Essex | The Next Generation of Multifamily Brokers
As Essex continues to grow we’re proud of the energy and new ideas our less tenured brokers bring to the mix. We spoke with Directors Matt Feo, Abe Eilian, Jordan Multack, Clay Maxfield and Anthony Citriglia to learn what insights they’ve learned from the senior principals and what multifamily trends they may see emerging over the next few years.
Q: Do you think there will be long-term impacts on renter trends due to COVID-19 related concerns or are they just a temporary knee-jerk reaction?
Abe Eilian: While I don’t have a crystal ball, I do believe rent trends will return to pre-COVID levels much sooner than many believe. I think that a lot of Chicago renters that originally intended to move this past spring/summer ended up deciding to “hunker down” in their current rentals and hold off on moving until next spring/summer. Due to this, I believe next spring will be a stronger rental season than we’ve seen in recent years.
Anthony Citriglia: In my opinion, suburban living is more sought after than ever before due to the increase in employees working from home. Working from home comfortably requires space, and with office buildings and the city shut down, the benefits renters get from paying high rental rates for small city apartments declines. Further, with the uncertainty that COVID-19 can bring, especially for Gen-Z graduates just entering the workforce, many will likely choose to rent instead of purchase as they figure out their future in the post-coronavirus era.
Q: What product type do you see being popular with investors next year and why?
Jordan Multack: There are a large number of newer construction properties, completed 10 to 15 years ago, that were built with the intent to sell as condominiums, that today are operating as apartment buildings. These failed condominium projects will continue to be popular for investors over the next few years. These types of buildings can make ideal investments because they are either turn-key properties or simply require light cosmetic updates to keep the units fresh. Plus, units that were built to be condo units are often very thoughtfully designed and make great apartments.
A perfect example of this type of property is 3332 West Palmer, an eight-unit apartment building in Logan Square that my team and I sold last year. 3332 West Palmer was delivered in 2008 and because of the housing crisis around that time, the condo units were never sold off to individual owners. We marketed this property for sale and generated more than 20 property tours and multiple offers. I believe investors were so interested in this property because it is situated in a great pocket of Logan Square and the property offers the new owner room to grow. In this case, and like many of these buildings, the mechanicals and structure of the property are in excellent shape, and to increase rents the new owner could just focus on light cosmetic updates in the kitchens and bathrooms. Due to the current pandemic, I have noticed many property owners sitting on failed condo projects like these are asking themselves if now is the time to sell, and in my opinion I think it is a good opportunity for owners to get an updated property valuation.
Q: Over the next five years, which neighborhoods should investors be paying attention to?
Clay Maxfield: I am bullish on the Northwest side, think neighborhoods like Jefferson Park, Norwood Park, Old Irving Park, and Portage Park. In fact, I believe these neighborhoods have so much potential that I recently transitioned my target market from the typical lakefront neighborhoods to these Northwest side neighborhoods. There are a few main reasons an investor should be looking at multi-family properties in these areas.
- Retail Corridors. These neighborhoods feature large retail thoroughfares including Milwaukee Avenue, Higgins Avenue, Montrose Avenue, Wilson Avenue and Lawrence Avenue.
- Residential Communities. While there are fantastic retail stretches, these neighborhoods are primarily filled with single-family homes. The residential mix in this neighborhood is unique and brings a great sense of community. Rather than seeing 20 courtyard buildings on one street, you might find just two with the rest of the street featuring single-family homes. It can give renters that suburban feel while living in the city.
- Location. These neighborhoods have convenient access to the freeways and are centrally located between the central core of Chicago and the suburbs.
Over the last few years there has been a migration of investors who historically focus their attention exclusively on properties east of the highway and near the lakefront, to properties west of the highway in neighborhoods like Wicker Park and Logan Square. I see this migration continuing a little further north to these northwest side neighborhoods next.
Anthony Citriglia: The northern Chicago suburbs are a key area for investors to focus in on. Why? Rental demand! There has been a consistent demand for apartments in these areas with a steady rental increase year after year, making it a solid choice for investors. There are also plenty of value-add opportunities available. Niles, for example, has a plethora of properties owned by long-term owners that are filled with long-term tenants, which means many of them are renting well below market value. A new owner can invest in that opportunity and add value to the property by updating the units and bringing those rents up to market rate.
Matt Feo: There will always be good investment opportunities in the lakefront communities like Lincoln Park for a number of known and established reasons. Lincoln Park and Lakeview are a safe bet! But it is important to remember that this lower risk means lower cap rates with lower returns. In my opinion, neighborhoods a little further north, like Uptown, Ravenswood, and Edgewater offer an investor willing to take slightly more risk, so much more potential. These neighborhoods have certainly caught the eye of developers in recent years, however even with all the new developments, the neighborhoods are not even close to fully tapped. One reason for growth stems from the new transit system updates. Renters in these neighborhoods have access to multiple CTA lines and the UP-N Metra line, which is important for attracting commuters, and renters looking for quick access to downtown. Over the next few years I think you will continue to see rental rates in Uptown, Ravenswood and Edgewater reach the rates in Lakeview and Lincoln Park.
Q: What is one thing you have learned from your senior broker at Essex?
Matt Feo: I started my brokerage career working on Matt Welke’s team. One of the things he always stressed was that brokerage is a tough career, and a positive and resilient attitude is required if you want to be successful. A motto he shared with me was to treat every day like it is your first day on the job. Despite the uncertainty inherent to the industry, the most important quality a broker can exhibit is consistency. To me this means to not get lost and off track celebrating the highs, and to not get to beaten down during the lows when a deal falls apart. I strive to maintain high integrity and to be the best service provider I can, and to show up each day with the same energy and enthusiasm I did on day one.
Doug Imber also has a line he shares that also has really stuck with me, to paraphrase… “you only get one reputation, and it is everything. It follows you. It precedes you. It outlasts you.” Your reputation in the industry is so important because we are in an industry that demands a high level of trust and integrity. As brokers it is our fiduciary duty to serve our clients best interests 100% of the time. The real estate community here in Chicago is so small. As a broker I am focused on the long term and focused on building my reputation with the highest level of integrity I can.
Abe Eilian: Relationships are more important than any one deal. The more successful my clients are the more successful I will be.
Anthony Citriglia: Since joining the Essex suburban team, I have been presented with an opportunity to learn something new every single day. I don’t think I can condense everything I’ve learned from my team into one particular lesson. By coaching me through everything from cold calling to managing the transaction, they’ve absolutely provided me insight into negotiating the deal when it goes awry! Brian Kochendorfer and Brian Karmowski have proven to be the best examples of what it takes to be a successful broker in the competitive field of multifamily brokerage, and I feel fortunate to have them as my mentors.
Q: What drew you to want to start your career at Essex?
Matt Feo: I graduated with a degree in commercial real estate from Marquette. It was an awesome program and gave me the opportunity to network and meet with a lot of people in the Chicago real estate community. By the time I graduated I had received a few offers from other real estate firms, but to me there was never even a moment of doubt or confusion, the only place I wanted to work at was Essex. The precedent set by the principals is the backbone of the company. Essex represents a culture of integrity, and something else I admire about the company is the tenure of most of the senior brokers. I value the benefits of a long-term relationship and I admired the fact that the brokerage team has such long-term depth that only comes from investing time and energy to one organization. This helps build a really strong team.
Clay Maxfield: When I was in 8th grade, I told my dad I wanted to work in real estate. He worked in the real estate industry and owned properties himself, so it seemed like a natural career path for me. I distinctly remember he advised me then to aim to get a job at Essex and learn everything I could about Chicago real estate from Doug Imber. I never forgot his advice and Essex was the only real estate firm I applied to once I graduated from college. I have worked at Essex for six years now. The reason I continue my brokerage career at Essex is because I share the same values that the principals at the company promote. The environment at Essex endorses entrepreneurship and rewards those who work hard and take risks. I recently launched my own brokerage team, and I don’t think I could have done it without tapping the Essex brain-trust.
Since 1990, Essex Realty Group, Inc. has served Chicago’s investment real estate market as a top multifamily brokerage firm. Contact us today to learn more about our recent multifamily and mixed-use property sales.