Why We Are Watching South Side Multifamily Real Estate Closely in 2021
August 27, 2021

Welcome to “Five Questions,” a monthly series where Essex Realty Group, Inc. brokers share their observations and experiences gained while working in Chicago’s real estate world. This month we are getting to know Essex Director Brian Mond.

About The Broker: Brian Mond joined Essex Realty Group, Inc. in 2016 as a Director with a specific focus on real estate located in the South Side of Chicago. Brian was exposed to real estate at an early age while working in architecture and construction with his family’s business in Argentina. He has acquired, renovated, and leased apartment buildings throughout Chicago since 2010. As a broker and investor, he understands how to navigate the complexities and inner workings of an apartment building sale and what it takes for a sale to occur.

In 2007, Brian graduated from the College of Design at Iowa State University in Ames, IA with a Bachelor of Science degree in Community and Regional Planning. In 2012, he graduated from the Marshall Bennett Institute of Real Estate at Roosevelt University with a Master of Science in Real Estate and was honored as the Hipolito Roldan Scholar.

Brian is involved in several organizations and is on the advisory board of the South Side Builders Association of Chicago. He is very active in team sports including sailing and rugby. Back in Iowa, Brian played rugby until he was injured, but that didn’t stop him from coaching and leading his team, the Cyclones, to State Championship in 2007. Since 2012, Brian has participated in the Chicago to Mackinac Island sailing races and competes regularly in One Design fleets.

Q: Why were you interested in starting a career in Real Estate?

Brian: I grew up in the industry. As a kid I enjoyed tagging along on property walk-throughs and tracking construction projects over time. Today, while working as a multifamily real estate broker, I have come to know and appreciate the value of multifamily investments. I am inspired by my family, and today I own a multifamily investment property myself. Although it can be a challenge to buy a value-add project, renovating a building can really be quite exciting. Especially when you see the final result and your residents move in. I would encourage anyone interested in investing and building wealth to learn more about multi-family real estate investing.

Q: Why did you choose Chicago as your home base?

Brian: Obviously, the great winter weather... just kidding! I was drawn to Chicago because of the beautiful, never-ending lakefront, the city’s rich history, and the people!

I am a big fan of the late great Anthony Bourdain and I love this line he wrote about Chicago for an Essay in 2016, “You wake up in Chicago, pull back the curtain, and you KNOW where you are...” This quote speaks to me, and to working in the real estate industry in this town.

I really enjoy being involved in the investment opportunities in South Shore as well because of the stunning architecture and beautiful outdoor spaces. The entire shoreline is either a beach or a harbor or golf course.

Q: Describe one area of our industry that you have seen grow throughout your career?

Brian: One major change is the importance of social media. Five to ten years ago, you did not have brokers dancing in empty apartment buildings on TikTok! That is a silly (but true) example. In all seriousness, having a presence on social media is a great way to market yourself and stay relevant. Capturing someone’s attention is every broker’s goal and it is increasingly harder to do, so using creative social media platforms can be a great tool.

Q: If you could teach someone starting as a broker tomorrow just one thing, what would it be?

Brian: Have patience! In this past year I have had to take my own advice many times. I have put together a few portfolio deals for my clients and the nature of working with multiple parties and properties can complicate closing deadlines. If something comes up with one of the properties and the portfolio close date gets pushed back, it is important to have patience and keep calm. Starting there helps me be a much more effective broker focused on fixing the situation. There are very few issues that cannot be solved with a little patience, and everything else just costs money! If I were to offer an additional piece of advice, I would also encourage brokers to have empathy. This is an important trait to consider when building a relationship with a client. Being able to really understand a client’s issues and concerns will help you anticipate how to solve problems in advance.

Q: Describe some changes you are seeing throughout your market?

Brian: I lead Essex’ South Side multi-family brokerage team and my core neighborhood sub-markets include South Shore, Auburn Gresham, Chatham, Woodlawn and more. Chicago’s South Side neighborhoods are rapidly changing and ultimately attracting new buyers to the market.

New Developments

INVEST South/West is an unprecedented community improvement initiative from Mayor Lightfoot to marshal the resources of multiple City departments, community organizations and corporate partners toward 10 neighborhoods on Chicago’s South and West sides. Through this groundbreaking collaborative of government, businesses, philanthropies, and community leaders, the City will align more than $750 million in public funding over the next few years. The initiative will seek to maximize those public investments in order to attract private capital, respond to changing commercial trends and enrich local culture. In the last year, development proposals have begun to come in for new projects in these core neighborhoods.

In Bronzeville, the City Council recently approved zoning for a $4 billion mixed-use redevelopment project located at the former Michael Reese Hospital site. The site totals nearly 8 million SF of space. Just south of that planned development sits the future site of the Obama Presidential Center in Jackson Park.

Post COVID Rebound

My team and I have also been actively tracking multi-family transactions in my core sub-markets. We specifically analyzed South Shore multifamily transactions for properties with eight units or more that have sold over the last six quarters (1/1/2020 – 6/30/2021). According to CoStar, Chicago’s South Shore multi-family market appears to have bounced back to pre-COVID levels. The first chart below compares the quarterly Average Sale Price and Average Price Per Unit. The Price Per Unit achieved in Q2 2021 is the highest average Price Per Unit over the last five prior quarterly periods, while the Average Sale Price only slightly lags behind Q1 2020. The second chart demonstrates Q2 2021 reported the highest total Sales Volume when compared to the five prior quarterly periods. The second chart also compares Average Cap Rates and while South Shore cap rates have not yet reached pre-COVID levels, they appear to be trending in that direction.

Click here to view the chart: Average Sale Price & Average Price Per Unit | South Shore

Click here to view the chart: Total Sales Volume & Average Cap Rate | South Shore

Q: What is your favorite thing to do when you are not touring properties?

Brian: If I am down in South Shore and have some free time during the summer between showings I like to head to the lakefront. There are several beautiful beaches, parks, and harbors. Jackson Park Harbor is filled with friendly sailors whom I have come to know and sail with over the years. My favorite dog park in Chicago - Jackson Bark is quite the set-up with homemade obstacle courses and jungle gyms for pups!

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, or click HERE.

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