Jewels of Wisdom Newsletter – Worth Less Real Estate

Posted on October 13, 2025
In Jewels of Wisdom Newsletter

Why I’m Doubling Down on Chicago

While national headlines focus on volatile coastal markets and Sun Belt cities with inventory surpluses, the smartest money is quietly looking at a market with resilience, affordability, and a powerful, multi-layered growth story: Chicago. I’m deploying capital here. Have a deal for sale?

The Residential Reawakening: More Than Just a Pretty Skyline
While other major U.S. cities grapple with affordability crises, Chicago remains a bastion of value. But don’t mistake value for weakness. The city’s residential market is demonstrating remarkable strength, outpacing the nation in price growth. In May, home prices in Chicago proper shot up an impressive 8% year-over-year, well above the national average of 1.8%.

What’s driving this?

A Population Influx: After a decade of decline, Chicago is growing again. The region is experiencing a renewed wave of migration, including the seventh-largest population gain among all U.S. cities from mid-2023 to mid-2024. This influx is creating real demand, tightening a housing supply that is already at a historically low two months of inventory.

Relative Affordability: Chicago offers a world-class city lifestyle at a fraction of the cost of its coastal peers. The median home price is less than half of what you’d pay in New York City and about a third of the price in Los Angeles. This value proposition is attracting millennials and Gen Z, who are increasingly returning to the city.

The Climate Haven Thesis: As climate-related risks intensify, long-term investors and homebuyers are seeking locations insulated from disasters like hurricanes and rising sea levels. Chicago’s inland location and proactive infrastructure investments are positioning it as a climate-safe haven, attracting a new cohort of buyers focused on long-term stability.

Commercial Chaos Creates Opportunity: The Office-to-Multifamily Conversion Play

It’s no secret that Chicago’s downtown office market is under pressure, with vacancy rates hovering near 27%. Many see this as a liability. I see it as the single greatest value-creation opportunity in the city.

This isn’t a cyclical downturn; it’s a structural shift. Obsolete office towers are now being sold at massive discounts—some as high as 83% less than their previous sales prices. This distress is the catalyst for a brilliant redevelopment play: converting empty office buildings into desperately needed residential units.

This strategy perfectly aligns with the city’s robust multifamily market, which boasts the second-highest rent growth among the top 50 U.S. markets and has the lowest incoming supply of any major city for the foreseeable future. The city is actively encouraging this transformation through initiatives like the “LaSalle Street Reimagined” program, which is helping create over 1,700 new apartments from former office space. This is where true value is being unlocked—acquiring distressed assets at land value and repositioning them to meet overwhelming residential demand.

Industrial: The Unquestionable Powerhouse

If the commercial market is a story of strategic repositioning, Chicago’s industrial sector is a story of pure, unadulterated strength. As the nation’s premier transportation and logistics hub, its industrial real estate is in a class of its own.

“Fortress” Submarkets: Corridors like O’Hare and Elk Grove are effectively landlocked, with vacancy rates below 2%. With supply permanently constrained and the $8.5 billion O’Hare 21 modernization project driving long-term demand, these assets are blue-chip investments.

Pro-Growth Corridors: In submarkets like Lake County, pro-growth municipalities are attracting billions in investment by streamlining approvals, creating a haven for developers and tenants seeking an alternative to the high-priced O’Hare market.

Healthy Fundamentals: Across the metro area, the industrial market is thriving. The overall vacancy rate is a healthy 4.7%, and rent growth is a strong 4.3%—well ahead of the national average. Leasing activity remains robust, positioning Chicago as a critical hub for logistics, e-commerce, and manufacturing firms.

Why Buy Chicago?

Chicago’s real estate market in 2025 is a tale of three distinct but interconnected opportunities. The residential market is firing on all cylinders, driven by affordability and demographic tailwinds. The distress in the office sector is fueling a creative and profitable redevelopment boom. And the industrial market remains one of the most stable and sought-after asset classes in the country.

While others are distracted by outdated narratives, we see a city with a diverse economy, strengthening fundamentals, and multiple avenues for intelligent investment. Now is the time to look closer at Chicago. You can view a few Chicago deals we have for sale here.

Have anything like this for sale? I am Buying:

(I Need a $4M-$8M purchase to close by year end.)