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  • Writer's pictureCalamos Real Estate LLC

Lessons from the Great Recession can help navigate today’s commercial real estate challenges

Two phrases echoed throughout January’s REJournals Chicago Forecast: Survive ‘til ‘25 and Do More in ‘24.


They are not mutually exclusive.


“With current market challenges triggered by a first-in-a-century global event there’s no obvious recovery playbook,” said Calamos Real Estate SVP Ken Witkowski. “But there are 21st century events on which to focus our 20:20 hindsight: The 2007 market downturn and Great Recession that followed.”


In November 2023, Illinois Real Estate Journal ran a story that appears on this site about Naperville’s CityGate Centre, managed by Calamos Real Estate, outperforming the current high-vacancy office market. Developed by Calamos Investments LLC Founder, Chairman and Chief Investment Officer John P. Calamos, Sr., the 176,000 gross-square-foot global headquarters for the namesake financial firm he launched in 1977 was the first building completed on the 31-acres that comprise CityGate Centre.


In 2005, Calamos moved into its new HQ. While construction of another million square-feet of real estate was underway at CityGate Centre development the global financial crisis struck. Calamos’ next steps contributed to the community’s current success. These are lessons to be shared.

Lesson 1: Consider what success looks like.

Generally, owners and investors hone-in on the obvious: Cap rate as a primary measure. Value of less tangible attributes is subjective…yet meaningful.


“As CityGate Centre approaches that tangible measure of 90% leased, tenant testimonial and anecdotal evidence shows intangibles—reputation, community impact, distinction and pride—absolutely contributed to success,” Witkowski said.


For Calamos, CityGate Centre was never simply a cluster of beautiful buildings. His vision was to create a destination where his employees would want to be, where their clients would feel appreciated and exceptional, and that the community could enjoy; one that could stand up to the best of the world-class locations he had the privilege to visit.

Lesson 2: Find opportunity in adversity.

The original site plan for CityGate Centre illustrated a traditional business park dominated by five office buildings and five parking garages set among a hotel, dining and retail, and a performing arts center. It projected more than 2.7 million gross-square-feet of construction. But in October 2008, when the global financial crisis reached its climax, construction was paused on all but the just over a million square feet that Calamos had built or was actively building.


“This new-construction suspension was not inaction,” Witkowski said. “Rather, it was different action: Evaluating the changing climate—financial and political—and reimagining the vision that began as a 5-office-building business park in the suburbs.”


From the start of the recession and through its long recovery there was another force at play: The suburban exodus attributed to pro-business Chicago Mayor Rahm Emanuel when 68 suburban headquarters or major offices moved from Chicago’s suburbs to the city. It peaked during Emanuel’s second year in office, 2008, when 15 businesses moved to Chicago from the suburbs and continued through his 12 years as mayor.


It drove an even more dynamic vision for CityGate Centre’s role in the community.

Lesson 3: Quality and amenities matter

Focus shifted from building an office park to creating an amenity-rich community and, chiefly, high-quality amenities. Calamos formed a hospitality management company, today known as CityGate Hospitality LLC, led by hand-picked individuals to take over operation of CityGate Centre’s hotel and restaurants.


The goal was to maintain and improve excellence, to further boost the world-class service and surroundings enjoyed by employees, clients, tenants and community and, ultimately, to draw new tenants to the property as the economy stabilized.


Those actions are key factors in CityGate Centre’s success today, according to Witkowski.

“Tenants tell us the amenities make a difference,” he said. “And investment into amenities can be scaled.”


During the REJournal Forecast’s Suburban Office Panel, Julia Klairmont of Imperial Realty Company mentioned adding a tenant-amenity fitness center in an unleased suite of a small office building. Whether a PUD or a small building, turning unleased space into an amenity—a tool to generate other revenue—makes sense.


Today, CityGate Hospitality manages Hotel Arista—the only Forbes-recommended hotel in Illinois outside of Chicago—five food & beverage amenities, a world-class fitness center and a Forbes 4 Star spa—also, the state’s only outside of Chicago—at CityGate Centre. The community has become both a business- and celebratory-event destination; two of its event venues—Hotel Arista and the indoor-outdoor event space at CityGate Grille—earned Hall of Fame status with theknot.com Best of Weddings.


In 2018 CityGate Hospitality opened Che Figata. The upscale, authentic Italian dining experience won three Wine Spectator Awards (2019, 2022 and 2023).

Investment into amenities continues with a 40,000 square-foot event center that will open atop the 285-unit luxury apartment building, Domain CityGate, developed in a JV with Willow Bridge Property Group. With its first residents in October 2022, Domain CityGate reached 98.9% leased by October 2023 and was named NAIOP Chicago’s multifamily development of 2023.

Lesson 4: Be a good global citizen

A visionary who embraced sustainability before it became mainstream, Calamos’ second office building at CityGate Centre, the over 219,000 gross-square-foot cornerstone building opened in 2007, is LEED Silver®. Next door, Calamos’ Hotel Arista opened in 2008 as the first LEED Certified® hotel in Illinois.


“Beyond the greater good, sustainability is good business,” Witkowski said. “Office tenants and hotel guests often cite Green standards at CityGate Centre among reasons they choose to lease in or stay at the community, and our employees are proud to work for a globally conscious developer.”


For existing properties, choosing Green at equipment replacement intervals, for maintenance products and for minimal-footprint disposal methods can make an impact to both the environment and marketing.

Lesson 5: We’re all in this together

While Emanuel’s pro-business policies had significant impact on the landscape of the suburbs, today Chicagoland’s seven counties are working together through the Greater Chicagoland Economic Partnership (GCEP). On a regional panel during this year’s Forecast event, GCEP Chair and Choose DuPage CEO Greg Bedalov explained the relatively new, formalized collaboration between Cook—including Chicago—DuPage, Kane, Kendall, Lake and McHenry Counties was formed on the premise that the region can achieve more to strengthen jobs and capital investment by working together than any one community can on its own.


Established in January 2023, GCEP partners have worked collaboratively to identify market sectors within the region primed for growth, developed strategies for enhanced penetration into those markets, created the first interactive regional asset map and secured more than 50 pro-Chicagoland decisions. GCEP partners have traveled nationally and internationally to market the region and attract foreign investment. 


In 2024 GCEP is working to establish marketing programs including tools that present a common identity amplifying the strengths of Chicagoland. GCEP will expand foreign direct investment outreach and build on its successes from 2023 including joint participation in national site selection events. Most importantly, GCEP will continue to work to bring more businesses to the region for the benefit of all.

The final lesson: Do what works for you

While these challenges are universal, the solutions are widely varied. Even if circumstances have you in the Survive ‘til mindset, use the time to think—not worry—about how you’ll do that.


A version of this article appeared in the Feb/Mar issue of Illinois Real Estate Journal.


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