projects
mcDonald's HQ Redevelopment | Oak Brook, IL
This project involved the repositioning of a landmark corporate campus in the Chicago suburbs (the former McDonald’s Global Headquarters) into a mixed-use development that expands from office and hotel/conference uses to include multifamily residential; retail, dining, & entertainment; service, and outdoor recreation elements. Now re-branded as Oak Brook Reserve, the existing office building has been re-tenanted and the property is slated to become the new headquarters for Ace Hardware.
Scope included real estate market analysis, demand modeling, programming, urban planning strategy, and some preliminary pro-forma financial feasibility.
More information on the project can be found here.
Role: Brian Jennett was responsible for the real estate economics portions of the project while working as a Real Estate Strategist at the Lamar Johnson Collaborative (LJC). Design and renderings below by others.
The Vision: Oak Brook Reserve aims to be a model for the future of Suburbia.
To accommodate a new generation of younger residents, many of whom live differently from the past, there is going to be a need for a wider range of housing and workplaces
Over time, as the metro region continues to grow, there may be demand for additional office space at the site, but this is unlikely in the short term. In fact, the main challenge at present is to re-tenant the existing office space. Diversifying the uses on site will help with that.
Converting the property to a multi-tenant “campus”, which is also open to the public, will help create a more flexible property
Adding commercial elements such as restaurants, entertainment, and convenience retail/services will support the campus concept
Increasing the development density to what was originally planned for the site will help support transit.
Preserving and maintaining the open space, programming it for activities, and tying it to adjacent public uses will help create a civic, social, and cultural heart for the Village
Evolving the suburban model to be more sustainable in the future is part of our vision, and we think this will increase the appeal to potential tenants
Times are changing. As we plan for the future, we need to remain adaptable to changing needs.
The economic outlook is stable, but growth will be gradual. In the suburbs in particular, there is limited demand for new development at this time.
The population is changing: Oak Brook is becoming older and more diverse. Interests and lifestyles are changing.
The economy is changing. Many traditional jobs have faded away. There are new kinds of jobs, including more temporary and independent work. People move around frequently as they follow the work from city to city. A portion of the workforce is so mobile that they have no fixed workplace from one day to the next. Coworking has tapped into this segment, and has grown rapidly.
How and where people live and work is changing. People increasingly seek places where they can maximize professional and social opportunities, reduce their commutes, and enjoy shared amenities. They find this in more urban environments, or at least places with a mix of uses, higher densities, and support for transit. The isolated corporate campus – once considered the ideal – is increasingly seen as obsolete; vacancies are relatively high. Even the appeal of single-family homes has declined somewhat; people are less inclined to maintain a large home or do yardwork; they don’t need or use the space.
The nature of the workplace is changing. Technology enables us to work remotely, but we continue to seek out places for collaboration and social exchange. The competition for employees has led to new kinds of workspace with increasingly generous amenities. However, its not just the quality of the environment; its also about the “network effect” among people. Companies are following the talent as it moves toward these clusters, whether they are downtown or in the suburbs (eg. Silicon Valley)
The commitment to ownership is declining: Renting homes is on the rise for a host of demographic, lifestyle, and economic reasons. Flat wages, increasing debt, high prices, and high taxes speak to some of the economic factors. People are staying single longer, having less children, and living in households are defined by choice rather than genetics. The population is also more mobile than ever. Even for those who can afford it, ownership makes less sense – many simply move too frequently. In the commercial sector, the story is the same: corporations often lease space so they can invest capital in other parts of the business that may earn them a higher return, and to maintain flexibility to change as their needs evolve.
How people and things move around is changing: Car ownership and driving are both declining, replaced with transit, Uber/Lyft, bikes/PMDs, and in the future: AVs. Parking demand has been declining over time as a result.
How people spend their leisure time is changing: People spend more time online and less time outside, or in traditional shopping environments. Goods are increasingly ordered online and delivered directly. Experience is now the differentiator, and mixed use environments programmed with entertainment, education, and other attractions are the most successful. The environments created by single-use zoning are seen as problematic/stale.
Summary of Market Analysis (several hundred pages):
