Third Largest Metropolitan Area in the Nation. The Chicago Metro population trails only New York City and Los Angeles in size and has a wealth of Intellectual Capital
- The number of corporate headquarters in Chicago is second only to New York City.
Large, Diverse Employment Base
- Chicago’s work force of more than 4.4 million individuals is employed in an array of industries.
Geography:
The greater Chicagoland area, bounded to the east by Lake Michigan, expands over 5,000-squaremile region in northeastern Illinois. The city of Chicago is generally flat, with the Chicago and Calumet rivers running through the municipality.
The Chicago Economy is Strong
The Chicago metro’s economy is one of the largest in the nation and will grow 3 percent this year. GMP and retail sales are rising and it’s long term average remains mostly on part with the national rate.
Chicago’s centralized location, educated workforce and relatively affordable cost of living compared with the coasts attract many businesses. Today, 32 Fortune 500 companies are headquartered in the Chicago metro area including Boeing, McDonald’s, Walgreen, Allstate, Abbot Labs, United Airlines, Kraft Heinz, Exelon, Archer-Daniels-Midland and many others with second headquarters. The metro’s diversified industries, buoyed by its distribution, finance to manufacturing operations, explosive high-tech and underrated but booming entertainment sectors. This diversification of industries is what lends itself to the resiliency of the Chicago marketplace and continues to attract multifamily investors from around the globe in pursuit of a solid yield spread.
Chicago maintains a large concentration of financial companies, given its status as the headquarters of the seventh district of the Federal Reserve, the Chicago Board of Trade and the Chicago Mercantile Exchange.
The city is a major global convention destination, as McCormick Place is the largest convention center meeting facilities in the United States and one of the largest in the world attracting trade shows and exhibitions.
Chicago has a bright long-term outlook underpinned by its exports, streamlined manufacturing operations and growing high-tech sector. Amazon’s fulfillment and sorting facilities, Groupon is a large employer downtown and since Google established its tech hub in the city that is fostering startups, attracting other tech companies to the area and renewed commitment of adding thousands of Chicago jobs as part of its 2021 U.S. expansion.
Labor:
Chicago boasts more than 4.5 million jobs and a workforce that is considered one of the most diverse and well-trained of any U.S. city. A vast collection of highly ranked educational institutions including Northwestern University, Loyola University, University of Chicago, DePaul and Illinois Institute of Technology, provide a constant pipeline of talented employees to the local workforce.
Over the past 30 years, Chicago successfully decreased its reliance on manufacturing; traditional manufacturers accounted for nearly 30 percent of the workforce in 1970 but account for only 9 percent today. The movement from traditional manufacturing toward high-tech industries bolstered the technology and biotech components of the region’s economy.
The greatest driver of diversification, however, is a surge in the local business services sector. Throughout the 1990s, Chicago was one of the nation’s leaders in business-services job growth. The professional and business services sector now comprises 18 percent of total metro employment and is forecast to add many post pandemic jobs through 2025, the largest increase among all sectors. This expansion should boost office demand substantially in upcoming years.
Chicago has long been a trade and transportation center of the Midwest. It contains three international airports, major port facilities with access to the Great Lakes, a large rail hub and a network of roadways, all of which make transportation of goods economical. Trade, transportation and utilities is the largest job sector, with 20 percent of the workforce. The sector will increase by an annual rate of 0.2 percent over the next five years, adding nearly 10,000 positions
The Bottom Line
Chicago remains a destination for investors seeking the right mix of value, appreciation and cashflow because of its strong fundamentals in 1) Employment remains at or above the national average 2) Population is third largest in the U.S. 3) Vacancy are resilient 4) Low Average Price Per unit 4) Average Rents are relatively low for a city of its size.