve the people, not support the BLOOMBERG sure supported by Mayor Lori lifestyles of public ocials. Lightfoot that would have diluted It’s worked the other way a recently enacted ordinance bar- around for too long in Chicago ring lobbying by elected ocials. and Illinois. A recent urry of Passed last December but federal prosecutions has thrown We need to talk about activated just this month, the new light on the depths of corrup- “cross-lobbying” ban prohibits tion here, showing how lobbying elected ocials of other govern- distorts legislative processes to ments from representing private advance private interests at pub- our own social dilemma clients at City Hall and bars lic expense. Chicago ocials from lobbying As indictments roll in, there’s a other jurisdictions on behalf of growing sense that people aren’t Consider social media and how we use it. Leaders, your corporate brand, private clients. Earlier this year, willing to tolerate it anymore. e your culture and your employees’ health is at stake. Lightfoot proposed an exemption aldermen who refused to water for ocials of other governments down the cross-lobbying ban BY EMILY DRAKE AND TODD CONNOR voice. I love drafting messages and that have no pending or recurring seem to realize that city govern- sitting with the content for a while. legislative or contractual matters ment must take strong, sustained Chicago Comes Back is a weekly series on ChicagoBusiness.com provid- ere’s nothing wrong with taking involving the city. action to win public trust. So ing leadership insights to help your business move forward, written by lead- our time, unless you’re in a crisis. Members of the City Council they’re trying to eliminate at least ership consultants Emily Drake and Todd Connor. Committee on Ethics & Gov- one of the sleazy practices that Drake and Connor facilitate Crain’s Leadership Academy. Drake is a li- TC: Nineteen percent of hiring ernment Oversight rejected the have brought government into censed therapist, owner of the Collective Academy and a leadership coach. managers make their decisions proposed amendment by a 17-0 disrepute. Connor is the founder of Bunker Labs and the Collective Academy and is based on information found on vote Oct. 13. In doing so, they But a city that has been synony- also a leadership consultant. social media and 60 percent of mous with corruption Check out previous installments at ChicagoBusiness.com/comesback. employers use social media to vet since the Chicago River candidates. Companies should CITY’S CROSS LOBBYING BAN MUST owed into Lake Mich- Todd Connor: Emily, you and I social media explicitly and have consider oering workshops on STAND, DESPITE MAYOR’S MOVES. igan can’t rehabilitate have been talking about whether a personal and organizational helping their employees better un- its reputation with to discuss social media in this col- strategy around it. ose can be derstand social media, how it’s best defended what’s been called the half-measures. Chicago needs umn, and whether it is a modality separate, by the way. Increasingly, used, how it is manipulated and “boldest” lobbying restriction to go further than other cities in and experience that deserves lead- companies are faced with the reali- how to engage in such a way that of its kind in the country and prohibiting ethically dubious ership consideration. Having seen ty that their employees engage with is productive. As employers look to showed a welcome willingness conduct. It has to eradicate not “e Social Dilemma,” and I know social media in a way that could support their employees through to stick by meaningful reforms at only the appearance of impro- you read “Digital Minimalism”— create brand risk and employee the pandemic, helping them lead City Hall. priety, but the faintest whi of not to mention its eects in our conict and disrupt customer re- their children around use of social “e law passed 10 months ago self-dealing in government. own lives—we came down clearly lationships. e beginning of any media would be particularly ap- by the full City Council is robust Passing the cross-lobbying ban on social media needing a regular solution is admitting you may have preciated. I mean, we’re struggling and historic—there simply are no signaled a serious commitment conversation. a problem. Limiting free speech out here, are we not? other jurisdictions in the United to reform. Paring it back would is not the answer. I think what re- States—let alone in Illinois—that have suggested that commitment Emily Drake: Agreed. Building sponsible adults are learning to ED: We are. And I think we will look prohibit both their own ocials is already fading. One exemption awareness—then intentionality, teach their children is that you back and say that social media had and employees from lobbying on likely would have begotten others, then habits—around our social need to understand the space and profound implications on our hu- behalf of private clients any- reducing the ban to Swiss cheese. media interactions, just like any audience that social media ful lls. man relationships. For managers where, and also prohibit elected No, the ordinance isn’t perfect. other activity that can become an Is it personal? Is it professional? Do feeling ill-equipped because of ocials from other jurisdictions It carves out exemptions for escape and make our lives unman- you actually know, or can you con- their own naivete on the subject, from lobbying before itself on school board members and ageable, social media deserves trol, your audience? One truth I’ll our advice is always the same: Your behalf of private clients,” Steven lawmakers acting as attorneys. space when we talk about leader- oer is that authenticity and inten- job is to set the table for the conver- Berlin, executive director of the But if it’s broad enough to raise ship. And just to set some context tionality, as in all communication, sation and allow the space for peo- Chicago Board of Ethics, said in concerns about going too far, it’s here, we need to think about the will serve us well here. ple to share. Your job is not to have testimony before the committee. a worthwhile step in the right fact that it’s not just whether you all the answers. Leaders—whether Lobbying of government bod- direction. And if it forces people check Facebook, it’s also about ED: Yes, authenticity is import- leading your marriage, your kids, ies by ocials of other govern- to choose between low-level the information you’re consuming ant. Interestingly, most people your team at work, your commu- ments has always been one of the government jobs and lucrative and your kids are consuming, how today understand authenticity as nity—you have a responsibility to smelliest features of Chicago-style lobbying practices, so much the companies are trying to reach their vulnerability, but the dictionary initiate the conversation. It can be corruption. e conict of inter- better. own customers. And, most import- de nition is actually something as simple as, “How’s social media est couldn’t be more glaring. For It’s also encouraging to see al- ant, if we want to talk about the es- dierent: “Not false or copied; gen- working for us? What are our goals? example, an alderman represent- dermen publicly oppose a mayor sence of being social as a species, uine; real,” as well as “representing What are our ground rules?” ing clients in Spring eld has an on a matter of principle. Lightfoot how we are trying to stay connect- one’s true nature or beliefs; true incentive to trade votes on legis- has tried to distance herself from ed during a pandemic. I think of to oneself or to the person identi- TC: is is another awakening, isn’t lation with a state representative Ervin’s defeat but acknowledged entrepreneur Amanda McLernon ed.” at second de nition is ab- it? We cannot simply move for- who lobbies at City Hall. backing the amendment. Perhaps and her #KeepingSocialMediaSo- solutely required, and that second ward, looking at our devices more Yet for some reason, a mayor she made a strategic decision not cial campaign. At its best, it’s keep- de nition is more aspirational, but because they are chirping at us, but elected on a reform platform to wield her full mayoral clout ing us connected to loved ones and people actually need help in how instead we need to pause, consid- worried that the ordinance went on this one. Still, aldermen of the driving stronger relationships with to both be factual and true to one- er and decide. Our answers don’t too far, warning of “unintended ethics committee, led by Chair- our customers. And at its worst, it’s self. What feels right in the moment have to be perfect or even right, consequences.” Lightfoot hasn’t man Michele Smith, deserve driving us apart and misinforming may not be the fullest expression of necessarily, to start. Not making spelled out her concerns, but Ald. credit for showing some inde- us. How are we to think about this one’s true nature or beliefs, so this decisions about how we use social Jason Ervin, who pushed for the pendence. ere’s been too little in the context of leadership? is where I am a big fan of the pow- media, however, may be the only amendment, called it unfair to of that around here over the past er of the pause. When we pause cardinal sin. Your corporate brand low-paid local ocials—like park century or so. TC: Well, I think for better or for we move out of instinct and into is at stake. Your culture is at stake. worse, we have to acknowledge intuition, our most authentic inner Your employees’ health is at stake. Forward to a renewed commitment to community

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20cb0511.pdf RunDate 10/19/20 FULL PAGE Color: 4/C 6 OCTOBER 19, 2020 • CRAIN’S CHICAGO BUSINESS Downtown office vacancy rises amid weakened market Vacancy rose to its highest level in nine years. But the real COVID-19 pain still hasn’t set in.

BY DANNY ECKER More have been sending unsolic- ited proposals to tenants whose Companies moving into new leases are due to expire over the downtown o ces kept the vacan- next few years. “Landlords are not cy rate from surging during the desperate, but they want to make third quarter, but it’s little relief to sure they’re in front of tenants and landlords grappling with fallout are showing their eagerness to from the COVID-19 pandemic. gain an audience.” e share of empty space among o ce properties in the central ABSORPTION GAINS business district rose slightly to It was a dierent story when 15.4 percent during the three 2020 began with the o ce market months ended Sept. 30, accord- coming o its best year for demand ing to data from real estate ser- since before the Great Recession. vices rm CBRE. at wasn’t a big Deals that got done during that change from the 15.1 percent rate leasing bonanza led to compa- midway through the year, but still nies moving in over the past three marks the highest downtown of- months, which helped keep the ce vacancy rate in nine years. direct vacancy rate (which doesn’t e uptick illustrates the ongo- include sublease space) the same ing headaches for o ce landlords as it was midway through the who almost overnight lost a mar- year. Net absorption, which mea- ket teeming with companies hunt- sures the change in the amount of ing for workspace, and who are leased and occupied space com- now wondering whether demand pared with the prior period, was will ever be as strong as it was be- up 173,000 square feet during the fore the crisis began. A tsunami of third quarter, driven mostly by space on the sublease market has companies including Northern also presented formidable new Trust, Convene and TransUnion, competition, and it’s still unknown according to CBRE data. whether companies will need the Kamin says more companies are same amount of space when the starting to have concrete planning pandemic subsides after a long discussions about when and how period of operating with remote they’ll return to o ces, even if employees. they’re not ready to go back in full force. But some company leaders, HISTORIC HIGH? particularly those in the tech sector, What is clear is that a lot of new say they’re not sure the o ces they o ce space is coming to the mar- were in before COVID meet the ket, meaning the vacancy rate health and wellness standards they could soon reach a historic high. want now, according to Kamin. CBRE’s data doesn’t include the “at is a brand new dynam- new 1.5 million-square-foot Bank ic. Many (companies) had health of America tower at 110 N. Wacker and wellness initiatives, but they Drive, for example, which is near- weren’t leading real estate deci- ly 80 percent leased but will add sions or making real estate deci- roughly 300,000 square feet of sions based on those initiatives,” available space when it is added to he says. at could make luring CBRE’s inventory this quarter. tenants even tougher for older at 55-story tower is also pull- buildings, he said, which typically ing close to 1 million square feet of don’t have the hospital-grade air tenants out of other downtown of- ltration systems that some com- ce buildings, leaving big blocks of panies now covet. space behind—most notably the “Just like the gym was some- roughly 800,000 square feet that thing that you could sell in our last anchor tenant Bank of America cycle, the thing that you’re going will vacate at 135 S. LaSalle St. In to sell to your employees and re- the meantime, three o ce build- cruits to get them to come back to ings totaling 450,000 square feet in the o ce is the HVAC system; it’s Fulton Market have been recently the ability to park in the building, completed or are under construc- the fact that they can work from tion without any tenants signed. the (outdoor) deck all day if they e bottom line: Among compa- want to. It’s those types of things nies that are planning to return to that they’re going to want to sell physical o ces in full force, there because it’s going to help recruit are plenty of options. and retain the best talent,” he says. “Tenants who feel comfortable While landlords gauge tenants’ that they have enough data to evolving tastes, they’re also facing make their real estate decisions an onslaught of sublease space right now are beneting from a in the market. Companies trying weakened landlord market,” says to shed o ces on the secondary CBRE Vice Chairman Kyle Kamin, market pushed sublease availabil- who has represented tenants in- ity downtown to 4.5 million square cluding Google and Glassdoor on feet as of the end of September, up their big downtown leases. One 63 percent since the beginning of signal of landlords getting antsy: the year. MORE THAN EVER, OUR CHILDREN NEED US.

Because of COVID-19, hunger has more than doubled. And children are particularly at risk; one in three households with children is facing hunger. As job loss and the continued economic downturn push more people to the end of their resources, many families are having to choose between paying bills or buying food.

In four decades of feeding our community, we have never faced a need so great. WE NEED YOU.

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20cb0514.pdf RunDate 10/19/20 FULL PAGE Color: 4/C 8 OCTOBER 19, 2020 • CRAIN’S CHICAGO BUSINESS

There will be more innovation post-COVID. Here’s why.

e pandemic gives an opportunity Harry L. Davis is the Roger L. to reect on how we use our time and Rachel M. Goetz ince the COVID-19 pan- about the impact of remote work distinguished demic threw our lives into throughout the quarter. While service profes- Sdisarray, we’ve had to pessimistic at rst, they later felt sor of creative change how we do anything in- that their remote situations were management volving other people. Rather actually more ecient and helped at the University of Chicago’s than bumping into colleagues them do better jobs responding to Booth School of Business. in the hall, we have to schedule their clients’ needs. While daunt- Zoom calls around many com- ed at rst, I found that I, too, was peting demands. There isn’t able to deliver my classes eec- much time for the kind of small tively, even if I was tethered to my talk that often, unpredictably, desk chair. leads to big ideas. Once the pandemic is behind Advice for small businesses and entrepreneurs in partnership with ere are benets to handling us, I think Zoom and its ilk will the University of Chicago Booth some tasks over video confer- continue to have an important School of Business. ence. Last spring, I taught a class place for geographically dispersed

in which groups of students take teams or when there’s some ur- GETTY IMAGES on consulting projects with the gent decision to be made. But the guidance of Chicago-based Kear- type of work that delivers innova- motely and what others we should somewhere else to be? I’ve long that often appear inecient, but ney. Consultants spend countless tion will still best be done in per- do in person. encouraged students to see these they’re often quite dicult to re- hours on airplanes to take face- son. It may vary by industry, but I data as valuable, rather than dis- place with technology. to-face meetings with clients, Stanford sociologist James G. bet most people can recall a time miss them because they’re hard to Despite the disruption, the pan- and it’s a big part of their culture. March helped popularize the when a chance meeting with an quantify. demic can be an opportunity to In past years, regular in-person concept of the “ambidextrous acquaintance or a long lunch led It’s also a matter of cultivating a reect on how we can and should meetings and schmoozing were organization” by identifying ex- to a new idea or direction. sense of openness and “adaptive use our time when things are back built into the syllabus. ploitation, which refers to matters In some cases, it’s about collect- curiosity,” a term I’ve borrowed to normal. We may be able to save Of course, none of that was pos- of eciency, renement and exe- ing higher-quality data and lter- from robotics and articial intelli- a lot of time by handling some sible this year. Whiteboard brain- cution, whereas exploration con- ing out noise. Sometimes, these gence. In essence, it means seek- tasks—the exploitative, time-sen- storming sessions became Zoom notes experimentation, discovery data are somatic. Is the other per- ing out opportunities that maxi- sitive, analytical tasks—remotely. calls. and even play. is may prove to son leaning in to hear me better, mize learning. But in the long run, Zoom won’t Curious about their experi- be helpful in considering what indicating interest? Or does their Not coincidentally, these are produce explorative, creative work ences, we surveyed the students tasks we can continue to do re- smile seem forced, like they have exactly the sorts of experiences that keeps organizations vital.

LAST CHANCE TO NOMINATE!

IN TECH ACCEPTING NOMINATIONS! NOMINATIONS CLOSE OCT. 23

Help us recognize up-and-coming leaders in technology in the Chicago area who are making a significant impact at their company and are advancing their industries as well as Chicago as a tech hub. Candidates must have assumed a leadership position outside of their own organization.

Learn more & nominate at ChicagoBusiness.com/StarsInTech

Nomination deadline is Friday, October 23. Section publishes December 14. To view Crain’s nomination programs, visit chicagobusiness.com/nominate. CRAIN’S CHICAGO BUSINESS • OCTOBER 19, 2020 9 w Area home prices are BRIDGING CAPITAL TO REAL ESTATE OPPORTUNITY suddenly rising fast After almost four years of slow housing price growth, epochally low interest rates have juiced the market August, released in late September. BY DENNIS RODKIN It showed an increase in the me- After a few years of minor increas- dian sale price of 11.7 percent, the 2019 DEVELOPER OF THE YEAR es in home prices, the Chicago-area biggest monthly increase in seven Bridge Development Partners, LLC housing market is suddenly seeing years. double-digit growth, largely thanks MRED’s weekly reports for Sep- 16.9+ MSF Completed or Under Development in Chicagoland Since 2000 to super-low interest rates on mort- tember averaged 16 percent ahead gages. of 2019, which suggests the Illinois CHICAGO OFFICES 9525 W. Bryn Mawr Ave., STE. 700, Rosemont, Illinois 60018 “It’s interest rates that are doing Realtors’ monthly report on Sep- 350 W. Hubbard St., STE. 430, Chicago, Illinois 60654 this,” says Erika Villegas, an agent tember, when it arrives this week, with ReMax in the Village, based in will top August’s 11.7 percent. Oak Park. In August, interest rates dropped below 3 percent for the rst time since mortgage giant Freddie Mac started keeping track in 1971. One result is that buyers nd they can aord more, and “feel secure bidding higher,” Villegas says. In recent weeks, she’s been involved MY BENESCH with at least three home sales that closed higher than the asking price. With buyers willing to bid up and shopping eagerly in sectors where inventory is low, such as the tight single-family home market in the city, prices are rising fast. e week that ended Oct. 12 was the ninth consecutive week when the median price of homes sold in the Chicago metropolitan area was up 10 percent or more from a year earlier, according to weekly reports posted by Midwest Real Estate Data. In four of those weeks, the medi- an price was more than 15 percent above where it was a year earlier. is spike comes on the heels of a 41-month stretch when the region’s home prices rarely rose by more than 5 percent from the year be- “ Benesch is innovative and comes up with solutions fore and mostly ran in the 3 percent that work for us—quickly and cost-effectively.” range, according to monthly reports from Illinois Realtors. e median price is the midpoint MEREDITH RITCHIE between the top-priced home and VP, General Counsel & Chief Ethics Officer the bottom-priced one. Movement in the median can be distorted if Alliant Credit Union there is more activity at the upper end of the range, for example. Yet because this regionwide measure reects a few thousand home sales per month, the distortion is mini- mal. In a single town with a dozen or so sales, the median might not be a clear measure of price changes. e surge in median prices is a metrowide gure that doesn’t nec- MY TEAM essarily apply to all homes in all lo- cations. It appears to be concentrat- ed most in lower-priced areas and As an attorney, Meredith Ritchie understands the importance of rst-time-buyer markets, where maintaining a compliant, risk-aware workplace. As a leader, she the expanded aordability that low knows the value of a high-performing team in serving customers interest rates bring would make a www.beneschlaw.com bigger dierence than in auent and meeting organizational goals. markets. Among them: South Cook Coun- ty has at least 20 suburbs where Meredith says working with Benesch has given her both an prices are up in the double digits, on-call resource for labor and employment matters and a and the condo markets in Lakeview, Edgewater and Portage Park, all supportive advocate to help Alliant maintain a positive and frequented by rst-time buyers, are productive environment for its people. seeing it, too. e price hike started abruptly in To learn more about Benesch’s relationship with Alliant, visit mid-August. e median price of homes sold in the week ended Aug. beneschlaw.com/myteam 10 was up about 7 percent from a year earlier, but the next week, growth more than doubled, to a me- dian price that was 16 percent high- er than a year earlier. © 2020 Benesch Friedlander Coplan & Aronoff LLP e jump was reected in Illi- nois Realtors’ monthly report on 10 OCTOBER 19, 2020 • CRAIN’S CHICAGO BUSINESS SPONSORED CONTENT  WEALTH NAVIGATING THE NEW NORMAL: ANTICIPATING PLAN COMPLIANCE CHALLENGES IN THE AGE OF CORONAVIRUS

What changes should plan sponsors make to their retirement programs in response to the Coronavirus Aid, Relief and Economic Security (CARES) Act in the short term, and in response to lessons learned from the coronavirus pandemic in the long term?

e CARES Act and the ongoing pandemic have added to the usual responsibilities associated with retirement plan sponsorship and have created new challenges for plan sponsors on several fronts. At a high level, the CARES Act, signed into law on March 27, includes measures designed to help individuals who need to access to their retirement savings during the pandemic and oers temporary relief from IRS required minimum distribution (RMD) rules.

In the short term, plan sponsors may need to help plan participants “weather the storm” 110 N. Wacker Drive by adopting the provisions of the CARES Act that would provide funds in times of need, such as loosening hardship distribution rules and adding more exible loan provisions. Although pre-retirement withdrawals are typically discouraged, some participants may have little in the way of other savings to see them through the crisis. Any CARES Act provisions that plans adopt will require amendments, which must be made by the last day of the rst plan year beginning on or

L. Rita Fiumara aer Jan. 1, 2022 — for example, by Dec. 31, ECKER DANNY SVP - Investments 2022 for a calendar-year plan. The view looking northeast from the 55th oor. A riverfront walking path along the building. Senior Retirement Plan Consultant Additionally, companies that have been Senior Institutional Consultant negatively impacted by the pandemic may UBS Financial Services, Inc. feel the need to adjust plan contribution 312-525-4593 levels. If your company is considering Look inside Wacker Drive’s [email protected] reducing or suspending employer matching or prot-sharing plan contributions during the crisis, it may be possible to do so. L. Rita Fiumara is an SVP and senior institutional retirement newest office skyscraper But proceed cautiously: You will need consultant with UBS since 1996. to abide by the terms of your plan She has dedicated her career to document, and it may be necessary to make Bank of America Tower debuts with little vacancy after pulling in almost 1 million square equipping plan sponsors with amendments. If your plan is a safe harbor feet of tenants from other downtown buildings. We’ve got a photo tour of the property. best practices that meet their 401(k) plan, for example, you must meet fiduciary responsibilities. Her specic IRS requirements  including the focus integrates plan-design BY DANNY ECKER highest mark in nine years, accord- evator banks as well as the build- consulting with financial provision of a supplemental employee notice ing to data from brokerage CBRE. ing’s hospital-grade air quality— wellness to build effective  before you reduce or suspend matching It would seem to be bad timing, at’s why the developers are es- infrastructure that is now more communication programs around contributions. It is imperative that you opening Chicago’s tallest new pecially happy to have a mostly full top of mind for companies as they robust competitive retirement address any intended changes to your plan to o ce tower in more than three tenant roster at a time when many weigh if, when and how they’ll re- programs that support employee your counsel. decades during a crisis that has downtown landlords are suddenly turn to their o ces. recruitment and retention. raised questions about future de- grappling with a soft market. Ten- Among other features, eleva- e nancial well-being and importance of mand for o ce space and made ants looking for o ces in the city tors in the new tower are called by nancial literacy has become a focal point for people wary about sharing eleva- are now ush with choices thanks scanning a mobile app and limit many employers. A robust nancial wellness tors with each other. to a historic surge of sublease avail- the number of people assigned to program oers both digital and human-delivered guidance for employees Luckily for the developers of ability. And it’s unclear whether a car to four to enforce social dis- to stay engaged so they can build healthy nancial habits and gain more Bank of America Tower, most of demand for downtown o ce space tancing. control over their nancial life. Furthermore, employee education and their new 55-story skyscraper was will ever be as robust after months e tower also includes a guidance need to include leased up when the COVID-19 cri- of companies operating with re- MERV-15 air ltration system relevant and actionable sis arrived. And they’re not sweat- mote employees—some discover- similar to what would be used in items on how to take “ e nancial well-being and ing the elevator challenge, either. ing they can be just as productive. a hospital. control over savings and Chicago-based Riverside In- “My crystal ball is very foggy as “If you can get to our front vestment & Development and it relates to the long-term impli- door, you’re not getting sick in create spending plans importance of nancial Houston-based Howard Hughes cation for o ce space coming out this building,” says Riverside CEO that consider short-term literacy has become a focal completed the building at 110 of the pandemic,” says Howard John O’Donnell. goals and priorities, as point for many employers.” N. Wacker Drive last month with Hughes Interim CEO David O’Reil- Sharing information with ten- well as build safety nets nearly 80 percent of the building ly. “But what I do know is, there’s ants about the building’s air in meeting unplanned rented, according to the develop- still going to be a need for o ces, quality in real time is also crucial health and nancial hardships. Lastly, asset allocation based on age and ers behind the $722 million project. and having a building with the best to rebuild condence in work- time horizon should allow employees who are invested in their employer’s Construction on the 1.5 million- location, the best amenities and ing indoors, says Riverside Chief qualied plan to ignore market returns and policy decisions. e process square-foot tower, which is the tall- the highest commitment to safety Operating O cer Tony Scacco. starts by hiring experienced advisors whose skill set includes understanding est new o ce building downtown and wellness—I still believe that at’s why the building’s mobile ERISA and DOL guidelines. At UBS, we have developed nancial wellness since Two Prudential Plaza opened even if we were half-leased right app will include a platform that solutions to educate employees at all pay and educational levels to identify in 1990, began in 2018 amid a rush now, this building would ll faster shows information about things strengths and weaknesses in their relationship with their money. of demand for downtown o ce than anything else in Chicago.” like particulate matter and car- space, mostly from tech companies at condence comes from bon dioxide levels in the building on local hiring sprees for the city’s both the technology used in its el- at any given time. young, relatively aordable talent. Now it is opening its doors with MORE PHOTOS ONLINE: ChicagoBusiness.com/commercial-real-estate downtown o ce vacancy at its CRAIN’S CHICAGO BUSINESS • OCTOBER 19, 2020 11 CRAIN’S LIST CHICAGO AREA’S LARGEST COMMERCIAL BUILDING SALES Ranked by purchase price. Includes transactions completed between July 1, 2019, and June 30, 2020. 1 2 3 4 5

Sale price Building Property name (in millions) Property type Year built square footage Buyer(s) Seller(s) Listing broker

500 WEST MONROE $412.0 O ce 1992 967,000 Spear Street Capital Piedmont O ce Realty Trust Inc. JLL 1 500 W. Monroe St., Chicago 60661

190 SOUTH LASALLE $230.0 O ce 1986 798,782 Beacon Capital Partners Tishman Speyer JLL 2 190 S. LaSalle St., Chicago 60603

225 WACKER $210.0 O ce 1989 650,812 Spear Street Capital Mirae Asset Global Investments Cushman & 3 225 W. Wacker Drive, Chicago 60606 Wakeeld

PRAIRIE SHORES APARTMENTS $177.0 Multifamily 1958 1,015,000 Farpoint Development; Draper & Kramer JLL 4 2851 S. Martin Luther King Drive, Chicago 60616 Golub & Co.; Goldman Sachs

FULTON WEST $167.5 O ce 2017 290,000 Commerz Real AG Sterling Bay; J.P. Morgan Eastdil Secured 5 1330 W. Fulton St., Chicago 60607 Asset Management

CITYFRONT PLACE $154.0 Multifamily 1991 360,750 Strategic Properties of North DWS CBRE 6 400 N. McClurg Court, Chicago 60611 America; Mirae Asset Daewoo

MARQUEE AT BLOCK 37 $135.2 Multifamily 2016 770,000 Morguard North American CIM Group LP Eastdil Secured 7 25 W. Randolph St., Chicago 60601 Residential REIT

ESPLANADE II $128.5 O ce 1992 583,982 KORE Investments LLC BentallGreenOak JLL 8 3500 Lacey Road, Downers Grove 60515

FORMER TAKEDA PHARMACEUTICAL U.S. HEADQUARTERS $105.0 O ce 2006, 2010 660,000 Horizon Therapeutics Takeda Pharmaceutical Co. Savills 9 One Takeda Parkway, Deereld 60015

THE DECO $107.0 Multifamily 1920 327,642 ESG Kullen 1400 Lake Shore Drive CBRE 10 1400 N. Lake Shore Drive, Chicago 60610 Condominium Residences LLC

THE CLARE $105.0 Health care 2008 700,000 Life Care Services LLC Fundamental Advisors Cushman & 11 55 E. Pearson St., Chicago 60611 Wakeeld

RAILWAY PLAZA $96.1 Multifamily 2000 442,205 Cantor Fitzgerald & Co.; Clarion Partners Moran & Co. 12 507 Railway Drive, Naperville 60563 BH Equities

HUBBARD221 $94.0 Multifamily 2017 173,700 Draper & Kramer Centrum Partners CBRE 13 221 W. Hubbard St., Chicago 60654

HERITAGE VILLAGE POINTE CONDOMINIUM $94.0 Multifamily 1972 77,800 CLK Properties Condo owners Cagan Management 14 10026 Holly Lane, Des Plaines 60016 Group

TWO EAST OAK $92.0 Multifamily 1969 303,620 Strategic Properties of North Condo owners NA 15 2 E. Oak St., Chicago 60611 America

DEER PARK CROSSING APARTMENTS AND TOWNHOMES $90.5 Multifamily 2017 295,472 Redwood Capital Group REVA Development Partners NA 16 21599 Field, Deer Park 60010

THE ATWORTH AT MELLODY FARMS $90.4 Multifamily 2018 319,400 Passco Cos. AEW Capital; Focus Development; Moran & Co. 17 1111 N. Milwaukee Ave., Vernon Hills 60015 Atlantic Residential

UPTOWN LA GRANGE APARTMENTS $89.4 Multifamily 2017 208,500 JVM Realty Corp. The Opus Group CBRE 18 31 E. Ogden Ave., La Grange 60525

905 WEST FULTON MARKET $86.7 O ce 2020 98,000 Deka Immobilien Thor Equities Cushman & 19 905 W. Fulton Market, Chicago 60607 Wakeeld

BURNHAM CENTER $80.3 O ce 1914 584,149 Golub & Co., The Family O ce Co. Shidler Group Cushman & 20 111 W. Washington St., Chicago 60602 Wakeeld

AURORA AT SUMMERFIELD $77.4 Multifamily 2001 NA Cantor Fitzgerald & Co.; The Connor Group NKF 21 1847 Clubhouse Drive, Aurora 60504 BH Equities

THE SHOPS AT OAK BROOK PLACE $75.3 Retail 1996 176,878 RREEF Management LLC Choice Properties Real Estate Mid-America Real 22 2155 W. 22nd St., Oak Brook 60523 Investment Trust Estate Corp.

RENEW ON YORK $75.3 Multifamily 1974 639,216 FPA Multifamily LLC Partnership Concepts Realty NA 23 100 George St., Bensenville 60106 Management Inc.

THE RESIDENCES OF NEWCITY $75.0 Multifamily 2015 208,950 Gelman Management Co. Structured Development LLC; Eastdil Secured 24 1457 N. Halsted St., Chicago 60642 Busbaum Retail Properties; J.P. Morgan Asset Management

930 WEST EVERGREEN $73.3 Industrial 1998 280,500 Greeneld Partners Mars Inc. CBRE 25 930 W. Evergreen Ave., Chicago 60642

Eligible sales are located in the seven-county Chicago area of Cook, DuPage, Kane, Lake, McHenry, and Will counties in Illinois and Lake County in Indiana. List excludes most portfolio sales, dened here as when more than one property is traded for a single price. NA: Not available. 1. Sale represents a 51 percent stake. 2. Square footage includes unit space only. Data provided by CoStar, with supplemental data from CBRE and Cushman & Wake eld; additional research by Crain’s 12 OCTOBER 19, 2020 • CRAIN’S CHICAGO BUSINESS

EDITORIAL Panic will make city’s budget pain worse

obody relishes staring down the it will—Team Lightfoot must quickly gure precipice. Just ask former Fed out how to attract investment again into the Mayor Lori Lightfoot Chairman Ben Bernanke. He city’s core, which will lift the fortunes of the knows what it looks like to gaze entire city, including the neediest neigh- Nright over one. borhoods. Hasty cutting and taxing is not So as Chicago Mayor Lori Lightfoot the answer—and could intensify the cir- plans to deliver to the public what might cling-the-drain sensation the city is already be the worst budget news in the city’s his- experiencing, further spooking investors tory, we urge her not to do what some oth- and causing the sort of damage that will be er mayors early in their tenure might do. In nearly impossible to reverse no matter how other words: Don’t panic. much federal aid eventually arrives. Every scal leader will have to plan Bernanke, who was Fed chairman accordingly for what the pandemic has during the global nancial crisis, has been wrought—a collapsed taxing body that has a strong advocate for helping states in this taken an extraordinary toll on every mu- crisis. He comes to this conclusion after nicipality and state in the country. Even watching what went wrong in the last great so, Chicago’s case is exceptional. Well be- nancial catastrophe in 2007-08. fore the pandemic set in and closed down In a July op-ed that received scant atten- the city and its revenue base, the city’s - tion, Bernanke explained that the lack of nances were tenuous at best. COVID only a nancial plan to help states in the Great intensied the pain. Recession, which decimated state and lo- With Congress locked in a political stale- cal revenues, prolonged the pain far longer mate most likely through Election Day and than necessary. “It’s become abundantly beyond, the prospects for any immediate clear that the responsibility for responding relief that Lightfoot could bake into next to the pandemic cannot lie only with local

year’s budget are dim. IMAGES AP and state governments. Congress must act Add to that the pandemic’s uncertain- decisively—and it must act in ways that ty, including another possible wave of layos and no new additional taxes. Instead, But we urge her to tread carefully over the don’t repeat mistakes of the recent past, infections, and reopening the local econ- expect the mayor, in an eort to appease next few months as the drama continues to during the Great Recession,’’ he wrote in omy seems more elusive than ever, fur- the ratings agencies, to play out in Washing- the New York Times. ther pushing Chicago’s recovery down the craft a budget plan that ton. Communicating At the very least, Treasury Secretary Ste- road. As result of all this and more, Light- could call for substan- THE MAYOR SHOULD DELIVER what the city’s nancial ven Mnuchin has already pledged $300 bil- foot has already set expectations for how tial job cuts and new picture could actual- lion for states and municipalities in his latest deep the pain will go: She’s projecting a taxes on homeowners. THE BAD NEWS THAT NEEDS ly look like with help stimulus oer. Consider that at least a start- $1.2 billion hole in the city’s 2021 budget. Lightfoot will say, TO COME. AND THEN ACT from Congress is going ing point that could result in a signicant in- And yet, the law demands that the may- no doubt, that deep to be critical. Pulling ux of much-needed cash into the city. or deliver a balanced scal plan. cuts and new revenue ACCORDINGLY, LIKE A LEADER. the trigger on massive It is time for the mayor to hone her pub- e mayor is not in the enviable position are what’s called for in city cuts and higher lic relations skills because this situation of her fellow chief executive and onetime such a dire time. And she will be hit hard in taxes earlier than necessary could put the will demand nuanced communication. political rival, Cook County President Toni the arena of public opinion. city on a disastrous course that will be dif- Deliver the bad news that needs to come. Preckwinkle, who this past week laid out a We certainly understand that she’s stuck cult to undo. And then act accordingly, like a leader. relatively rosy budget that includes no mass between a rock and a hard place. When economic recovery comes—and Now’s not the time to panic.

YOUR VIEW Only business leadership can cure what ails city, state have lived in the Chicago lion in revenue. We have oces ment, corruption, criminal behavior and problem of reorganizing and restructuring area my entire life. My father in six cities in the U.S., and we negligent decisions by our political leaders the nances of the state of Illinois and the Icame to Chicago as an immi- raise capital from investors in in creating unnecessary long-term nan- city of Chicago. e business community grant from Poland after World over 200 cities across the globe. cial obligations and parting with precious is the best and only group capable of ad- War II, when he was liberated Our rm is headquartered in infrastructure assets, our state and our city dressing and solving these complex issues from the Dachau concentra- Chicago, and many of our inves- are both in a critical nancial situation. and problems. We need you to join the rest tion camp to start a new life for tors regularly visit our oces on is situation was caused over many years of the business community and insist on a himself. He created that life on Wacker Drive. Our core business by previous political leadership. Gov. the South Side of Chicago in the is to understand the nancial in- J.B. Pritzker and Mayor Lori Lightfoot THE SOLUTIONS THAT MUST OCCUR TO Back of the Yards neighborhood, ner workings of companies and are not to blame—they inherited this where he sold shoes in a store he Theodore L. Koenig plan accordingly for their needs. mess. However, they are the ones that SOLVE THE FINANCIAL PROBLEMS WE maintained for over 40 years. is president and I mention that because our rm must deal with it now, or else they are at life allowed me to attend CEO of Monroe has an important stake in the - currently presiding over the implosion HAVE ARE NOT POLITICAL SOLUTIONS. college, law school and eventu- Capital in nancial health of our state and of our state and city nances. ey will ally start my own business, Mon- Chicago. our city, just as your organiza- become famous for years to come, and not real solution now. We are out of time. We roe Capital. Today, Monroe Cap- tion does. in a good way. have lost more residents in Illinois to out- ital is a $10 billion asset management rm We have a situation today in Illinois e solutions that must occur to solve bound migration than any other state in and a leader in providing debt capital to and Chicago that is unprecedented. We the nancial problems we have are not po- the U.S. in the last 10 years. In the last six middle-market companies throughout the are insolvent in both instances with no litical solutions. ey are not solutions that consecutive years, Illinois led all states in U.S. We currently have over 500 borrowers hope of lling the hole without a massive our governor or our mayor are able to deal the U.S. in outbound migration. We con- in our loan portfolio, all midsize business- federal bailout, which is not in the cards. with or implement in a politically expedi- tinue to lose high-earning residents to es with between $25 million and $500 mil- rough years of nancial mismanage- ent manner. We are faced with the business Florida and other states where they are not

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters Sound o : Send a column for the Opinion page to editor@ to Crain’s Chicago Business, 150 N. Michigan Ave., Chicago, IL 60601, or email us at [email protected]. Please chicagobusiness.com. Please include a phone number for veri cation include your full name, the city from which you’re writing and a phone number for fact-checking purposes. purposes, and limit submissions to 425 words or fewer. CRAIN’S CHICAGO BUSINESS • OCTOBER 19, 2020 13

YOUR VIEW Continued

burdened by our dysfunctional state and worse. ere is precedent for doing this. I believe this is our last and best chance. xing the related pension obligations is a city politics, our corrupt politicians or our New York and Michigan both went through If we cannot solve this, the business lead- fool’s errand. e current ballot measure exorbitant taxes. this type of nancial reorganization and ers are the lucky ones who will be able to that would give our Spring eld politicians We need to implement a business solu- restructuring, and both emerged much leave Illinois. Unfortunately, our teach- more taxing authority and the ability to tion to our nancial problems in Illinois stronger and nancially stable and secure ers, police, re and safety professionals, further raise our taxes without controlling and Chicago. I strongly suggest that we after doing so. nurses and hospital workers, state and spending would be a disaster for our state. form a blue-ribbon committee of Illinois municipal employees, elderly and disad- It has been a disaster for the last 40 years. and Chicago leadership to urge our gov- A UNITED FRONT vantaged are not so lucky. ey, together at fact has not been lost on Illinois res- ernor and mayor, and our elected political If we act united and together, I rmly be- with our minority and lower-income pop- idents. ey have left our state in droves leaders, to put politics aside and appoint lieve that we can address and x the prob- ulation, will face the increased burden of and will continue to do so, now more than and empower a business leader, a nan- lems we have. If we choose to ignore them ever-higher taxes, less government ser- ever. cial czar, together with a committee of top or assume our political leadership will vices and, as a result, more violence and We need to solve our state and city nan- professionals, to nally solve the nancial solve them, then by default we are making crime, higher unemployment, poor edu- cial problems in a cooperative, bipartisan mess we are in. We will need to make some the decision to give up and leave Illinois, cation for their children and less oppor- and apolitical manner. is is a business tough and complicated decisions. ere because the nancial problems will be- tunity. Small business will disappear, and problem that should be solved in a busi- will need to be compromise on all sides. come much worse over time, not better. unemployment will rise to levels that are nesslike manner with a business solution. Compromise only happens however, when Many of us have already voted with our feet not comprehendible. e business community can do this. parties are forced to compromise because and have left the state. Raising taxes now without consider- We can x this together. We must; we the alternative to compromise is much I would like to try to solve the problems. ing lowering state and city spending and have no choice.

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OFFICE “WE’RE LIKELY TO Employers are embracing remote work, SEE A FLIP TO perhaps permanently. Assuming some 70 PERCENT people will be back in of ces in some ‘WE’ SPACE AND hybrid form, what does that look like? 30 PERCENT ‘ME’ SPACE.” By Judith Crown JIM PRENDERGAST, Steve Fireng expects to cut the PRINCIPAL, GENSLER amount of o ce space his com- pany uses by half over the next few years as leases come up. “ e o ce should be used for collaboration, training and celebration,” says the CEO of Schaumburg-based Key- path Education, which manages online degree programs for uni- versities. “You don’t need to be in the o ce every day.” Now that workers have shown they can be productive away from the boss’s eyes, managers have to  gure out how much o ce space

they need and want—and how it GETTY IMAGES will be used. If employees don’t need to be in the o ce to do their “head-down” work, more space will be devoted to collaboration. Instead of 70 per- cent of space devoted to desks or cubicles and 30 percent to meet- ing space, “we’re likely to see a  ip to 70 percent ‘we’ space and 30 percent ‘me’ space,” says Jim Prender- gast, principal at Chicago ar- chitecture  rm Gensler. Managers will have “WE’RE NOT GOING BACK TO WHERE WE WERE— to weigh the temptation to WE’LL ALLOW PEOPLE TO SPREAD OUT A LITTLE MORE.” cut real estate costs against the value of the o ce, which enables JACK MCKINNEY JR., MANAGING DIRECTOR, CUSHMAN & WAKEFIELD a company to grow its culture and fosters the informal water-cooler interactions that yield an insight Crain’s has reported. “If I’m a distractions, and 36 percent said the o ce density that had been or a solution to a problem. CRAIN’S CHICAGO BUSINESS landlord, I’m starting to get a little working from home was stressful. building over the past 10 to 15 Since some form of social dis- worried,” says CBRE Senior Vice “A year ago we thought mil- years. Nationally, square footage tancing is expected to be incor- President Bill Sheehy. lennials wanted the  exibility to per employee decreased from porated even after the pandemic THE BUSINESS OF MOVING FORWARD But not all companies are en- work wherever they wanted to 212 in the fourth quarter of 2009 subsides, people will have to spread amored of the work-from-home work,” says Leah Bruno, Chicago to 192.7 square feet at the end of out. And that could make it harder won’t be back to the way they were. model, saying there’s no replace- o ce managing partner of law 2019—a decline of more than 9 to dump space. If employees aren’t “ e pandemic is allowing us to ment for the formal and informal  rm Dentons. “Sitting here now, percent, according to commercial in the o ce every day, and more throwCRAIN’S out the CHI CAwindowGO BUSINE theSS way conversations that generate ideas we see that younger lawyers have real estate services  rm Cushman space is devoted to collaboration, we used to do things,” says Kevin and break logjams. “Our DNA re- the most to learn. If they’re not in & Wake eld. the trend toward hoteling, or unas- Krumm, CEO of Chicago-based quires us to have that interaction,” proximity of other lawyers, they’re “We’re not going back to where signed seating, could pick up speed. sta CRAIN’S ng THE  BUSINESSrm Objective OF MOVING Paradigm. FORWARD says John Robert Weiss, managing learning it on their own.” we were—we’ll allow people to  e pandemic is accelerating the “Let’s build a new way of doing partner of law  rm Duane Morris’ If employees are going to have spread out a little more,” Jack push on wellness, the top-selling things from the ground up.” Chicago o ce. “You can do Zoom, the option of working remotely at McKinney Jr., a managing director point in the latest wave of new of- but I got tired of those in a month.” least part of the time, the o ce has at Chicago-based Cushman, says  ce construction. Developers tout TIRING OF ZOOM A Gensler survey during the to move from obligation to desti- of o ces in general. state-of-the-art air puri cation sys- With his company’s lease expir- pandemic found that most work- nation, Prendergast says. Consult- tems, terraces or operable windows ing in July 2021 for 32,000 square ers want to return to the workplace, ing  rms mastered that model long REJIGGERED SETUPS for fresh air.  e  tness center now feet at One South Wacker, Henry full time or part time. Only 12 per- ago, drawing their road warriors to Setups of workers “benched” has a yoga studio.  ere’s touchless Shulru , senior vice president of cent want to work from home all come in from the cold on Fridays. at shared tables, common at tech entry using a smartphone. Bike Attorneys’ Title Guaranty Fund, the time. Forty-four percent want  at’s the picture on Fridays  rms and startups, are being rejig- rooms encourage employees to began shopping late last year. to work from home anywhere from at West Monroe Partners, which gered. “We’ve put up a lot of plexi- pedal downtown instead of driving “When the pandemic hit we piv- one to four days a week. features special programs, guest glass barriers and sneeze guards,” or using public transit. oted, buying up laptops, and got Millennials, in particular, are speakers, charity events and food. says David Hall, CEO of Clune Older buildings can be retro tted all our employees settled in their eager to get back.  ey’re stuck in “People crave it,” says CEO Kevin Construction, which specializes in for upgrades such as touchless entry home o ces,” he says. “Now we’re small apartments—they may be McCarty. “It’s never a mandate.” interior buildouts. and better air quality. If the reces- thinking we’ll reduce our space by isolated or competing for space West Monroe won’t need to re- A typical private o ce can’t be sion leaves a glut of o ce space in 25 percent to 30 percent for sure.” with roommates.  e Gensler con gure space, which emphasizes used for meetings because it’s prob- the central business district, some Since the start of the pandemic, study found that despite their spaces to brainstorm and huddle. ably too small, says Joe Learner, vice could be converted to apartments. the amount of sublease space has technological preparedness for But McCarty says the demonstrat- chairman and Midwest region lead And that could turn out to be a plus more than doubled to 4.3 million mobile work, younger workers feel ed e ciency of remote work could at real estate services  rm Savills. in the long run if it converts the Loop square feet, according to CBRE. it’s more challenging to work from change the way consulting func- A private o ce will be downsized, to more of a 24/7 neighborhood. Snapsheet, Flexport and Narrative home compared to their older tions, relieving the weekly com- while meeting rooms will be bigger. Tenants and landlords are tak- Science are looking to sublease peers. Half of Gen Z and millen- muting grind to client sites. “ at medium conference room ing it slow, but it’s clear that things part or all of their o ce space, nials said it was harder to avoid Dispersing workers will reverse has capacity for what a small confer- CRAIN’S CHICAGO BUSINESS • OCTOBER 19, 2020 15 ence room was previously,” he says. ton Market developed by or Equi- It’s a more dicult proposition “ere’s a lot of architectural qual- month’s free rent per year on a Companies are likely to invest ties and QuadReal that is 45 percent to retrot older buildings when it ity and craft you don’t get in new ve- or six-year deal. Now it could in top-quality videoconference spoken for and due to open in the comes to adding terraces or con- builds,” Schulze says. go to eight, nine or 10 months’ setups, which could forestall the spring. A stepped design features verting windows so they can be Tishman is beginning a modern- free rent, he says, as well as more need to y for routine meetings. nine terraces and a sky deck. ere’s opened, says Sheryl Schulze, a ization at 525 W. Monroe St. that tenant improvement allowances. “I go to New York, typically for a tness center with a yoga studio partner at Gensler who specializ- will enable touchless entry through If older buildings struggle to an hour’s meeting, and I’m ex- and bike racks with showers and es in repositioned buildings and a QR code on a cellphone, Felsen- keep oce tenants, they may nd hausted,” Learner says. “I could electric vehicle charging stations. worked on the renovation of the thal says. Fitness centers can be ex- a new life as apartments or condos, see a scenario where 50 percent to Sensors report how eciently space historic Old Post Oce. panded if there’s demand for yoga and that could transform the Loop, 75 percent of my New York travel is being used and can also detect a But landlords can apply tech- and Pilates. Buildings can even which mostly clears out by 7 p.m. is done over Zoom. I can still have problem such as a re or shooter. nology to enhance older air-con- enhance the design and lighting of “It would be nice to have a little that hour meeting and the rest of A few blocks west, Tishman ditioning and ventilation systems. stairwells, “which enables people more liveliness, people walking my day to be productive and not Speyer is a partner in developing a For example, there’s ionization to to get their steps in,” she says. around in the evening, a dierent spend the money and not have the 13-story mid-rise with an advanced clean HVAC systems and UV light- With so much uncertainty, ten- mix,” says Bruno of Dentons, “and carbon footprint impact.” HVAC system, terraces and an in- ing to sanitize rooms. Buildings can ants are biding their time, some- not just the people that have been Even with a permanent shift door/outdoor penthouse. “At some convert entries and bathrooms to times looking for short-term lease at work late and just want to get to more remote work, talk of a 50 point, COVID will be a memory, but be touchless. Bike rooms with locks extensions, brokers say. As is typi- home.” percent cut in oce space usage is the focus on wellness will not,” says and showers expand that commut- cal in a recession, expect landlords Of course, that assumes people overblown, real estate experts say. Nooshin Felsenthal, Chicago-based ing option. Digital boards in the to oer incentives to land or retain will want to live downtown, even e net result could be closer to 20 managing director for acquisitions lobby can report building tempera- tenants, says Sheehy of CBRE. if they aren’t going into a nearby percent or less. and development at Tishman. ture, air quality and other metrics. Normally tenants could get a oce. A oor that used to accommo- date 1,000 people now takes only 750, Prendergast says, and com- panies aren’t going to commit to 30 percent more real estate. “If you determine that on a given day 30 percent of your sta won’t be in the oce, then you’re keeping the same amount of space—it’s a wash.” One arrangement generating tenant interest is a “hub and spoke” YOU HAVE A LEGACY. system in which companies keep a downtown headquarters but lease small satellite oces in the suburbs for groups to meet closer to home. ® “It’s a place for companies to WE HAVE IDEAS. touch down, a company version of a WeWork or Starbucks,” says Brad Metzger, Chicago managing principal of brokerage rm Cresa. is way they escape the isolation of a home oce but don’t have to take the trek downtown by driving or riding public transit. Whether your business is staying in your If people are spending less time in the oce, do they get to keep an family or not, we can help you figure out assigned desk or oce? An earlier the best way to leave a lasting legacy. Gensler study, published before Talk to a First Midwest Financial Advisor today. the pandemic in January, found that people without assigned seats 800.369.4065 are struggling. Data suggests that unassigned seating has a negative WeHaveIdeas.FirstMidwest.com impact on performance and ex- perience. Of the 10 percent of the workforce working via hoteling or “hot desking,” half want an as- signed seat back. “People are creatures of habit and want a place to plant their ag,” says Tom Berarducci, a Chicago-based senior vice president at brokerage rm Colliers. “It increases their connection to the company and its culture.” In addition, employees may worry whether a shared desk and a landline phone are sanitary, even with increased cleaning. But the economics don’t work if companies need to spread out workers and some percentage of employees won’t be in the oce on a given day. A June CBRE survey found that while it may be counterintuitive at a time of heightened safety con- cerns, executives don’t see a future where every employee gets an as- signed workspace. While there is a fair amount of uncertainty, 58 per- cent of respondents said they will adopt some level of “free address” in the future, the survey found.

TAKE THE STAIRS Well before the pandemic, land- lords were touting the wellness benets of newer buildings, a trend that’s accelerating as employers fo- cus on keeping workers safe. Cushman & Wakeeld’s McKin- ney is leasing the 18-story 800 Ful- Advertising Section

PEOPLE ON THE MOVE To place your listing, visit www.chicagobusiness.com/peoplemoves or, for more information, contact Debora Stein at 917.226.5470 / [email protected]

ARCHITECTURE BANKING HEALTH CARE LAW TECHNOLOGY

Perkins&Will, Chicago First Bank of Highland Park, Webster Dental Care, Chicago Fox Rothschild LLP, Chicago HealthChampion, Chicago Northbrook Architecture and design Webster Dental Care Gray Mateo-Harris Brian Shannon has firm Perkins&Will As one of the five (“WDC”), an industry and Kelsey Schmidt been named Managing has promoted largest privately held leading dental represent companies Partner, Sales of Scott Davidson to banks in Chicago, service organization nationally in critical HealthChampion, a lead its Midwest First Bank of Highland with 12 locations, is labor and employment digital health analytics health practice. Park (FBHP) is pleased pleased to announce matters in state and company and creator The Midwest health to welcome Diana the appointment of Chua federal court, Mateo- of the world’s first practice combines the award- A. Jimenez to our Michelle Chua to Chief arbitration, mediation Harris consumer-driven health platform. winning passion and expertise team as Loan Operations Operating Officer. In and administrative With more than 20 years of of healthcare design teams Compliance Officer. As FBHP this role, she is tasked proceedings, including experience with startups and from the firm’s Chicago and continues to expand, Diana with overseeing the full gamut of Fortune 500 companies, Brian will Minneapolis studios, ensuring is responsible for monitoring, the day-to-day discrimination, manage HealthChampion’s sales clients benefit from collaboration analysis, and compliance for all administrative and harassment, retaliation, process from start to finish and among the region’s best loan operations policies and operational functions wage & hour, restrictive serve on the leadership team. He healthcare design, operations, procedures. Diana brings over will also advise on marketing and of the business. Spears covenant, contract Schmidt and planning talent. Scott brings 19 years of banking expertise In addition, WDC and tort litigation as product development, including 25 years of experience and an and comes to FBHP from welcomes Rachel Spears to well as unfair labor practice HealthChampion’s new offerings enthusiasm for life-enhancing Northside Community Bank. the executive team as its first charges and grievance arbitrations. for perioperative care and COVID design to his new role. Human Resources Officer. Rachel Gray has extensive and varied monitoring. is tasked with elevating WDC as expertise developed over a decade the number one dental service prevailing for employers in high- organization in Chicagoland. stakes matters through trial, motion practice or settlement. As a proven diversity and inclusion leader and TECHNOLOGY ARCHITECTURE / DESIGN native Spanish speaker, she partners with clients on internal investigations, Inspirant Group, Naperville Henricksen, Chicago private mediations, sensitive separations, policy implementation, Inspirant Group Henricksen, a Chicago- ENGINEERING / CONSTRUCTION workforce training and D&I. appointed Meighan area contract furniture Newhouse to chief dealership, welcomes Burns & McDonnell, Chicago NON-PROFIT executive officer and Beth Ralston as hired Daniel Lai as Architectural Products Andy Wozniak joins Embarc, Chicago chief operating officer. Specialist. An architect Burns & McDonnell As CEO, Newhouse Newhouse by training with two to lead and grow the Nelly Pitocco, Head of will expand the decades of experience in Global Facilities Group HUMAN RESOURCES Solution Engineering company’s brand commercial interior design and in Chicago. With and Innovation at recognition and project management, Beth brings more than 15 years Alight Solutions, Chicago T-Mobile for Business, continue cultivating large-scale project expertise to of experience, Andy has joined Embarc’s the culture. She Henricksen’s Architectural recently served as design-build Alight Solutions, a Board of Directors. previously served Solutions team. Previously, Beth project executive overseeing a leading provider of next Nelly will support as the chief people served as Senior Project Manager $400 million program portfolio for Embarc’s work to transform level human capital officer and will Lai for CBRE overseeing major tenant a Fortune 500 parcel and delivery and business solutions, Chicago’s education system into bring her people-first projects including the recent corporation. In his new role, he has promoted Kelley the most interconnected and passion to the CEO role, both McDonalds’ headquarters relocation leads integrated design and Michalik to the role of experiential in the country. internally as well as to their to Chicago’s West Loop. construction services for industrial chief marketing officer, Nelly brings over 25 years of clients. manufacturing, life science, charged with accelerating Alight’s experience in Telecommunications As COO, Lai will oversee day-to- air cargo, food and consumer brand presence around the world. and Technology Sales, Solution day operations and prepare the products, and institutional and Kelley will lead Alight’s global Engineering and Operations, and organization for its next phase commercial facility solutions. marketing team including creative a first-hand appreciation for the of growth. He was previously design, demand generation, digital value of coaching, mentoring and the founder and CEO of Project ARCHITECTURE / DESIGN marketing, product marketing, investing in her community. Violet, a boutique consulting firm field marketing, and public relations. acquired by Inspirant Group in Wight & Company, Chicago Kelley has held numerous roles RECRUITING September 2020. At Project Violet, over her 12-year career at Alight he managed large-scale business Wight & Company and its predecessor organizations. Kittleman & Associates, Chicago and technology programs and has appointed Laura developed innovative solutions Batterberry to the Kittleman & Associates around talent development. firm’s Management has named Susan Committee, its Egmont as Senior TECHNOLOGY SERVICES highest level of FINANCIAL SERVICES Counsel and Susan leadership, signifying Barry as Principal. PNC Financial Services Group, Inc., SWK Technologies, Inc., Chicago her achievements over a 20+ year Both are Managing Chicago career. As Director of Architecture, HUMAN RESOURCES Directors of the New Egmont Craig Andrew Smith she leads the design, technical Benjamin Aquino has England market in joins SWK Technologies, aspects and management of a Paylocity, Schaumburg Kittleman’s newly Inc., a national IT group focused on enabling staff been promoted to regional retail sales opened Boston office. consulting firm, as to achieve their best work. With Paylocity welcomes manager for the PNC Egmont, a nonprofit Director of Business respect for all, Laura pushes for Tauhidah Shakir as Mobile Branch, a new executive search Development. In this inclusion, integration and VP of HR and Chief vehicle designed to consultant for 20 years, role, Craig is responsible collaboration across our practice Diversity Officer. make banking easier was previously Principal for relationship management and with a goal to elevate our industry Shakir brings over 20 and more accessible beyond the of Egmont Associates. Barry expanding business opportunities and its impact on our communities. years of experience traditional brick-and-mortar bank Barry, who has served across the Midwest. His expertise in providing strategic branch. Aquino will oversee a in nonprofit executive leadership in business development, sales HR support, developing DEI team of bankers trained to assist positions for 30 years, was and marketing strategy has driven programs and coaching leaders. customers with convenient, on- previously a Partner at Egmont tremendous growth for numerous Shakir’s extensive background site banking and lending solutions Associates. Kittleman & Associates organizations throughout his in helping organizations build and provide financial education is a national executive search career – from the manufacturing more diverse and equitable for designated community firm that specializes in recruiting sector to professional and workplaces will lead Paylocity’s groups. Aquino brings almost CEOs for tax-exempt nonprofit business services. renewed commitment to policies two decades of financial services organizations, public charities and that are focused on education & To order frames or plaques experience to his new role. philanthropic organizations. With awareness, conscious products, of profiles contact the opening of its Boston office, company representation, Lauren Melesio at Kittleman is now represented in advocacy & support, fairness & [email protected] or four cities, with offices in Chicago, equity and community action. 212-210-0707 Philadelphia and Denver. CRAIN’S CHICAGO BUSINESS • OCTOBER 19, 2020 17

Corporations are rushing to help REAL ESTATE AUCTION minority-owned firms. Is it enough? NOVEMBER 18, 2020 Lack of access to funding is among the biggest barriers to growth for Black businesses 13+- ACRES BY WENDELL HUTSON tural Innovation Lab at Morgan Stanley, points to reasons other HIGH VISIBILITY CORNER ON Big corporations are jumping than institutional racism for VCs on the bandwagon to create pro- rarely providing funding to Black- BUSY THOROUGHFARE AT grams to help minority-owned owned businesses and entrepre- STOPLIGHT INTERSECTION businesses. at’s a start, but ob- neurs. servers say access to capital also “(Most often) Black business- IN PEORIA, ILLINOIS must be addressed. es are not large enough in size to is year alone, several pro- attract venture-capital funding, High visibility and high traffic parcel, zoned R-6, grams were launched or expanded venture capitalists do not know on 13+- acres, at 3400 West War Memorial Drive, to assist Black-owned businesses the founders of Black businesses, adjacent to established residential development, near in the Chicago area in improving nor are venture capitalists famil- their operations, from technology iar with some industries Black shopping, restaurants, Route 6 and Interstate 474, to increased funding. businesses focus on,” she says. within 15 minutes of Peoria International Airport. Founders First Capital Partners, One local venture-capital rm is Available for potential senior living center, multi-family Morgan Stanley, Accenture Ven- an exception. Beta Boom, a Black- tures and Google are among the WINTERS TODD owned rm, is providing funding development, office park or combination. Land to be companies with programs geared John Rogers Jr., founder and co-CEO of Ariel to minority-owned businesses. 100% cleared and considerably flat. toward these often small business- Investments “Our mission is to invest in es, which have been hit hard by underrepresented companies by the pandemic. American partners, managing providing funding and business Suggested Opening Bid: $850,000 Most recently, Comcast rolled directors or senior directors at support services,” says Kimmy out its RISE (Representation, In- their firms,” says Rogers. Paluch, Beta Boom’s co-founder Sealed Bid Deadline November 18, 2020 vestment, Strength and Empow- “So if you don’t have people and managing partner. On Nov. erment) program, part of a com- in the room that look like us and 1, Beta Boom will launch New BROKER PARTICIPATION panywide diversity initiative. RISE advocating for us, people are go- Pattern Chicago, a mentorship INVITED will rst focus on Black-owned ing to succumb to that bias. But program that will provide up FOR INFORMATION CONTACT businesses because those compa- if you had Black and Brown peo- to $10,000 in capital to minori- nies have been most aected by ple in leadership roles at those ty-owned businesses as well as Rick Levin & Associates, Inc. | since  the pandemic, says Teresa Ward- firms, you would have indepen- other resources for skill-building 312.440.2000 | www.ricklevin.com Maupin, senior vice president for dent voices that could counter- and coaching. An earlier initiative digital and customer experience at act some of those biases.” was launched this summer in Salt Comcast Business. But a lack of Black leadership Lake City, where Beta Boom has a The $100 million program will at corporations is not the core second oce. allocate $75 million in finan- reason why Black-owned enter- cial support to businesses and prises often fall short when it $25 million in support services, comes to growing revenues and such as media, technology and new business. consulting, “to fight injustice Larry Ivory, president of the and inequality against any race, Illinois State Black Chamber ethnicity, gender identity, sex- of Commerce, says racism is a ual orientation or ability,” says much bigger issue. Ward-Maupin. “ ere were 4 million slaves at the peak of slavery, and the poli- FUNDING cies after slavery left Black people So clearly the will is there. But and Black businesses out of the where’s the money? wealth game because we did not Few lenders, such as ven- own anything,” Ivory says. “And ture-capital firms, have provided since then not much has changed. funding to Black-owned busi- I think these venture-capital ness, according to a recent Mor- rms need to realize that racism gan Stanley study. cost money, and these rms need In fact, less than 1 percent of to develop more sensitivity when venture-capital funding goes to it comes to dealing with Black Black-owned companies, points businesses.” School. Life. Balance. out John Rogers Jr., founder and A study released in September co-CEO of Ariel Investments, a by Citigroup calculated the cost Chicago-based investment firm, of racism. citing the study. “America could have been Teachers teach. Parents parent. Students thrive. “People don’t see us (Blacks) $16 trillion richer if not for in- as business leaders,” he says. equities in education, housing, “They see us as athletes and en- wages and business investment tertainers, but when it comes to between Black and white Amer- Learning Strategies classes and after-school Academic ‘real’ business opportunities, icans over the past 20 years,” the Coaching mean homework is often done before going there’s still this bias there. The study said. people (e.g., foundations, pen- home, leaving space in everyone’s schedule for activities. sion funds and endowments) LOSSES Sports. Music. Friends. Family. Life. who provide capital to venture e study concluded that over capitalists have not held their the past two decades, Black em- feet to the fire. If all those con- ployees lost $113 billion in poten- stituencies told venture-capital tial wages because they couldn’t firms that they needed to work get a college degree; the housing Contact Rachel Spiro, Director of Admissions, and invest in Black and Brown market lost $218 billion in sales to learn more about a school that gets it. businesses, it would have hap- because Black applicants couldn’t pened a long time ago.” get home loans; $13 trillion in [email protected] or 312/610-4900 He added that another reason business revenue never owed VC firms have been almost non- into the economy; and in the next 524 North Wolcott Avenue Chicago, IL 60622 wolcottschool.org existent when it comes to fund- ve years the U.S. could reap $5 ing Black-owned companies is trillion in gross domestic product their management. if it were not for racial gaps. “Venture-capital firms tradi- Alice Vilma, managing direc- tionally have never had African tor and co-head of the Multicul- 18 OCTOBER 19, 2020 • CRAIN’S CHICAGO BUSINESS

æ`ÛiÀ̈Ș}-iV̈œ˜ CLASSIFIEDS Pension bond creeping into the conversation PENSION BOND from Page 1 PENSION PROBLEM To place your listing, contact Claudia Hippel at 312-659-0076 With Chicago’s required annual pension contributions projected to rise $756 million by or email [email protected] www.chicagobusiness.com/classi eds quasi-crisis” about how the city . will make its pension contribu- 2026, some argue a pension obligation bond would help ease the pain. tions in the coming years. CHICAGO PENSION CONTRIBUTIONS POBs work like this: A gov- $2,500 CAREER OPPORTUNITY REAL ESTATE ernment borrows money from STARCOM WORLDWIDE, INC. has an NEW CONSTRUCTION bond investors and hands the opening for VP, DIRECTOR, ADVERTISING WATERFRONT HOMES proceeds to its pension funds 2,000 TECHNOLOGY in Chicago, IL. Manage $2.44 billion NEW LUXURY SUB ON LAKE MICHIGAN to invest. From there, it’s an ar- outsourcing partner for Adtech QA and bitrage play: Officials hope the 1,500 campaign management setup across all digital Located in Traverse City, MI channels. Proactively seek out opportunities Includes a Boat Slip in Lake Michigan pension funds’ investment re- Starting at $1.3M • Call Kyle 231.499.9999 within Media Partners to create e ciency turns exceed the interest due on 1,000 by centralizing manual tasks into the Visit www.PeninsulaShores.com the bond debt. AdTech department. Please send resumes to Former Mayor Rahm Eman- 500 [email protected]. uel pitched a $10 billion POB in Please refer to Job #6630.5401.2. summer 2018. If all went well, 0 AUCTIONS it might have cut the pension ’04 ’05 ’06 ’07’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’20’18’19 ’21 ’22 ’23 ’24 ’25 ’26 funds’ liability to $18 billion 2500 1031 EXCHANGE OPPORTUNITY advertising opportunities available from $28 billion. That rise in ACTUARIAL VALUE FOR ANNUITY AND BENEFIT FUNDS OF CHICAGO the funded ratio would, at least “NNN” WALGREENS early on, have reduced the city’s Funded level Unfunded liability Orland Park, IL/13.75 yr. / $6.975M / 5.6% To advertise contact 2000 Claudia Hippel required pension contributions 23.2% Cap / NNN / Strong Sales /Qualifi ed Investors Municipal Employees $13.28 billion Only / Brokers Welcome R. PETER GIADLA at [email protected] and allowed the pension funds 312 961 1743/ [email protected] 312-659-0076 to make bigger and longer-term 22.3% 1500 investments. To appease rat- Policemen $11.09 billion ings agencies and attract inves- tors, the debt would have been Firemen 18.2% 1000 backed by dedicated revenues $5.12 billion from water and sewer taxes and Laborers & Retirement the city’s share of income and 42.6% $1.55 billion personal property replacement Board Employees 500 OUR READERS ARE taxes from the state. Sources: City of Chicago 2021 budget forecast, pension funds’ 2019 annual valuation reports Emanuel made his proposal 2500 125% MORE LIKELY while he was still considering 2500 0 running for a third term. By De- report from the state’s Commis- Chicago were to issue a POB just 2500 TO INFLUENCE cember, he was on his way out, sion on Government Forecasting before a long stock market slide, 2000 but he urged his successor to & Accountability found returns it could lose money on the deal 2000 OFFICE SPACE take up a POB, arguing the win- through the 2019 fiscal year on for years, warns city Chief Finan- 2000 DECISIONS dow of opportunity was closing the 2003 POBs ranged from 7.05 cial Officer Jennie Bennett. and it could save $200 million in to 7.76 percent, exceeding the 1500 the 2020 budget without creating true interest cost of 5.05 percent. PART OF A PLAN 1500 additional debt. He then left it But even $2,500with interest rates gen- While a POB can reshape the $2,500 for Lightfoot and the council to erally at historically$2,500 low levels, the curve the city is climbing—help- 1000 2,000 1000 consider. city’s poor 2,000 nancial outlook has ing to reamortize the city’s liabil- 1000 2,000 $2.44 billion Conditions for a POB may be boosted its borrowing2,000 costs. Chica- ities and lower the contribution$2.44 billion even better now. The City Coun- go now pays interest rates ranging ramp—Chicago could only $2.44sell billion 1,500 $2.44 billion500 cil’s Office of Financial Analysis from 6.75 to 1,5007.25 percent in taxable the idea to ratings agencies if 500 said in a February report that in- bond markets.1,500 With city pension it’s part of an overall pension re- 500 terest rates were even lower than fund investments1,000 yielding about form plan and does not include 1,000 0 when Emanuel pitched it, and “if 6.57 percent1,000 annually in recent “scoop and toss” debt refinanc- 0 there will ever be an appropriate years, the potential500 re- 0 500 time for Chicago to issue POBs, turn on a POB500 might this would appear to be it.” not be very great. Pro- NOW “IS THE TIME WHEN WE NEED TO 0 In an analysis of more than ponents argue 0the ’04city ’05 ’06 ’07’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’20’18’19 ’21 ’22 ’23 ’24 ’25 ’26 0 ’04 ’05 ’06TALK ’07’08 ABOUT ’09 ’10 ’11 ’12STRUCTURAL ’13 ’14 ’15 ’16 ’17 SOLUTIONS ’20’18’19 ’21 ’22 ’23 ’24 ’25 ’26 4,500 POBs issued by govern- could get lower inter-’04 ’05 ’06 ’07’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’20’18’19 ’21 ’22 ’23 ’24 ’25 ’26 ments between 1992 and 2014, est rates around 5 or 6 SO WE’RE NOT JUST LURCHING FROM 2500 Boston College’s Center for Re- percent. tirement Research—still a POB But the results of BUDGET TO BUDGET.” skeptic—found that pension any POB depend Ald. Matt Martin, 47th 2000 bonds earned an average 1.5 per- heavily on timing and cent return for governments. the direction of stock markets over the course of the ing practices that previous may- 1500 BIG SAVINGS? financing. ors resorted to, Bennett says. According to the Center for Tax & “If the assessment date is the “We want to see ways that we Budget Accountability, a properly end of 2007—the peak of the can convince rating agencies structured POB could save the city stock market—the picture looks that it’s not just about borrow- 1000 billions over the coming decades. fairly positive,” the Boston Col- ing, it’s not just about moving Rather than one big issuance, the lege analysis found. “If assessed out debt, but it’s a lot about how Chicago-based scal think tank in the middle of 2009—right after it is that you’ve reformed and 500 suggests four or ve smaller POBs the market crash—most POBs restructured your liabilities and to reduce market risk. appear to be a net drain on gov- changed it in a way that’s more 2500  e CTBA also warns against ernment revenues. And, as of efficient for city government2500 0 repeating the mistakes that un- February 2014, the majority of overall,” she says. 2500 dermined Blagojevich’s infamous POBs have produced positive Matt Fabian, a partner2000 at Mu- Find your next $10 billion POB in 2003. Rather returns due to the large market nicipal Market Analytics2000 who than depositing all the bond pro- gains that followed the crisis. leads the firm’s market2000 and cred- corporate tenant or leaser. ceeds with state pension funds Only those bonds issued at the it research, says Chicago would to invest, Blagojevich diverted end of the market run-up of the be better off with 1500short-term nearly $3 billion to plug gaps in 1990s, and those issued right be- borrowing. The market1500 swings Illinois’ operating budget. fore the crash in 2007, have pro- over the 20- or 30-year term of “That’s precisely the kind of duced a negative return; all oth- a POB are unknowable,1000 he says. terrible POB design that takes ers are in the black.” It might work out, or1000 could put away from the value of some- Chicago is not as financially the city in a deeper 1000fiscal hole: thing like this,” says Drazzel well positioned as other cities “You can send your 10-year-old500 Feliu, research director at the to withstand market downturns. to take your Ford F-150500 to go pick Connect with Claudia Hippel at CTBA. Poorly timed POBs exacerbated up soda and lunch and500 come [email protected] for more information. But Blago’s bonds did gener- financial troubles in Puerto Rico, back. He comes back fine.0 Was ate arbitrage gains: The latest Detroit and Stockton, Calif. And ` that a good idea?” 0 0 SPONSORED CONTENT

THE CONTACTLESS OFFICE CREATING A SAFER WORKPLACE As the COVID-19 pandemic continues, employers and building owners alike are challenged to keep workers and occupants safe. One approach is the “contactless of ce,” which uses a host of new technologies, practices and procedures, and has been described as the new standard for the modern workplace. Three Chicago executives involved with workplace safety shared their insights with Crain’s Custom Media.

What role does your keep passengers and drivers safer. Prior organization play in creating to the pandemic, work had begun on contactless of ces? several capital projects that will aid in our eorts to provide additional Rocky Donahue: Pace is a hands- safe and socially distant workspaces. on institution—the vast majority of ese projects include new garages in our workforce operates, maintains and Wheeling and Plaineld and expanded services thousands of vehicles in our facilities in Elgin and Markham. eet, and the physical nature of the essential service we provide requires our Walters: Updates to technologies people to be on-site quite oen. Because like radio-frequency identication we’re a long way o from contactless badge readers (RFIDs) and HVAC wrenches and steering wheels, we’re air ltration systems—installed by constantly looking for ways to blend our electricians and contractors long virtual, on-site and hands-on work with before the pandemic—are proving ROCKY DONAHUE MO FAHIM ELBERT WALTERS III innovative safety measures. invaluable as workers return to their Executive Director Practice Leader Director oces. For example, RFIDs can show Pace Suburban Bus ESD Powering Chicago Elbert Walters III: Our members which employees enter certain oce [email protected] [email protected] [email protected] are at the forefront of the technological locations, providing on-demand contact 847-228-4226 312-551-8677 312-989-0724 shi to install contactless components tracing data should there be a COVID to oces throughout Chicagoland outbreak there. HVAC systems can be to ensure that employers and programmed to lter air overnight so employees are as safe as possible when employees return to work in the occupiers to determine their specic technologies and how they can provide resources from their own personal as they return to their workplaces. morning, they’re inhaling fresh air from needs and identify technologies that added value in a work environment. devices. Since mid-March, we’ve added Examples include thermal temperature the outdoors. Germicidal UV lighting are best suited for their spaces and Prior to the pandemic, we deployed touchless thermal scanners in our scanners, automatic doors and new can also be integrated into HVAC circumstances. mobile digital access control and indoor oce while consulting with many of HVAC systems that automatically systems to provide another layer of air quality sensors throughout our our clients on contactless technology circulate fresh air into oce buildings. defense against COVID-19 and other Fahim: Our global headquarters oce, and sensors to help with space strategies for lobbies, elevators, COVID-19 has revealed the need airborne threats. ese small tweaks to in Chicago was designed as a “living optimization. rough mobile apps, restrooms and the overall workplace. for these types of features, but they’ll existing systems can prevent outbreaks lab” to showcase, test and pilot new occupants can seamlessly reserve oce continue to provide value by creating and potentially save lives. healthier spaces long aer the pandemic. Fahim: Smart building solutions such Mo Fahim: We guide our clients as contactless access control, space through a journey of discovery—from utilization, indoor air quality and digital visioning and denition to selection workplace platforms all became hot and implementation. By identifying topics due to the pandemic. ey’ve Driving Chicagoland “OUR GLOBAL HEADQUARTERS IN CHICAGO WAS DESIGNED AS A ‘LIVING to safely return to work. LAB’ TO SHOWCASE, TEST AND PILOT NEW TECHNOLOGIES ...” Safety, service adjustments and transparent MO FAHIM, ESD communication are just a few of the

what’s possible and advising on what’s evolved from being perceived as simply ways we’re driving innovation practical we help clients make informed tools of convenience and on-demand decisions about technologies and experiences to essential elements of to provide a safe commute. systems that are essential for their needs. occupant safety, transparency, health Contactless oces rely on more than and wellness. just the individual components; when there’s a clear plan that’s aligned with What types of technologies are Go to PaceBus.com/Health a company’s culture and operations, you deploying in the effort? investments in the right technologies to learn more and please will foster greater condence among the Walters: Our contractors and workforce to go to the oce. electricians are currently installing wear a mask whilewh riding thermal scanners that read individuals’ What types of improvements temperatures as they enter a building’s public transit. are you working on currently? lobby, RFID badges that enhance security and can help with contact Donahue: We’re tweaking policies to tracing, HVAC systems that circulate restrict room and elevator capacity as outside air into oce buildings, well as the direction of travel in many of touchless elevator and door controls our hallways, stairwells and exits/entries. to minimize surface touchpoints, and We’re erecting physical barriers around other technologies like germicidal UV workstations and replacing temporary lighting to ensure safer workplaces. barriers around operator areas on our Our contractors work collaboratively We’re driven for you. vehicles with permanent shields to with building owners, managers and

P019_021_CCB_20201019.indd 19 10/13/20 9:28 AM THE CONTACTLESS OFFICE CREATING A SAFER WORKPLACE

Donahue: Transitioning some of employees to wear masks. We sanitize members’ work is essential and much personalized technology integrations Members of the Electrical Contractors’ our paperwork-dependent processes our buses thoroughly every day. We set of it has to take place in person, but the between enterprise resource and Association of Chicago (ECA) and to digital forms was a priority even aside certain seats to facilitate greater unionized electrical industry has done HR information systems, workplace IBEW Local 134 are in constant before COVID, but the pandemic social distancing, and we’ve even everything possible to create the safest applications and digital collaboration communication with each other and forced us to think fast and streamline redeployed vehicles from low-ridership possible working environment. platforms can oer that person guidance members about safety protocols and our bureaucracy. An o ce culture routes to more popular routes to ensure for going to the o ce or staying other requirements needed to perform built around face-to-face meetings that buses never come close to being Fahim: Contactless o ce technologies remote, while providing options for jobs safely and reliably. had to learn to use Microso Teams full. All of these changes have required and devices in combination with safely connecting with their team. and Zoom—I’m proud of what we’ve constant communication through clear corporate governance, personal One company that oers a platform to How are you building trust with achieved technologically. With monthly onboard audio, signage, email and text hygiene, cleaning/disinfecting regimen manage dierent protocols is Cohesion, customers that visit your of ces board meetings and annual budget alerts and other media, but it’s paid o— and indoor air quality is where we’re a spin-o of our rm. Its solutions or use your services? hearings fast approaching, improving the we surveyed over 1,000 riders in August focusing our actions as well as the integrate disparate building system and public’s access to virtual meetings has and about 90 percent of them said conversations we’re having with our occupant data sets to oer the most Fahim: Our Chicago o ce’s living lab become our current priority. We’re also we’ve done a good job communicating clients. We have a team dedicated to relevant data for occupants and owners allows us to show visitors how we’re exploring new technologies for cleaning throughout the pandemic. understanding guidance from the from the convenience of their smart implementing technologies and policies. and sanitizing our vehicles and facilities, experts as well as municipal governance phones. Internally, we’re required to go through including ultraviolet lights and fogging. Walters: Safety is one of the core that inuences our o ce policies a daily health verication process before principles the unionized electrical and investments. We utilize multiple Donahue: A cross-functional team going to the o ce. Some of this is How is your organization industry is built upon and that begins at communication tools to keep everyone of leaders from across the agency has trust-based while the touchless thermal protecting your employees/ the IBEW/NECA Training Institute in up to date. advised me throughout the always- scanning is very public. Other ways members/customers in the Alsip where IBEW Local 134 electricians changing process of serving our we build trust to support our culture current environment, and how are trained. It’s there that electrical How are you managing customers and running a company is through transparency of our o ce are you communicating those apprentices are taught to socially different protocols for different during a pandemic and economic environment data. Digital signage— safety measures? distance on job sites and wear proper work environments within your collapse. Everyone’s opinion is which oers real-time updates related PPE such as masks and face shields. On organization? important—not just HR and legal, but to corporate initiative outcomes, indoor Donahue: Public health authorities the management side, Powering Chicago operations, planning, maintenance and air quality and the overall health of view transit as a low-risk activity when contractors are allowing employees to Walters: Every job site and every external relations. is is an all-hands- the organization—helps visitors assess proper precautions are followed, so work from home and have set up new customer has a dierent set of safety on-deck moment and I’m proud to say the level of risk they embark upon we’re going above and beyond to keep o ce congurations to allow for greater standards that our members are ready everyone has risen to the occasion. and empowers them to make the right buses clean. We require all riders and distances between employees. Our to adhere to. Whether it’s maintaining a When we roll out a new protocol or decision for themselves. larger distance between workers on a job restrict some activity that used to be site or wearing various levels of PPE, our commonplace, we all understand that Donahue: We’re transparent with our members are trained to handle any job the rules are subject to change and we passengers and update them whenever “PUBLIC HEALTH AUTHORITIES VIEW site requirement without sacricing on continue to monitor situations even there’s a change. For example, we had TRANSIT AS A LOW RISK ACTIVITY WHEN the quality of work or the time it takes aer they occur. to cut service on 99 routes to free up to complete the job. equipment needed to keep our service PROPER PRECAUTIONS ARE FOLLOWED...” How are you communicating safe; then we had to shut our system Fahim: If a person recently traveled and collaborating with down for the rst time in its history  ROCKY DONAHUE, PACE SUBURBAN BUS to a location on the self-quarantine list, employees as they return to during the unrest that followed the worksites? killing of George Floyd. ese were incredibly di cult decisions, but our Fahim: We have a team dedicated riders understood that we’re all in this to internal o ce governance and together. In fact, commendations for actions to create a safe and productive Pace employees from the public have environment for our employees. With gone up despite decreased ridership o ces in Chicago, San Francisco and and all the di culties that both we New York City and clients throughout and our riders face. We’ve also signed the nation, corporate governance and onto our industry’s Health and Safety adaptability has enabled our rm to Commitments Program. More than 100 stay connected while supporting the transit providers across the country have safety and wellness of our team and gotten together and said, “ese are the clients. We’re piloting virtual desktop best practices to keep our riders safe.” and workspace solutions, incorporating at seal of approval will start appearing technologies to support those looking to on vehicles soon. connect with their teammates, but who aren’t comfortable enough to be in the Walters: Our commitment to better o ce every day from 9 a.m. to 5 p.m. construction has never been stronger than it is today. By choosing a Powering Donahue: Every other week I send a Chicago contractor, our customers can memo out to the whole agency detailing feel secure knowing that the IBEW Local accomplishments and challenges, policy 134 electricians and member contractors Enabling a productive workforce PRODUCTIVESmartSmart & Productive WORKPLACE Workplacorkplacee changes and important reminders; from ECA Chicago have been trained in in a distributed environment. for the rst few months of the crisis, the latest safety protocols needed to do ESD’s expertise in technology and engineering when things were changing more the job right. frequently, I sent it weekly. A good leads to a healthier and connected workforce. portion of the memo is dedicated to What challenges lie ahead as responding to an anonymous online workers return to their of ces? mailbox we’ve set up, where employees can ask questions, submit suggestions, Fahim: Occupancy and space Contactless Indoor Air commend colleagues, and, occasionally, utilization will continue to be a Technologies Quality vent their frustrations to the boss. I’m challenge. Space optimization will be grateful to have such a exible, patient top of mind for owners and operators; Visit esdglobal.com/ProductiveWorkplace and resourceful workforce. We’ve gotten having the right tools and solutions to or call us at 312 456 2233 to explore strategies through our agency’s most challenging manage their portfolios will be essential for a productive workforce in a distributed workplace. year by helping each other and staying to their success. Another challenge focused on the essential service we is the continued low o ce-space provide. occupancy as we begin the heating season. Low occupancy contributes to IMPROVING SOCIETY THROUGH Connected Health & THE BUILT ENVIRONMENT Workforce Wellness Walters: We’ve been in continuous lack of demand on building systems, communication with our members reduced water usage and a host of throughout the pandemic and that need other issues that may develop into for communication has only increased. major problems over the next several SPONSORED CONTENT

“ . . .IBEW LOCAL 134 ELECTRICIANS AND ABOUT THE PANELISTS MEMBER CONTRACTORS FROM ECA ROCKY DONAHUE is executive director of Pace Suburban CHICAGO HAVE BEEN TRAINED IN THE Bus, the Regional Transit Authority division that provides public transportation services to residents of nearly 300 municipalities LATEST SAFETY PROTOCOLS...” in six Illinois counties. A Pace employee since the agency’s ELBERT WALTERS III, POWERING CHICAGO 1984 founding, he has spent much of his career focused on the agency’s external relations. He was named to his current role in 2019 and since the pandemic began has focused on three core months. Continuous remote monitoring it’s a skill we’ve honed over the past principles: safety, transparency and the essential need Pace serves. of facilities using the appropriate 35 years. I’m con dent we’ll continue technology and conducting regular to manage our relationships with assessments with a trusted advisor will stakeholders well. We’ve also conducted help mitigate these risks. employee, business and passenger surveys to gauge the needs and Walters: Because the threat of perceptions of our workforce and those MO FAHIM is practice leader - intelligent building contracting COVID-19 may not fully we serve. technologies for ESD (Environmental Systems disappear before workers return to Design, Inc.), a Chicago-based global consulting- their o ces, how to adapt workspaces Walters:  e leadership of IBEW Local engineering rm focused on the delivery of high- for the current circumstances to keep 134 and the ECA have been in constant performance buildings. In his current role, he shapes people safe is our primary challenge. communication with city, county and the vision of the connected workplace, intelligent We’ve developed a variety of materials state leaders to help build a pathway buildings and the future of commercial real estate properties through the use of to educate building owners, managers out of the COVID-19 pandemic. Our technology and smart building solutions. He joined ESD in 2004 and in 2011 moved from Chicago to and occupiers about how technology unionized electricians and contractors Abu Dhabi for six years to help establish the rm’s rst international of ce. can be deployed to ensure the safest were deemed essential when the possible working environments for pandemic struck in March and have employees. Technologies like thermal continued to help move Chicagoland scanners, RFID and air  ltration systems through these challenging times. have been deployed by our members for many years, but there’s an increased What practices and ELBERT WALTERS III is the director of Powering need for these technologies now to keep technologies do you expect Chicago, an electrical industry labor- Chicagoans safe as they return to their will remain with us after the management partnership of the International o ces. pandemic subsides? Brotherhood of Electrical Workers (IBEW) Local 134 electricians and the Electrical Contractors’ Donahue: All eyes are focused Walters: Systems that  lter fresh Association (ECA) of the City of Chicago. He leads Powering Chicago’s more than 100 on Pace’s budget. We were fortunate air into commercial properties is one annual philanthropic and community impact initiatives and plays a key role in its daily to receive money from the federal example of a technology upgrade that’s operations as the voice of metro Chicago’s unionized electrical industry. He is a longtime member of government that let us continue likely to remain a er the pandemic IBEW Local 134 and formerly served as its business representative. operating despite a massive drop in the subsides. Germicidal UV lighting that’s 6 x 6 Crain's Print Ad.pdf 1 10/6/20 11:33 AM farebox and sales tax revenue we depend gaining mainstream acceptance now on to run. Keeping our system clean and is another example of something that’s safe during the pandemic is not cheap, likely to continue long a er COVID-19. so cutting costs in other ways will be In both of these examples, adding them the primary challenge of 2021. We’re to new o ces or retro tting them hopeful our leaders in Washington will during o ce remodels has long-term continue to acknowledge how important bene ts. We may not be worried about public transit will be to getting through COVID-19 in  ve years, but we’ll this crisis and eventually rebuilding our certainly want as much protection as we region’s economy. can get from more common illnesses like the  u or the common cold and How are you working with we’ll have new awareness about how other stakeholders, such as technology can help. communities, public health of cials, schools, other Fahim: Owners will require better businesses, etc., to plan the tools to measure, track, operate and path forward? optimize their real estate portfolios in real time. Connected IOT sensors C Chicagoland’s Union Electrical Team

Fahim:  rough partnerships with will collect data to enable smarter M our clients, we’ve been involved with decisions about people density, space the rapid conversion of McCormick usage, occupant circulation and more. Y

Place into a COVID-19 alternate care  ese sensors will also help occupants CM facility, devising HVAC strategies for to remain  nely attuned to their MY Northwestern Memorial Hospital, building’s indoor environment and air conversations with school districts about quality performance. Reception and CY distributed learning, and deploying facility sta will be augmented with CMY state-of-the-art touchless technologies autonomous robotics for security and and indoor air quality programs in cleaning, allowing for instantaneous K o ce buildings. We’ve also created sanitization deployments when and smart building strategies and workplace where it’s needed with minimal human technology initiatives, helping our disruption. clients’ key stakeholders build a better path forward from reentry to recovery Donahue: Our ability to and beyond. communicate and collaborate from across a distance has gotten a lot better Donahue: Our community relations over the last few months. Being able representatives are in regular contact to conduct business without reams of with o cials from the 280-plus paperwork will be a boon to sta and municipalities we serve. It isn’t always vendors alike. And studying the way easy coordinating with as many germs spread through our business LEARN MORE AT POWERINGCHICAGO.COM government bodies, businesses and practices and coming up with ways other community institutions as there to stay clean and safe will help us for are in our six-county service area, but countless cold and  u seasons to come.

P019_021_CCB_20201019.indd 21 10/13/20 9:28 AM 22 OCTOBER 19, 2020 • CRAIN’S CHICAGO BUSINESS Power suppliers could soon come knocking MELTING ICEBERG The number of Chicago-area households buying electricity from an alternative SUPPLIERS from Page 3 er advocate Citizens Utility Board, sion during the COVID restrictions supplier to ComEd is at its lowest level since 2012; the number of city house- called on the commission to con- shows how critical door-knock- should not be treated dierent- tinue the suspension of in-person ers are to its success, as well as its holds buying gas from an alternative to Peoples is at its lowest level since 2013. ly than any other industry that is marketing. “is is not the time struggles to retain customers. permitted to sell products in-per- to threaten health through direct For example, Houston-based CHICAGO HOUSEHOLDS NORTHERN ILLINOIS HOUSEHOLDS son under the Phase 4 DCEO transmission or to allow potentially Spark Energy, traditionally one of Households buying gas from a supplier other Households buying electricity from a supplier guidelines and that complies with predatory in-person marketing for the heaviest employers in the mar- than Peoples Gas. other than ComEd. (Data in millions) masking, social distancing, and energy products almost certain to ket of door-knockers and the source other public health requirements,” cost consumers more than the reg- of more customer complaints than 82,913 1.31 74,559 emails Kevin Wright, president ulated utility,” the ling said. any other supplier, saw its custom- 71,320 1.18 1.18 of the Illinois Competitive Ener- e commission is expected to er count in the four-state Midwest 62,731 1.06 1.02 gy Association, which represents act on the sta’s motion within the region, including Illinois, drop 23 56,525 suppliers. coming weeks. percent to 76,000 from 99,000 from e numbers tell the story. e Dec. 31 to June 30, according to Se- number of Chicago households INTERPRETATION curities & Exchange Commission buying natural gas from a rm oth- e sta in its motion said it “be- lings. CEO Keith Maxwell attribut- er than Peoples Gas dropped 32 came aware” on Sept. 16 that the ed some of that loss to the suspen- percent just in the rst nine months state’s Department of Commerce sion of in-person marketing. of 2020, to 56,526 from 82,913 in & Economic Opportunity “had “But we have taken this time to 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 December, according to lings begun to interpret its own guide- reassess our sales strategies, so Note: All data as of December of each year except for 2020. Peoples’ 2020 Sources: Illinois Commerce with the ICC. Likewise, at just over lines to allow in-person solicita- that we can hit the ground running data is through September; ComEd’s 2020 data is through August. Commission reports, filings 1 million in August, the number of tions provided that solicitors wear once they are able to ramp back households getting electricity from masks and proper social distancing up,” he said on Spark’s Aug. 5 earn- a supplier other than ComEd is at is maintained, although DCEO had ings call. tices of luring customers with low- In its annual report assessing its lowest level since 2012. not published such guidance. Sta Constellation, the retail energy cost rates for a brief period and then the retail gas market, released Oct. Buying gas and power from a immediately contacted DCEO and supply unit of ComEd parent Ex- dramatically increasing those costs 1, the ICC noted that many of the non utility rm generally costs con rmed this.” elon, previously employed market- once the teaser expired. natural gas oers posted on its more—often far more—than sim- e governor backs that up. “As ers going door to door. e largest Even so, customers of outside website violate the HEAT act. e ply continuing to get it from the the state has moved to phase four, supplier both nationally and in the suppliers in ComEd’s territory oers continue to include termina- utility, which by law passes the the public health guidelines have region, Constellation says now, “In paid a record 26 percent premi- tion fees for consumers who cancel costs onto ratepayers at no markup. largely focused on creating a new December 2019, independent of um on average for electricity, an their contracts before expiration, e attorney general, which is the normal as we continue to live with the ICC moratorium, we made the amount that collectively totaled something the law prohibits. state’s chief consumer advocate, this virus,” Pritzker spokeswom- decision to cease residential door- $145 million in the year that end- Said the report: “e responsibil- has identi ed door-to-door sales an Jordan Abudayyeh says in an to-door sales and have no plans to ed May 31, according to the ICC. ity of updating oerings on the ICC pitches as frequently misleading. email. “As the public health guid- resume those activities.” e commission doesn’t tabulate website and removing outdated Consumers often believe they’re ance requires, face-to-face inter- A state law to reform the market- how much households taking gas information, such as early termi- saving money when they aren’t. action should only be conducted ing and contract practices of suppli- from nonutility players collectively nation fees, falls on the (supplier); In an Oct. 2 ling with the ICC, with face coverings and appropri- ers went into eect at the beginning overpay. But the vast majority pay however, a number of (suppliers) Illinois Attorney General Kwame ate distance.” of the year. at so-called HEAT act well above the utility’s gas charge, have failed to update the terms and Raoul’s oce, along with consum- e industry’s market share ero- cracked down on the previous prac- which uctuates each month. conditions of these oers.” At Abbott Labs, hot-selling COVID tests shroud trouble in other business lines ABBOTT from Page 1 ry molecular instrument.” And the terms of its launch with the COVID to $1.2 billion in the first half of or so, until we can get some of our pandemic has helped the compa- test.” the year. new launches rolled out.” recent report. Most are molecular ny roll it out to customers. Abbott this month launched its Abbott’s branded generic drug But growth in the segment could diagnostic tests run on the com- CEO Robert Ford recently told seventh COVID test, which is de- sales fell more than 8 percent in continue to slow if the pandem- pany’s “m2000” and “Alinity m” analysts he’s looking to expand ca- signed to show whether patients the quarter as coronavirus spread ic-fueled recession causes birth platforms. Abbott has called the pacity for the system, which could recently were exposed to the nov- in emerging markets like Russia, rates to drop further. latter its “most advanced laborato- “get a really nice jump-start here in el coronavirus based on infec- Brazil and Columbia—which rep- Ford, who succeeded long- tion- ghting antibodies in their resent the most attractive long- time Abbott CEO Miles White in blood. Ford has said he expects term growth opportunities for the April, sounded an upbeat note on demand for antibody testing to business unit. near-term prospects for Abbott’s continue as a way to assess vac- Sales were at in Abbott’s nu- broader portfolio. e company cine-related immune response, tritionals business, which makes expects full-year 2020 adjust- but doctors and analysts question infant formula under brands like ed earnings per share of at least the usefulness of such tests. Pediasure and Similac and adult $3.25, a decline of 1 cent from Medical devices, Abbott’s big- nutritional drinks like Ensure. Ab- 2019 but better than the $2.91 gest business at 38 percent of bott blamed declining birth rates Wall Street was predicting before total sales, plunged 21 percent in China, a key nutritionals mar- the earnings call. in the second quarter. A sharp ket. “As we progressed through the decline in elective procedures quarter, we saw steady improve- at hospitals overwhelmed by SHIFTING CONDITIONS ments in both testing and proce- COVID-19 patients hurt sales of “e market conditions are dure volumes across our hospi- pacemakers, catheters and some shifting there a little bit, and we’re tal-based businesses,” Ford said. devices used to manage chronic continuing to be as competitive as “At the same time, our more con- pain. A bright spot in medical de- we can there with our new product sumer-facing businesses, which vices has been Abbott’s FreeStyle launches,” Ford said on Abbott’s include diabetes care, nutrition +/- 180 ac Industrial 40 Minutes Libre continuous glucose moni- second-quarter earnings call. and established pharmaceuticals, toring system for diabetics, sales “We’ll see that dynamic play out continued to be resilient in this en- From Chicago of which grew nearly 50 percent a little bit here in the next quarter vironment.” LOCKPORT, IL • 301 West 2nd Street 180+/- ac in the Star Business Park, fully zoned industrial, with a fabrication w CORONAVIRUS TESTS PROP UP ABBOTT shop and storage building. CN and BNSF railroads located adjacent to the east and west, respectively, tax increment financing established to help offset Without surging sales of COVID-19 tests, Abbott Laboratories’ 8 percent second-quarter revenue decline would have been twice as bad. certain infrastructure costs, barge access, ripe for development. Buyers may call 800.801.8003 to schedule a drive-thru viewing of the property ABBOTT SALES $16.0 million for the week of October 19-23. No walk-ups will be permitted. Q2 2019 $1.91 billion $3.08 billion $1.11 billion $1.88 billion Auctions: 11am, Fri Nov 20 at Hampton Inn - 165 Remington Blvd, Bolingbrook, IL Q2 2020 $1.99 billion $2.42 billion $1.01 billion $1.88 billion $15.0 million Diagnostics* Medical devices** Branded generic Nutritionals Other Prefer Not to Wait for the Auction? Submit a Pre-Auction Offer! Change: 4.7% Change: -21.2% pharmaceuticals Change: 0.4% Change: -6.0% Change: -8.6% 800.801.8003 • williamsauction.com/Star *Includes $615 million in COVID-19 diagnostic testing sales. **Includes cardiovascular, neuromodulation and diabetes care. IL DANIEL S. NELSON, MANAGING BROKER RE LIC 471.016793 AUCTIONEER: CODY LOWDERMAN AUC LIC 441.001255. BUYER’S PREMIUM MAY APPLY. Source: SEC filing CRAIN’S CHICAGO BUSINESS • OCTOBER 19, 2020 23 Are medical properties immune to COVID? MEDICAL from Page 3 more than doubled between 2012 developer MedProperties Group, and 2017 to $14.7 billion, and why says the emergence of mainstream feet of properties in its portfolio. annual volume has remained virtual care “is probably the rst Buildings that house medical above $13 billion since then, ac- real competitive element that’s practices started drawing far more cording to a July report from bro- come into our world in the last 20 investors over the past decade kerage Jones Lang LaSalle. And years,” but it’s unclear whether it for several reasons. One is demo- more money is pouring in: In 2019, will substantially slow the power- graphic: By 2030, there will be 30 dedicated medical o ce building ful forces driving demand. million more people age 65 and real estate funds raised nearly $7.4 “We’re as surprised as anybody over nationwide than there were billion in capital, 47 percent more at how strong the demand is, in 2012, according to an estimate than they did the year before, ac- pushing all the way through the from the U.S. Census Bureau, driv- cording to nancial data tracking pandemic. It’s been shocking,” ing unprecedented demand for company Preqin. says Campbell, whose company health care. Major health systems, recently broke ground in Bua- meanwhile, have been pushing DEAL VOLUME FALLS lo Grove on an outpatient facility

more services into outpatient fa- e coronavirus threatened to leased to Northwest Community GROUP COSTAR cilities thanks to advances in tech- derail that momentum, with deal Healthcare and is planning an- Chicago developer MedProperties Group recently sold an Edward-Elmhurst Health-leased outpa- nology and new payment models, volume falling during the second other medical o ce building in tient facility at 8 Salt Creek Lane in Hinsdale as part of a $51 million deal. boosting the market for buildings quarter to its lowest mark for that downtown Park Ridge. with the infrastructure to handle period since 2014, according to Campbell is so bullish about ing and snapping up private prac- But that distress could also help clinical testing and lab work. data from real estate investment demand continuing to soar that tices helps, it also leads to redun- medical o ce landlords as hospi- Hospital systems have also been banking rm Hammond Hanlon MedProperties is now seeking dancy of outpatient locations in a tals—which own more than half consolidating and acquiring more Camp. Telemedicine became the permits to build a seven-story, given community, meaning some of all medical o ce buildings na- independent physician groups, norm for patients during those 78,000-square-foot medical o ce leases won’t be renewed. Major tionwide, according to Revista— making massive health systems— months, raising questions about building next to Oakbrook Cen- retail pharmacies such as CVS and turn to selling and leasing back which typically come with a high how much in-person care it would ter mall on speculation, or with- Walgreens Boots Alliance are also real estate to fortify their balance level of credit—the anchor tenants replace permanently. A May re- out any tenants signed. e rm adding more clinical space to serve sheets. of o ce buildings instead of small port from consulting rm McK- landed an equity partner to fund their communities, posing more In one recent deal, Chica- private practices. Seventy-one insey projected that $250 billion— the project, which will be part of competition for certain services. go-based sale-leaseback special- percent of all medical o ce build- or 20 percent—of all spending on a larger $500 million redevelop- Plus, not all health system ten- ist Oak Street Real Estate Capital, ing projects that broke ground last health care in the United States ment of the former McDonald’s ants are winning bets. Some are which is best known for buying year were a liated with hospitals, could be done virtually in the Plaza o ce property. being stretched to the nancial retail and industrial properties up from an average of around 60 wake of the pandemic. “It comes down to what is the brink by low reimbursement rates that are rented back to the sellers, percent during the previous few But it hasn’t taken long for real lowest-cost way to provide care,” from insurers, one reason cited by paid $204 million for a 23-building years, according to health care real estate investors to get over those he says, and “hospitals are go- both Westlake Hospital in Mel- portfolio of medical o ces leased estate research rm Revista. concerns. While property values ing to continue to push more of rose Park and MetroSouth Med- back to West Reading, Pa.-based Locally, growing chains includ- for o ces nationwide were down the simpler, straightforward care ical Center in Blue Island when hospital system Tower Health. ing Amita Health and NorthShore slightly year over year nationwide they’re providing to medical (of- shuttering last fall. e American Many hospital systems have University HealthSystem, as well in July and August, medical o ce ce) campuses.” Hospital Association estimated sold outpatient buildings in recent as academic hospitals like Rush building property values were up in a recent report that hospitals years to generate cash, says Oak University Medical Center, have by 1 percent, according to data HEADWINDS REMAIN nationwide suered “catastrophic Street co-founder Marc Zahr, but invested heavily in outpatient care from research rm Real Capital ere are still headwinds fac- nancial challenges” between the during the COVID-19 crisis, “the both on and o their campuses. Analytics. ing health care property landlords beginning of March and the end of ones that had historically had a All of that helps explain why Matt Campbell, founder of Chi- beyond the rise of telemedicine. June, collectively missing out on stronger view about not doing so sales of medical o ce buildings cago-based health care real estate While hospital systems consolidat- $50 billion in revenue per month. have started to explore it.” Southwest turning up heat on United, American by starting service at O’Hare SOUTHWEST from Page 3 coming into the pandemic, and OAG, a research rm that tracks be more recession-proof than oth- poses an additional threat to poach it gets more of its business from airline schedules. “Southwest has er airlines.” United and American’s customers. Metropolitan Development. “Chi- leisure travel, which is going to re- probably fared better than any- Southwest used to shun hub air- “No one wants a fare war right cago’s airports haven’t seen big cover fastest. e airline is also the one else (during the pandemic). ports of major carriers, opting for now,” says Grant, the OAG ana- strategic moves by the major carri- most dependent on domestic trav- Strategically, if there was ever a cheaper, secondary airports. lyst. “It’s certainly going to test ers in several years. ere’s only so el, which is likely to rebound more moment to muscle into the Big “Gradually they moved into the loyalty of the local market to much more they can do at Midway, quickly than international ying. ree carriers’ home market, those markets,” Schwieterman United and American. Many of and most of the growth is on the “It means more opportunities this is the time. It’s a bold, brave, adds. ”O’Hare serves such a vast the U.S. airlines have extremely other side of town.” for Southwest to grow their busi- strategic move that will probably customer base, you can’t serve all loyal customer bases. ey don’t e Dallas-based carrier is both ness at a time when other airlines work. It’s hard to see how Amer- of Chicago without having a pres- want anyone to come between taking aim at its rivals and making continue to try to gure out how ican and United can respond in a ence at O’Hare.” them and their customers.” the best of a bad situation. With big they can be in an environment competitive way.” Southwest also took aim at U.S. air travel demand still down where business tra c is down 90 Southwest has been success- DOMINANT United in Houston, where it’s 65 percent from normal levels, and percent or more and there is no ful in luring leisure and business Southwest dominates Midway, adding service at Bush Intercon- with new planes from Boeing on international tra c to speak of,” yers, but many travelers in the accounting for more than 95 per- tinental Airport. Southwest does the way, Southwest needs to put says Cowen analyst Helane Beck- northern suburbs have balked at cent of its tra c in normal times, most of its ying from Houston’s those aircraft to work. er. “Southwest has historically traveling to Midway. “For years our or about 260 ights a day. But it smaller Hobby Airport. “Now is the time to do it,” a grown during recessions, and this travelers have asked about bring- has a much smaller market share “United is proud to be Chica- Southwest spokesman says. “We seems to be what they are doing ing service to O’Hare,” the South- in Chicago than United or Ameri- go’s and Houston’s hometown have the planes and the resources.” now, as well.” west spokesman says, adding that can. United ew about 22 million airline, proudly serving custom- Southwest has 250 planes in conversations with airport o cials seats last year, and American pro- ers who y through O’Hare and storage and is scheduled to take EXPERIMENTING predate the coronavirus outbreak. vided about 18 million, according George Bush Intercontinental for delivery of 48 new Boeing 737s by With the industry stuck in a e move will likely benet the to OAG. Southwest ew about 12 more than 100 years combined,” the end of next year. holding pattern, each carrier is ex- nearly $9 billion terminal expan- million. United said in a statement. “We’ll e coronavirus pandemic has perimenting with strategic moves sion at O’Hare, which is in the ear- Southwest declined to say which continue to compete vigorously decimated air travel. United CEO that could tilt the odds in its favor ly stages of design. e downturn markets it will y to, or how many with other airlines at both air- Scott Kirby predicts revenue is like- when demand begins to recover. in air travel has raised questions ights it’s planning. “A lot of the ports, like we do at airports across ly to remain half of normal levels American tested ultralow fares. about whether airport o cials will routes will be the same as we cur- our leading global network.” until a vaccine is widely available. United has begun oering new lei- need to push out the timetable for rently have at Midway,” a spokes- American said of Southwest’s Southwest CEO Gary Kelly says it sure routes to Florida markets from completion beyond 2028. man says. move in Chicago: “O’Hare is an im- could be a decade before business nonhub airports in Boston, Cleve- “is gives the O’Hare expan- Southwest’s ights from Mid- portant hub in American’s global travel recovers. land and LaGuardia in New York. sion a shot in the arm at a di cult way already help keep prices down network, and we remain commit- Southwest had the strongest bal- “It’s a great strategic play,” says time,” Schwieterman says. “South- across the market. By merely oer- ted to our team and customers in ance sheet among the big carriers John Grant, a senior analyst with west will need gates. ey tend to ing service from O’Hare, Southwest Chicago.”

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