{"id":31076,"date":"2021-05-05T14:14:00","date_gmt":"2021-05-05T11:14:00","guid":{"rendered":"https:\/\/www.commercialcafe.com\/blog\/?p=31076"},"modified":"2025-03-25T16:09:25","modified_gmt":"2025-03-25T13:09:25","slug":"expert-insights-chicago-office-leasing","status":"publish","type":"post","link":"https:\/\/www.commercialcafe.com\/blog\/expert-insights-chicago-office-leasing\/","title":{"rendered":"Expert Insights: Chicago Real Estate Attorney John Goldstein Discusses Office Leasing in the Current Marketplace"},"content":{"rendered":"<div id=\"attachment_31079\" style=\"width: 239px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-31079\" class=\"wp-image-31079\" src=\"https:\/\/www.commercialcafe.com\/blog\/wp-content\/uploads\/sites\/10\/2021\/05\/Goldstein_John.jpg\" alt=\"\" width=\"229\" height=\"263\" srcset=\"https:\/\/www.commercialcafe.com\/blog\/wp-content\/uploads\/sites\/10\/2021\/05\/Goldstein_John.jpg 451w, https:\/\/www.commercialcafe.com\/blog\/wp-content\/uploads\/sites\/10\/2021\/05\/Goldstein_John.jpg?resize=131,150 131w, https:\/\/www.commercialcafe.com\/blog\/wp-content\/uploads\/sites\/10\/2021\/05\/Goldstein_John.jpg?resize=261,300 261w\" sizes=\"auto, (max-width: 229px) 100vw, 229px\" \/><p id=\"caption-attachment-31079\" class=\"wp-caption-text\">John Goldstein, CRE attorney and officer at Greensfelder, Hemker &amp; Gale, P.C.,<\/p><\/div>\n<p>The world of commercial real estate is no stranger to major disruptive events. Each turning point tests the ability of investors, developers, landlords and renters to seek new opportunities in the shifting marketplace.<\/p>\n<p>To review the state of the commercial real estate market amid the COVID-19 pandemic, and how it might influence office leasing in the long-term, we sat down with John A. Goldstein, a real estate attorney and officer at <a href=\"https:\/\/www.greensfelder.com\/\" target=\"_blank\" rel=\"nofollow noopener\">Greensfelder, Hemker &amp; Gale, P.C.<\/a>, in Chicago. With more than 30 years of experience as a real estate attorney, he previously worked as a name partner at Harris Kessler &amp; Goldstein.<\/p>\n<p>&nbsp;<\/p>\n<h2>Q: Could you start by telling us a little bit about your background and your career as a real estate attorney?<\/h2>\n<p>I\u2019ve been practicing commercial real estate law since 1984, so I\u2019ve witnessed firsthand the ups and downs and the highs and lows in the real estate market. \u00a0I am based in Chicago, but my practice is nationally focused, and I handle international transactions as well.\u00a0 When the market is up, I represent clients in the purchase and sale of real estate; office, retail, industrial and manufacturing leasing; real estate financing; and land use and real estate taxation.\u00a0 I\u2019ve always been in private practice, and I\u2019ve been a partner at various-sized law firms.\u00a0 In all these years, I\u2019ve never thought about practicing in any other area of the law!<\/p>\n<h2>Q: How have you seen the industry evolve in the past years?<\/h2>\n<p>It\u2019s an entirely different world than when I started out in the mid-1980s.\u00a0 For one thing, the <a href=\"https:\/\/www.commercialcafe.com\/blog\/10-top-tools-cre-brokers\/\" target=\"_blank\" rel=\"noopener\">development of technology has changed not only how attorneys practice law, but also real estate needs in general<\/a>.\u00a0 Because of technological constraints, everything was slower in the past.\u00a0 We used regular mail and overnight delivery and spent countless hours in closing rooms getting deals closed.\u00a0 Now, everything is immediate and virtual (the pandemic notwithstanding), which in my opinion is a great thing!<\/p>\n<p>Where a tenant would have required interior space for file storage 20 years ago, today everything is paperless and \u201cdead\u201d space is a loss leader.\u00a0 Where a purchaser would have spent countless hours gathering and organizing due diligence items, cloud-based deal rooms allow us to get right to the actual review.\u00a0 Where hours were spent signing loan documents, DocuSign makes execution simple.\u00a0 I\u2019m predicting that the whole make-up of office space will be radically different in the very near future \u2013 but more on that later.<\/p>\n<h2>Q: What would you say differentiates the commercial real estate market in Chicago from other major markets in the United States?<\/h2>\n<p><a href=\"https:\/\/www.commercialcafe.com\/blog\/chicago-school-architecture-101\/\" target=\"_blank\" rel=\"noopener\">Chicago is a city identified by its architecture<\/a>.\u00a0 After most of the city was destroyed by the Great Fire in 1871, Chicago rose anew and saw the construction of some of the most prestigious buildings designed by some of the most celebrated architects of their day.\u00a0 Daniel Burnham, Louis H. Sullivan, Mies van der Rohe, Helmut Jahn and Frank Lloyd Wright, just to name a few, all left their mark on the city.\u00a0 That brings a certain pride to Chicago, and users of commercial real estate embrace and celebrate that tradition.\u00a0 Where you house your employees, where you build your plant, where you sell your products &#8212; real estate entrepreneurs take into account the prestige of Chicago architecture, whether consciously or not, when making these decisions.\u00a0 The city is also a financial hub, which attracts businesses from all over the world.<\/p>\n<h2>Q: Considering the COVID-19 outbreak, what are your thoughts on the CRE market in the US today in terms of trends and challenges?<\/h2>\n<p>We\u2019re going to be seeing changes in the near future \u2013 we have to.\u00a0 With current situations firmly in place, such as lease terms not yet expiring, loans not yet maturing and purchases and sales in flux, these changes may not come about immediately, but the pandemic and the remote work situation have made it possible to test the waters for alternatives to the status quo.\u00a0 For one thing, working at home frees up office space and offers the possibility of a \u201chotel style\u201d work situation in which employees can sign up for available space, come into the office and plug in for a day\u2019s work.\u00a0 The days of dedicated offices (and certainly large corner offices) will be less of a priority when making plans for office space use.\u00a0 This affects landlords who have purchased, and now lease, real estate and their lenders who make loans based upon real estate as collateral.\u00a0 It\u2019s up and down the food chain.\u00a0 For now, until we see how things ultimately play out, there are a lot of questions still to be answered.<\/p>\n<h2>While many contracts account for the effects of disruptive events, what is your opinion on the upsets caused by COVID-19 and the changes in working arrangements? Might some of these lead to unique claims or litigation?<\/h2>\n<p>The COVID-19 pandemic has caused landlords and tenants to reevaluate their needs in the long term and analyze their existing leases in the short term:\u00a0 What are the force majeure provisions? (These are the so-called acts-of-god provisions which permit non-performance based upon the occurrence of certain acts.)\u00a0 Is non-payment of rent permissible under a force majeure clause?\u00a0 Do the documents contain buy-out or lease termination clauses?\u00a0 What are the assignment and sublease provisions?\u00a0 COVID-19 has also made borrowers and lenders closely examine their loan documents to determine what financial covenants have to be met, what modifications to loan terms can be made, and what are the pros and cons of \u201cgiving\u201d the property back to the lender by foreclosure, deed in lieu of foreclosure or other means?\u00a0 Purchasers and sellers of real estate are looking for outs contained in the purchase agreement and are scrutinizing due diligence timelines to see what they can do in the times of the pandemic.<\/p>\n<h2>Q: Have you noticed any changes in lenders\u2019 attitude towards investing in commercial real estate, especially larger office buildings, now that several tenants are considering remote work in the long term?<\/h2>\n<p>Lenders look to rental payments as one of the primary sources of repayment when making a real estate loan.\u00a0 If the property they\u2019re lending on is fully-leased with quality leases, the borrower has the best chance at timely paying debt service on the loan.\u00a0 So, lenders are paying close attention to their borrowers\u2019 leases now more than ever to ensure repayment, which means that the negotiations between landlord and tenants are critical.\u00a0 Landlords need tenants to occupy their spaces, but tenants are hesitant to enter into long-term leases in today\u2019s uncertain market. \u00a0Everything is in flux until things settle down and we can return to some sort of normal existence.\u00a0 One thing is certain: there will always be a need for space, which means there will always be landlords, tenants, sellers, purchasers and lenders.<\/p>\n<h2>Q: In your experience, what are the most popular concessions that tenants with long-term office leases try to negotiate for? Do you think the effects of the pandemic might expand beyond the present context?<\/h2>\n<p>Tenants want flexibility.\u00a0 Landlords want certainty and need to satisfy their lenders.\u00a0 There has to be a meeting somewhere in the middle.\u00a0 Tenants in today\u2019s world are looking for flexible force majeure language, early lease termination options, space configurations as reflected in lease work letters that are flexible and technology-friendly, and liberal assignment and subleasing requirements.\u00a0 Landlords want tight leases, but they realize in this climate they have to give on certain items.\u00a0 Lenders also want their borrowers\u2019 leases to be as tight as possible as well.\u00a0 We should know in the next 12 to 24 months where all this is headed.<\/p>\n<h2>Q: Any other insights that you\u2019d like to share?<\/h2>\n<p>It\u2019s certainly not all bad news.\u00a0 There are some good opportunities available now as well.\u00a0 <a href=\"https:\/\/www.commercialcafe.com\/blog\/sublease-office-space\/\" target=\"_blank\" rel=\"noopener\">Subleases are a great way for an existing tenant to offload all or part of the expense of unwanted space<\/a>, and prospective tenants can often move into subleased space without incurring prohibitive build-out costs.\u00a0 Often, these spaces are move-in ready.\u00a0 Purchase prices of real estate are all over the place, changing all the time.\u00a0 With a watchful eye, savvy due diligence and keen insight, there are good deals to be found in these unclear times.\u00a0 But care must be taken because things are changing so rapidly that what appears to be a great deal today may not be so tomorrow.\u00a0 In all cases, it\u2019s always a good idea to have documents and specific relevant provisions reviewed by legal counsel in order to avoid misunderstandings and falling into traps.<\/p>\n<p><strong>Interested in being interviewed for our Expert Insights series? Feel free to reach out to us at\u00a0<\/strong><a href=\"mailto:contributors@commercialcafe.com%3C\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>contributors@commercialcafe.com<\/strong><\/a><strong>\u00a0or check out other articles from our series\u00a0<\/strong><a href=\"https:\/\/www.commercialcafe.com\/blog\/category\/commercial-real-estate-news\/qa\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>here<\/strong><\/a><strong>.<\/strong><\/p>\n<div id=\"highlighter--hover-tools\" style=\"display: none;\">\n<div id=\"highlighter--hover-tools--container\">\n<div class=\"highlighter--icon highlighter--icon-copy\" title=\"Copy\"><\/div>\n<div class=\"highlighter--separator\"><\/div>\n<div class=\"highlighter--icon highlighter--icon-change-color\" title=\"Change Color\"><\/div>\n<div class=\"highlighter--separator\"><\/div>\n<div class=\"highlighter--icon highlighter--icon-delete\" title=\"Delete\"><\/div>\n<\/div>\n<\/div>\n<div id=\"highlighter--hover-tools\" style=\"display: none;\">\n<div id=\"highlighter--hover-tools--container\">\n<div class=\"highlighter--icon highlighter--icon-copy\" title=\"Copy\"><\/div>\n<div class=\"highlighter--separator\"><\/div>\n<div class=\"highlighter--icon highlighter--icon-change-color\" title=\"Change Color\"><\/div>\n<div class=\"highlighter--separator\"><\/div>\n<div class=\"highlighter--icon highlighter--icon-delete\" title=\"Delete\"><\/div>\n<\/div>\n<\/div>\n<div id=\"highlighter--hover-tools\" style=\"display: none;\">\n<div id=\"highlighter--hover-tools--container\">\n<div class=\"highlighter--icon highlighter--icon-copy\" title=\"Copy\"><\/div>\n<div class=\"highlighter--separator\"><\/div>\n<div class=\"highlighter--icon highlighter--icon-change-color\" title=\"Change Color\"><\/div>\n<div class=\"highlighter--separator\"><\/div>\n<div class=\"highlighter--icon highlighter--icon-delete\" title=\"Delete\"><\/div>\n<\/div>\n<\/div>\n<div id=\"highlighter--hover-tools\" style=\"display: none;\">\n<div id=\"highlighter--hover-tools--container\">\n<div class=\"highlighter--icon highlighter--icon-copy\" title=\"Copy\"><\/div>\n<div class=\"highlighter--separator\"><\/div>\n<div class=\"highlighter--icon highlighter--icon-change-color\" title=\"Change Color\"><\/div>\n<div class=\"highlighter--separator\"><\/div>\n<div class=\"highlighter--icon highlighter--icon-delete\" title=\"Delete\"><\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>What are the most popular concessions that tenants with long-term office leases try to negotiate for? Considering the COVID-19 outbreak, did lenders\u2019 attitude towards investing in commercial real estate, especially larger office buildings, change? We sat down with John A. Goldstein, a real estate attorney and officer at Greensfelder, Hemker &#038; Gale, P.C., in Chicago to talk about the current changes in the CRE marketplace.<\/p>\n","protected":false},"author":56,"featured_media":28415,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4014,39,1335],"tags":[],"class_list":["post-31076","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-office","category-qa","wpautop"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Expert Insights: The Future of Office Leases in Chicago - CommercialCafe<\/title>\n<meta name=\"description\" content=\"To review the state of the commercial real estate market amid the COVID-19 pandemic,, we sat down with John A. 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