March 4, 2016
CHICAGO—Brad Migdal, a site selection expert with Transwestern, tells GlobeSt.com that the recent moves by Allstate and Beam Suntory should motivate Lake County to make it cheaper for millennial workers to live there.
The Merchandise Mart has now become one of the most significant tech hubs in the US.
CHICAGO—The plans announced this week by AllstateCorp. and Deerfield, IL-based Beam Suntory to make moves from the suburbs into the Merchandise Mart are not really surprises, given the parade of companies that have made similar migrations in the past several years. And Brad Migdal, executive managing director of the site selection/business incentives practice at Transwestern, tells GlobeSt.com that Lake County could lose even more workers in the near future if it doesn’t do something to make living there more affordable.
“Lake County’s biggest problem is its property taxes; it’s like paying two mortgages,” he says, and if the younger tech workers that most companies want to recruit can’t afford Lake County, those companies will continue to move to where the workers do want to live. And these days that means the city.
“These moves are great for Chicago, but bad for Illinois,” he adds, because the state is no longer attracting companies from out of state, as it did when Boeing moved from Seattle, but instead just shuffling existing ones around. “We have these beautiful corporate campuses in the suburbs, and they are going to turn into dinosaurs.”
“We have had some great successes in the suburbs with the pharmaceutical sector,” but “every year a new bunch of millennials move to Chicago. They move to where they want to live, rather than to where the jobs are.” And the most important consideration for most companies these days when selecting a new site is how it will help with talent recruitment. “Every project I do now, whether it is office or industrial, the companies are chasing labor.”
And although Allstate says only about 400 of its workers, primarily those involved in quantitative research and analytics, will make the move from its Northbrook headquarters to 45,000 square feet on the Mart’s eighth floor, Migdal wonders if that is just the beginning. After all, if the move helps Allstate recruit tech workers, company officials may decide to move advertising, marketing and other departments downtown. “What then happens to that property?”
“The suburban real estate market is at a crossroads,” he says. “We just need to make it more affordable for millennials. Chicago is winning that battle.”
GlobeSt.com [official website]