Despite Slow Start for Commercial Lending in 2017, Exciting Chicago Developments Emerge
Chicago is seeing exciting growth in its West Loop neighborhoods. Areas that were once solely industrial are now seeing people come to them to live and play.
Slow start in 2017 to commercial industrial lending
"For us, on the banking side of things, that's translated to – frankly, overall in the nation – a slow start on the commercial industrial lending totals," said Rod Murray, Group Senior Vice President of Commercial Banking for Illinois, Texas, Indiana and Ohio.
"I read something recently … (it was) the eighth slowest start in the last 32 years," Murray said. "But a lot of that is companies are also being smarter and they're utilizing their inventories, they're pushing things off a little bit. There's still merger and acquisition (M&A) activity going on out there; it's just that it's much slower to happen. It's much slower to get to the altar, so to speak."
Chicago, however, has some things working in its favor
"In Chicago, specifically, we still benefit from the two Ts:, talent and transportation," Murray said. "Of the last five years … of the 330,000-plus jobs that were created, I think 90 percent of them have been in the Chicago metro area. So we benefit from that on both sides of things. But the rest of the Midwest, the rest of the country might not be seeing that same growth."
One of the hottest places in Chicago: Fulton Market, part of the growing West Loop area.
With Google putting its Chicago headquarters here and increasing numbers of people moving to this former meatpacking district, the neighborhood is seeing lots of residential and commercial growth. The West Loop is also the new home to McDonald's corporate headquarters. Now the appeal is trickling westward.
"It's definitely been the hot spot," Murray said of Fulton Market. "And then, you build something like that and everything follows. So again, back to those two Ts we mentioned – the transportation and the talent – and then now you're seeing it in the West Fulton Market, the Kinzie Corridor that's following it, it's an adjacent market there."
The Kinzie Industrial Corridor is an urban industrial and distribution hub bordering the Near West Side and West Town.
"(We're) seeing a lot of food, beverage (and) retail join in, because that can be gotten at a better price than the hot Fulton Market," Murray said. "That's continuing to expand out. Foot traffic is higher. And on top of it in that Kinzie Corridor, you have the grant money that helps through the industrial council that spurs the light manufacturing. Little bit of growth in both, but definitely by far the hottest market."
Fulton Market's success – and spillover – could be a good thing for the surrounding area
"Logic would dictate that," Murray said. "And space availability, development availability, it's the hub and spoke effect. So to the extent that the zoning is appropriate in the adjacent markets around that, then the hub and spoke will continue to grow. First it's going to be this West Fulton Market or the Kinzie Corridor, and after that, who knows on what can be developed or redeveloped per whatever the zoning is around there."