TAG’s Holiday Networking Events


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The December Executives Breakfast provided an opportunity for local c-level executives to build new, beneficial professional connections with other Chicago entrepreneurs. We are glad to see local business owners adopting these events as valuable networking experiences. Thank you to everyone who attended!

If you’re interested in attending future TAG events, please email Bill Himmelstein at Bill@TagCommercialBroker.com.

TAG Executives Breakfast Guest List

Sandy Asanovic, COO, The Simons Group

Sam Barhoumeh, Managing Director, Ready Networks

Nirav Batavia, CFA, Co-Managing Partner

Brian P. Brammeier, CEO, Higher Ground

James Chen, President/CEO, Aura Innovative Technology, Inc.

Mason Cole, Founder and Managing Partner, Cole Sadkin

Melissa Costello, Owner, Melissacostello.com

Grant Gochnauer, Co-Founder, Vodori

Jonathan Gregoire, Director of Operations, Webster Dental Care

Jeff Hirner, Founder and COO, One North Interactive

Lisa Kalous, Residential Consultant, Lisa Kalous Group

Stephen I. Lane, Partner, Law Offices of Lane & Lane, LLC

Michael LaVista, CEO, Caxy

Stanton Lewin, Managing Director, Principal

Craig Lowder, President, MainSpring Sales Group LLC

Noah Mishkin, Co-Founder, CraftJack

Anders Norremo, Founder & CEO, Third Party Trust

Ross Petersen, Co-Founder & CEO, Blitsy

Mark Rice, CEO, Energy Connection

Melanie Roberts, CEO, New Sky Strategies

Ann Simms, COO/CFO, American Planning Association

Josh Strauss, Co-Founder, Pekin Singer Strauss

Rosemary Swierk, LEED Green Associate President, Direct Steel and Construction LLC

Hal Tezcan, Startup Port

Timothy Van Mieghem, Partner, The ProAction Group

Nicholas Zagotta, Roberts McGivney Zagotta

 

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2018 Will See Higher Vacancies and New Neighborhoods


2018 Will See Higher Vacancies and New Neighborhoods _ Tenant Advisory Group

All eyes are on vacancies as we head into the new year, as these rates are predicted to continue their increase through 2018. There are a number of factors contributing to this trend, including the emergence of several new properties downtown as well as a few new neighborhoods being developed. Here is a look at some of the trendy topics to pay attention to in the next year.

Rising Interest Rates

The commercial real estate industry will continue to experience an uptick in interest rates, which will make property purchases more expensive. As a result of the higher interest rates, combined with a high volume of buildings trading hands in 2016 & 2017, we can expect to see a decrease of building investment sales and purchases. The rush of corporations moving to downtown Chicago has driven vacancy rates down in recent years. However, we are starting to see the trend towards increased vacancy due to several large new developments coming online.

Trending Areas

Chicago’s reputation as a place to relocate to is growing with the impressive list of large corporations that have already moved downtown and the many more that are in the process of relocating to the city. We are expecting River North and River West to remain in the spotlight. Since there are so many big name businesses located there, many companies want to be in the same area, despite the inflated prices in the hot areas. In 2018, more and more businesses will turn their attention to the budding neighborhoods along the Chicago River, such as Goose Island and the Clybourn Corridor, thanks to several large developments planned by R2 Companies, Riverside Investment & Development and Sterling Bay.

Office Trends

The famously popular trend of an open office with bench-style seating will continue to grow in 2018. However, companies already using this layout have begun to realize its shortcomings. While this office design does increase collaboration, it fails to offer workers a space to concentrate or enjoy privacy which lowers productivity and workplace satisfaction. Employees need offices to concentrate and breakout rooms for privacy to focus on their work.

More and more companies are offering an option to work remotely or with flex hours, as this lowers the number of staff in the office. When fewer employees work in a physical office, the business can reduce square footage and positively impact their bottom line. However, similar to the open-office design, employers are discovering that this rising trend of remote workers and flex hours reduces productivity, lowers collaboration and erodes company culture. Eventually, corporations are reaching the conclusion that having their employees present in a well-designed office space is the most ideal option.

There are a few predictions we can expect to see in 2018: as interest rates rise, the number of  investment purchases will fall; a more tenant-friendly market will emerge due to rising vacancy rates; and office trends will continue to change and adapt as companies find the formula with the best results. At a glance, 2018 has a healthy outlook for Chicago’s commercial real estate market, and as always, it should have its fair share of surprises.

November Networking Events


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The November Executives Breakfast and Luncheon provided an opportunity for local c-level executives to forge valuable connections with other Chicago business owners. We are happy to see local entrepreneurs embracing these events as valuable networking experiences in a relaxed and casual environment. Thanks to all who attended!

If you’re interested in attending future TAG events, please email Bill Himmelstein at Bill@TagCommercialBroker.com.

 

TAG Executives Breakfast Guest List

Lauane Addis, Stahl Cowen Crowley Addis LLC

Richard Bergman, Senior Vice President, Bergman Wealth Management Group

Joseph Brocato, Gozdecki, Del Giudice, Americus, Farkas & Brocato LLP

Steve Brown, CEO, Stratego Partners

Morrie Elstein, VP of Business Development, Cendrowski Corporate Advisors

Matt Gibbs, Co-Founder, UpShow TV

Josh Golden, Founder, Table XI

Jeff Hirner, Founder & COO, One North Interactive

Rhonda Jensen, President, Jensen Litigation Solutions

Lisa Kalous, Residential Consultant, Lisa Kalous Group

Stephen Lane, Managing Partner, Law Offices of Lane & Lane, LLC.

Mark Meyer, President, ICI Staffing/E&M Development

Christopher Miller, Managing Partner, Kelley Kronenberg

Mark Nadolski, Producer & Founder, VES Creative

Dave Norris, Chief Operating Officer, RedRidge Finance Group

Dan Regan, Attorney

Chris Rentner, Founder & CEO, Akouba, Inc.

Ron Repking, CEO, Sriracha

Mark Rice, CEO, Energy Connection

Aalap Shah, Co-Founder, SoMe Connect

Sapan Shah, CEO, Flagship

Hal Tezcan, Startup Port

Tony Wilkens, Owner, AEWilkens Holdings

Will Wright, Managing Partner, Dunmore Capital Partners

Nicholas Zagotta, Roberts McGivney Zagotta

TAG Executives Luncheon Guest List

Stuart Baum, President, LargePond Marketing

Laurel Bellows, Managing Partner, Bellows Law Group

Karen Burmeister, MXOtech

Irwin Cohen, CEO, Affiliated Financial Specialists

Maryann Czarnota, Partner, Abrix Group

Melanie DeCaprio, President, New Sky Strategies

Morrie Elstein, Vice President, Cendrowski Corporate Advisors  

Bill Himmelstein, CEO, Tenant Advisory Group

Jeff Hirner, Founder & COO, One North Interactive

Sandy Marsico, Principal, Sandstorm Design

Margaret Pagel, Vice President of Sales & Marketing, 8th Light

Dan Porcaro, CEO, PSM Partners

Ashish Rangnekar, CEO & Co-Founder, BenchPrep

Mark Rice, CEO, Energy Connection

Kim Robinson, President, Frontline

Jonathan Rothstein, Senior Vice President, MB Financial Bank

John Ruh, Founder, John M. Ruh & Associates

Lindsey Simon, Founder & CEO, Simon Compliance

Joanna Sobran, CEO, MXOtech

Don Tarkington, Managing Partner, Novak & Macey

Megan Wessels, CEO & Connector Extraordinaire, Powerful Partners

Mastering the Lease Negotiation


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The lease negotiation has the potential to provide several, lucrative concessions and rights for the tenant, as long as they are requested and properly defined. What most tenants don’t realize is that most landlord’s are sitting on a pile of money that is available to be allocated towards the incoming tenant in the form of lower rent, free rent, tenant improvement dollars or a combination of the aforementioned concessions. How that money is distributed is determined by the terms stipulated in the lease.

Many believe stronger financials will equate to a more expensive deal. However, the lease revolves around the landlord’s risk of the tenant. A company with a strong financial history represents less risk, which means the landlord will offer better terms to entice the potential tenant. The lease negotiation process is similar to how a bank assigns a loan- the terms are based on the amount of risk. Since the landlord is investing in the tenant, the landlord will often spend money upfront to secure a tenant with the highest probability that they’ll pay rent throughout the entirety of the lease. (If a business goes bankrupt mid-lease, the landlord has the potential to lose a significant amount of money.)

Where many inexperienced commercial real estate negotiators miss opportunities in the lease is by not building in provisions for flexibility. This becomes a critical factor for rapidly growing businesses that often take on far more space than necessary to account for projected growth. While it is smart to plan ahead, at Tenant Advisory Group, we recommend you take on the space you need today with a moderate amount of excess room for planned growth. The reason being is that the office is often the second largest expense of a company. Paying for space that is not being used will unnecessarily burden the financial statements and inhibit a business’ ability to grow. Building in flexibility through rights of first refusal or rights of first offer is a far more effective and economical way to foster a company’s growth. Rights of first refusal and rights of first offer create the opportunity for a business to expand at a future time, if and when necessary.

An extremely valuable piece of negotiation leverage is the right to terminate. This assures a growing business can leave a small space, and move into a larger one when the timing is right. How it works is it provides an opportunity to renegotiate the lease while setting a cap on the rental rate. It can extend the terms of the lease to keep the rent lower than the market rates, and if the market prices drop, you can leverage it to lower rent. Another great piece of leverage is the right to renew, though to be most effective it must stipulates cap on how high the rental rate will be at renewal. Similar to the right to terminate, it allows the company to renegotiate the rent down and prohibits the landlord from renegotiating the terms back in their favor.

In order to obtain the largest concession package, demonstrate strong financial security; request a right of first refusal and/or right of first offer, a right to renew and the right to terminate. When combined, these facets of the lease will significantly improve the quality of life for a business while reducing the strain on the company’s financials.

Bring Cheer to Hospitalized Children with Holiday Heroes


Bring Cheer to Hospitalized Children with Holiday Heroes _ Tenant Advisory Group

As you make your holiday party plans this year, consider how you or your company can help Holiday Heroes bring joy to children in long-term hospital care through sponsored holiday parties. This nonprofit partners with hospitals, businesses, celebrities and others to give children who are hospitalized due to a critical or chronic illness, a well-needed and deserved dose of fun.

Being hospitalized for a terminal, chronic or critical illness is stressful all on its own. Then add not being able to be home or with friends and family for a holiday and that makes it worse. We create events that are always welcomed, appreciated, needed and deserved. Every dollar raised by Holiday Heroes is converted into a smile at these parties. Your support makes an immediate impact at every event that we host.

Additionally, make sure to shop online through the Holiday Heroes “Shopping.Gives” campaign to help the organization earn up to 40 percent. Click here to learn more.

For more information about how you can help, please contact Holiday Heroes.

How to Plan Your Company’s Move


How to Plan Your Company’s Move - Tenant Advisory Group

Relocating an entire office is a daunting task, and business owners rarely have the time to allocate to the process. Thankfully, there are professionals available to guide businesses through the transition, effectively reducing stress and increasing the efficiency of the move. The secret is planning and knowing what to expect, which will greatly increase the chances of a smooth transition.

When considering a relocation, a long lead-up time is imperative. Moving an entire business is a large, involved process with many moving parts that can really disrupt productivity if not planned property. A general timeline to consider is: a company that requires a 10,000-square-foot space should begin their planning 12 to 18 months prior to moving; a 4,000- to 7,000-square-foot space should start nine to 12 months in advance; and a space less than 4,000 square feet should plan at least six months before the move. The longer the lead up time, the less likely there will be major complications, effectively saving the company more money.

Once a business has a timeline established, it’s time to set and manage expectations. Too often this step is overlooked, and yet it is essential in creating a smooth, efficient relocation. While this responsibility largely falls on the broker, the client will need to accept what is possible within their current situation and budget. For example, if a client wants a custom buildout, budgets will need to increase or compromises will have to be made. Unfortunately, there are brokerage firms that will over-promise a client simply to obtain their business, thereby setting unrealistic expectations. This is a dangerous precedent to set, as the client will be left with an unpleasant experience due to a drawn out process, less-than-ideal prices and a higher cost. The best business practice to benefit every party is to establish realistic expectations, then work to exceed them.

Prior to setting foot in a single office space, it’s a good idea to develop a basic layout and checklist of requirements for the new location. Identifying and prioritizing employee activities and needs will help provide the broker with a clear idea of the end goal. Decide how many offices and conference rooms are needed, and how much space should be allocated to each employee. A helpful tip for this process is to think about the day-to-day lives of each employee, as this will provide clues as to what amenities the office layout will need.

Remember that planning the layout of a space isn’t only about the current workforce and day-to-day needs. It’s about creating a template for the business to grow. Consider how large the next office must be, and then identify how much space should be allocated to each department of the workforce (sales, marketing, creative, programmers, accountants, etc.). How many private offices, conference rooms, collaborative spaces and kitchens will the office need, and how much square footage should be allocated to each employee? The process that addresses space requirements is called “benchmarking.” For example, a tech company will have different requirements than a law firm when it comes to design, layout and square footage allocation. A creative agency with 10 employees may want 175 to 190 square feet per person, whereas an accounting firm might want 230 to 250 square feet per person. Effective benchmarking through a discussion with the broker will improve their ability to find the right space that can be perfectly utilized per a business’ needs.

Once the preliminary search has narrowed down a few options of spaces that would be right for a business, this is the perfect time to seek the input of a space planner or architect to discuss the buildout and design plans. Being able to compare space plans among a selection of top contenders will help discern if the exact square footage and shape of each office will be a strong fit. It may depend on the building, but this preliminary planning can typically be done alongside the lease term negotiations. As always, be sure to take advantage of a long lead-up time as well as the resources of a commercial real estate broker in order to acquire that dream office in a smooth manner and at a fair rate.

Bill Himmelstein Named to Crain’s Chicago Business CRE Ranking


Bill Himmelstein Named to Crain’s Chicago Business CRE Ranking - Tag (1)

Crain’s Chicago Business released its inaugural edition of The Most Influential Commercial Real Estate Brokers in Chicago, and our own Bill Himmelstein has been included in this list!

The new list represents an impressive cross-section of the Chicago-area commercial real estate sales community, many of whom have practiced with distinction for decades. Click here to read about how Bill grew Tenant Advisory Group to one of the best in the city.

TAG’s October Networking Adventures


TAG’S OCTOBER NETWORKING ADVENTURES - Tag

The October Tenant Advisory Group Executives Breakfast and Executives Luncheon saw quite the turnout! Attendees from a variety of industries came together to build their individual networks and learn how they can work together to enhance their business results. Thanks to all who attended!

 

TAG Executives Breakfast Guest List

Faheem Ahmad, COO, Technical Doctor

Sam Barhoumeh, Managing Director and CEO, Ready Networks

Rob Bisceglie, CEO, Action for Healthy Kids

Jon Borg-Breen, Co-Founder, Symbiont Group

Erryn Cobb, Co-Founder, Fetch Public Relations

Gina Cocking, Managing Director, Colonnade Securities LLC.

Kim Eberl, CEO, Motion PR

Jonathan Eisler, Managing Director, Perspectives Organizational Consulting Group, President, Association of Consultants to Nonprofits

Adam Glazer, Managing Partner; Schoenberg, Finkel, Newman and Rosenberg, LLC

Mitchell Gordon, Co-Founder, Bradford and Gordon, LLC

Jeff Hirner, Founder and COO, One North Interactive

Eric Lazar, Partner and Lead Evangelist, SpeedPro Chicago Loop

Stephanie LoVerde, Jameson Sotheby’s

Tyler Mose, CEO, Indirap Productions

Sagar Pandaya, CEO, Middleground

Grigory Pekarsky, Managing Broker and Partner, Vesta Preferred Realty

Dan Porcaro, CEO, Porcaro, Stolarek and Mete, LLC

Jason Randolph, CEO and Founder, Savant

Paul Raya, Attorney, Cook Alex

Scott Seagren, Vistage Chair

Robert Szafaraowicz, Vice President, Buzz

Jeremy Waitzman, Partner, Walker Morton LLP

Michael Ward, Riley, Safer, Holmes and Cancila LLP

Greg Woodard, Principal, Solve

 

TAG Executives Luncheon Guest List

Jon Adler, Managing Partner, Adler Law

Stuart Baum, President, LargePond Marketing

Bob Berland, President, Berland Communications, Co-Founder, Hire Elite Athletes

Bill Bolotin, Partner, Funkhouser, Vergosen, Liebman and Dunn

Brad Factor, President, Chicago Messenger Service

Jerry Holisky, Managing Partner, AGDG

Rashod Johnson, President and Owner, Ardmore/Roderick Group

Michael LaVista, CEO, Caxy Interactive

Kim Robinson, President, Frontline

Sapan Shah, CEO, Flagship

Ann Simms, CFO & COO, American Planning Association

Karen Villaflor, President, Algonquin Bank

Chicago’s Next Top Neighborhood


CHICAGO'S NEXT TOP NEIGHBORHOOD - Tag

The South Loop, River West and West Loop each have taken their turn as being Chicago’s “it” neighborhood. Now it’s time to turn our eyes towards the Clybourn Corridor, the thin strip of land on the western edge of Lincoln Park between Clybourn Ave. and the Chicago River. This area already serves as a main shopping destination for Northsiders, and the recent addition of Newcity is part of a continuing trend in this area. There are many developments currently in progress with many more slated to come online for the near- and long-term future.

High Demand

The Clybourn Corridor is currently exploding with new developments planned and in progress. Despite the rising vacancy rates from the influx of new buildings, retail rent has remained steady and even reached higher levels in recent years. This stretch of well-located land is continuing to attract businesses, both large and small, and they are not shying away from the increasing rents. With retail, professional and residential buildings on the dockets, the Clybourn Corridor has the attention of the city.

Room to Grow

In the last five years, over two million square feet of commercial real estate space has come online with over 1,000 new residential units. Even with the high amount of proposals, there is plenty of room for development and redevelopment in the Clybourn Corridor. Most famously, the Finkl & Sons steel plant is one of the headlining redevelopment projects. Sterling Bay has recently unveiled their vision for the redeveloped Finkl & Sons steel plant which includes a mixture of office, retail and residential buildings to be built on over 30 acres of riverfront property.

A Fresh Start

One driving factor behind the surging demand to reshape the Clybourn Corridor is its ability to act as a blank canvas. Large developers are purchasing old properties with dated buildings and redeveloping these sprawling sites into efficient retail, office and residential buildings. Its extreme demand is also fueled by the dense nearby population and affluent neighborhoods near the Clybourn Corridor, which attracts shoppers and businesses. Additionally, Metra plans to update their Clybourn train station to match the rapid updates the area is receiving. The proposals to revamp the community expects to draw a large, new employment base and add thousands of residents, all creating a positive influence on Chicago’s economy.

Chicago’s real estate industry continues to grow as a plethora of new buildings come online each year. The city’s lively entertainment scene, attractive amenities and its role as a booming international business hub make it a highly sought after location for corporations, and the employees who work for them. It will be exciting to watch the plans for the Clybourn Corridor unfold into a redeveloped, bustling stretch of Chicago.

How to Find the Right Office for a Startup


HOW TO FIND THE RIGHT OFFICE FOR A STARTUP - Tag

Startups, by nature, are always changing, and the last thing a budding business needs is to constantly search for and move into new spaces. As a company grows in both size and revenue, the physical office space will need to provide the flexibility to house the necessary changes (e.g. additional computer stations, conference rooms, etc.). Here are a few pointers to consider when looking for a location to help the business stay put longer.

Consider Rapid Growth

In order to avoid overcrowding an office, search for an office space that accounts for reasonable projected growth. Oftentimes, an extra ten or twenty percent of space can prevent a lot of issues from arising. While it may seem like an unnecessary expense, it has the potential to provide greater returns in the future by avoiding terminated lease fees as well as eliminating the hassle and expense of needing to sublease and seek a larger space before the lease expires. One way to compensate for the increased rent expense could be to use that extra square footage as leverage to receive better lease concessions, such as more rent abatement, tenant improvement allowance or termination rights.

Consider the Location

When it comes to real estate, the location of the property will play a critical role in the success of the business. You’ll want to consider the office’s location in regards to current and potential clients, vendors and employees. If the space is hidden, it’ll make it difficult for prospective clients to find the business. The location will also play a role in employee retention and talent acquisition. An office that is far out of the way will reduce company morale, and will be unattractive when trying to acquire top talent. It will go a long way in increasing employee happiness if the location is near quality amenities, such as trendy restaurants and entertainment.

Consider Your Needs

A critical aspect that should be heavily considered during the search is the layout of the office and its amenities. Does it fit the company brand and culture? A financial services startup may need a more structured environment with cubicles and sound proofing. Whereas a creative firm will want an office with open spaces for collaboration. Regardless of the industry, the layout should be conducive to the business. Also, the amenities of the office should play an important role in the selection process, as they can make a difference in employee morale, which will impact productiveness of the workforce. Will there be enough conference rooms, kitchens, restrooms or break rooms? Confirm if the space will be able to accommodate the specific needs of an industry. For example, a company with heavy IT needs will want a space that is able to power and protect all of the equipment.

Finding an office that is a perfect fit for a business is a challenge, especially for a rapidly growing startup. When beginning the search consider the projected growth, business plan and the needs of the company to find the best suitable space. The office search is a daunting task that should be tackled with a long lead up time, preferably one year in advance. The long lead time works in favor of the tenant, and is necessary to account for the lengthy processes of site selection, touring comps, term negotiation, attorney review and architectural design, permitting or construction work. Working with a qualified commercial broker can save a growing business tremendous time and money throughout the leasing process.

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