Conlon & Co. chairman Sean Conlon has long been a star of Chicago’s real estate world, but now he’s sharing his industry smarts on a national level as the host of CNBC’s The Deed: Chicago. The show follows Conlon as he gives struggling developers a lifeline, investing his money, time, and expertise to help them revive their floundering projects. Viewers can get a taste of Conlon’s expertise in the series, airing Wednesdays at 9 p.m. CST on CNBC, but we hit him up with a few specific questions of our own about the future of Chicago real estate, the city’s hidden gem neighborhoods, and the biggest errors developers make.
What are some of the biggest trends in real estate you’re seeing lately, particularly in Chicago?
SEAN CONLON: Prices continue to move in a positive direction and Chicago is witnessing more residential tower construction than any other U.S. city when it comes to construction cranes. It’s expected that Chicago will see 33 new buildings deliver over 6,000 rental units in 2017 alone, and median prices are forecast to continuously grow in 2017 within a narrower and slightly smaller range compared to 2016. Midwest cities, like Chicago, will continue to be a hotbed for millennials.
What do you predict will be the “next big thing” in real estate development and flipping?
SJC: The Deed: Chicago on CNBC with Sean Conlon???
What are your favorite hidden-gem neighborhoods in Chicago?
SJC: Lincoln Park is obviously famous for new construction and historic mansions, but the old workers’ cottages in Old Town proper, west of Wells Street and north of North Avenue, have a fantastic old-world character that can never be achieved with new construction.
What neighborhoods do you think are next to “come up”?
SJC: Anything around the West Loop, due to the technology business in the area and the nightlife entertainment. There will be a lot more residential buildings going up [there]. Anything around Finkl Steel [redevelopment site] is a great investment! Anything Belmont Gardens—as home prices in Avondale rise, there are still a lot of affordable flips in Belmont Gardens just a few blocks away. Woodlawn is also great—with the addition of the incoming Obama Presidential Library library and new single-family homes development, this area is on the rise! With the Woodlawn Station mixed-use building and new rentals, this community is great to start developing. Hermosa is also coming up—as home prices in Logan Square rise, there are still a lot of affordable flips in Hermosa just a few blocks away. It is a triangular section of mostly brick and frame homes, and there is some buzz in the area with the intended [restoration] of Walt Disney’s birthplace and the opening of the city's only cider-making facility, Right Bee Cider.
What’s the biggest error struggling developers make?
SJC: Sometimes folding up your tent to live and fight another day is a win. Sometimes developers hold on to their projects too long and are too emotionally connected to the projects to make business decisions. They acknowledge the facts too late and... in flips, time is a killer. Another big error is underestimating the cost and time it will take to actually complete their flip or development.
What is your number one piece of advice for anyone looking to get into real estate development or flipping?
SJC: Trust but verify! Specifically, I’m talking about contractor costs and costs of materials. On your first flip, assume that your construction costs will double and the amount of time you estimate for completion will double! (That is somewhat tongue-in-cheek but your costs will be way more than you anticipated.) And be a developer, not a designer—no one cares about your Versace wallpaper!