Regional Growth and Restructuring Suburban Development Stephen B. Friedman, AICP, CRE May, 2009

Vision | Economics | Strategy | Finance | Implementation

Overview Part 1. Regional Growth and Real Estate Products in the Next Cycle Part 2. The Suburban Greenfield Challenge: How to Structure Regional Growth?

` `

2

Vision | Economics | Strategy | Finance | Implementation

Part 1. Regional Growth and Real Estate Products in the Next Cycle

3

Vision | Economics | Strategy | Finance | Implementation

The Vocabulary of “Growth” Growth CAVE NIMBY BANANA NOTE NOPE NIMEY

` ` ` ` ` `

4

`

Triple Bottom Line ` ` `

`

Profitability Sustainability Social Justice

Human Rights: The right to a place to live included in p p dE proposed English li h Bill off Rights

Vision | Economics | Strategy | Finance | Implementation

What Are the Prospects? Current “crisis” Long-term Growth: Northeast IL Growing Since 1988

` `

` `

2000 to 2006: All but Cook 2005 to 2030: ` `

Winnebago & Boone: 75,000 People Chicago Area: 1,700,000 People

After the Fall…Continued Opportunity: Demography Drives Demand! How Much Infill? How Much Greenfield? “Smart Growth” and Sustainability Require Doing the Suburbs Right!

` ` `

5

Vision | Economics | Strategy | Finance | Implementation

Generational Waves Size of Generation (Millions of Births) Size of Generation (Millions of Births) 100 75.8

80 60

65.9

74.9

49.6

40 20 0 Pre Baby  Boomer  Generation  (1927‐1945)

6

Baby Boomers  Generation X  (1946‐1964) (1965‐1983)

Generation Y  (1984‐2002)

Vision | Economics | Strategy | Finance | Implementation

Immigration and Population Growth Immigration Growth as Percent of U.S. Population Growth ((Thousands of People) p ) 20,000 15 000 15,000 10,000 5,000 35%

34%

1997-2002

2002-2007

Growth Due to Immigration Growth Due to Other Factors 7

Vision | Economics | Strategy | Finance | Implementation

Predictable Results Schools Built, Closed, Re-opened Rental Housing Boom in 1980s Cities Rediscovered Condo Boom/Rental Bust Suburban Town Centers Alive Senior Housing Demand Gen Y Drives the Next Wave

` ` ` ` ` ` `

8

Vision | Economics | Strategy | Finance | Implementation

Housing Need: Consider Preference and Affordability Housing Choice by Householder by Age and Income: 1995-2006 100% 90%

2% 14%

3% 8%

80% 70%

12%

31%

14%

2% 4% 2% 5%

14%

14%

2% 6%

3% 9%

88% 64%

30% 20%

11% 13%

79%

75%

4% 19%

37%

2% 7%

40%

12%

10%

60% 50%

16%

3% 4% 4%

Other

6%

MF Rented

9%

MF Owned SF Attached

58%

52%

46%

SF Detached

35%

10% 0% < $100K > $100K < $100K > $100K < $100K > $100K < $100K > $100K