Once deemed the "City of Big Shoulders" for its blue-collar might in the meatpacking and railroad industries, Chicago's broad shoulders now carry one of the nation's most diverse economies, where no industry sector bears more than a 15% share of the region's marketplace. So, while Chicago's stockyards have been permanently closed since 1971, Chicago has since learned to lean into its inherent strengths as a central locale with superior intermodal hubs, two international airports, financial resources, world-class universities and the intellectual capital derived from the thousands who annually graduate from college and move to the Windy City to begin their new careers.

Though the manufacturing and FIRE (finance, insurance and real estate) industries drive Chicago's economic engine, its place as the nation’s premier freight hub cannot be understated. According to the Chicago Metropolitan Agency for Planning, about 25% of all freight trains and 50% of all intermodal trains in the U.S. pass through metropolitan Chicago, which is the country's main interchange point between Western and Eastern railroads.

In 2024, Illinois took the sixth spot for CNBC's infrastructure rating because of its abundance of freight lines, interconnected highway network, substantial broadband availability and reliable power. Almost 4,000 logistics firms occupy over 150 million square feet in Chicago.

Yet since 2020, manufacturing and food processing companies have also beefed up their collective Windy City presence, with approximately 5,000 manufacturing tenants occupying its space. In total, manufacturers and distributors fill approximately 500 million square feet, with 10% dedicated for office occupancy. In fact, after years of manufacturing space compression, food processing and snack manufacturers like Kraft Heinz, Post Consumer Brands, Mondelez, Mars and Ferrero have all expanded their Land of Lincoln distribution, manufacturing and research and development footprints. Fulton Market is also home to the nation's largest independent manufacturing innovation center, mHub.

World Business Chicago, Chicago's private and public consortium, and area stakeholders work collaboratively to reimagine and pivot to new economic realities, like Gov. JB Pritzker's efforts to bring quantum computing and data center development to Illinois, including PsiQuantum's commitment to open a 59-million-square foot quantum computing campus on Chicago's South Side. Local and state governmental offices drew the California-based firm to the area through financial incentives, its intellectual capital derived from its research institutions, like the University of Chicago, Argonne and Fermi labs, and its ample supply of fresh water on the former US Steel site. Companies like these are not only expanding Chicago's projected gross domestic product but also contributing to the area's employment base, especially for Chicago's South Side and its south suburban neighbors.

Yet the biggest concern is Chicago's office market, where there is just too much available space to meet tenant demand. One of the easiest pivots in recent years has been demolishing obsolete suburban office buildings to make way for distribution, data centers and even single-family homes.

Efforts to balance a site's highest and best use and project feasibility may prove daunting but certainly not insurmountable. Spearheaded by former Chicago Mayor Lori Lightfoot, the now rebranded LaSalle Corridor Revitalization program under Mayor Brandon Johnson has approved $151 million in TIF (tax increment financing) funds to support plans to redevelop four obsolete office buildings in the Central Loop into 1,000 apartments, with 30% of the units designated as affordable.

Still, tangible headwinds to Chicago's future growth include Cook County's fiscal woes, unpredictable real estate tax burdens, onerous land approval processes and mandatory trade union employment for most development projects, and Cook and DuPage counties' projected population losses. Though its crime rate is on par with the national average per 100,000 people, its perception is otherwise.

Chicago's mayor and the city's Department of Planning and Development commissioner, Ciere Boatright, created the "Cut the Tape" program to streamline Chicago's land development approval process. They also take a holistic approach, tackling neighborhood revitalization efforts instead of piecemeal approvals.

Though its population figures have compressed due to the loss of blue-collar jobs, 43% of the area's residents have a bachelor's degree compared to the 25% national average, chronicling an average household income just below $90,000 per year, or 10% more than the national average. According to the U.S. Treasury Department, a concentration of high-income earners (like Chicago's downtown and North Shore communities posting average incomes between $173,000 and $250,000 per year) may be a greater indicator of apartment demand than population growth gains. It's partially why Chicago's multifamily market has maintained its strong tenant move-in status since 2021, lowering its pre-pandemic structural vacancy by more than 150 basis points.

Additionally, while its high barrier to entry dissuades some from investing, these costs also make the region attractive to those who prefer less supply-side competition. Although cumbersome to outsiders, Chicago's notorious vehicular traffic pushes some of its residents to rely heavily on mass transit, which can translate into the Chicago market’s overall affordability as compared with other large metropolitan areas without this infrastructure.

When Chicago works well, its moniker should be "slow and steady wins the race." Across multifamily and industrial properties, move-in and year-over-year asking rent growth rates are outperforming the national average. Though Chicago’s retail year-over-year asking rent growth is meager, its availability rate is consistently tight across the region, outside the Downtown market cluster.

And when the market has expanded beyond its demand reach, like it has for office space, then the cost basis invariably has lowered, triggering opportunities for the new owner to redevelop or repurpose the site. This is already happening across Chicago, where average market prices per square foot have fallen from the five-year (2015–19) pre-pandemic annual average of $180 per square foot to mid-January’s $65 per-square-foot average.

For "The City That Works," it does indeed do just that. Over 400 companies across various industries each occupy over 100,000 square feet of office space within the Chicago metropolitan area, including recent expansions from engineering consulting firm Sargent & Lundy, management consulting firms PwC and Boston Consulting Group and logistics company Wheels. Here is the corporate home of United Airlines, industrial supply distributor W.W. Grainger, medical supplier Medline, pharmaceutical giant AbbVie, manufacturer GE HealthCare, Discover Financial Services, retailer Ace Hardware, global insurance brokerage Gallagher, fast food giant McDonald's, Hyatt Hotels and law firm Kirkland & Ellis.