Prospects for Chicago’s Real Estate MarketChicago Association of REALTORSJanuary 11, 2018

Presented by Amy de ValletSenior Director

Tribune Real Estate Holdings, LLC.

• Tribune Real Estate Holdings was formed in

2013 after emergence from bankruptcy

• New Tribune Company management saw

opportunity to maximize value of real estate

assets to create shareholder value

• Since formation, we have sold over $700mm in

real estate assets and anticipate as much as

another $400mm in the coming years

TRIBUNE REAL ESTATE HOLDINGSMAXIMIZING LEGACY REAL ESTATE IN A DIGITAL ECONOMY

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• Owned 76 properties in 23

states upon formation of

the holding company

• 8M SF on 1,200 acres

• Mix of urban office and

industrial, and large

suburban/rural parcels

• Large presence in Chicago,

Los Angeles, New York

OUR LEGACY FOOTPRINT

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OUR APPROACH

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Our experience as a holder, leaser and

renter of property advises our real

estate approach

A private equity approach to real estate

holdings:

• Define & execute optimal strategies for each

asset

• Perfect entitlements and enhance/improve

zoning

• Enter JV agreements with local operators and

monetize when appropriate

GROWTH AND DEMAND IN

CHICAGO’S URBAN CENTER

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• Chicago’s Downtown Central Business District is growing

• City of Chicago is modernizing policies to encourage growth

• Educated millennials overwhelmingly settle downtown, prefer CBD to suburbs at a 15:1 ratio

• They demand live/work/play environments that emphasize connectivity (digital & physical)

• Urban centers are replacing suburban campuses – and businesses are relocating to Chicago

URBAN OPPORTUNITY: SUBURBAN FLIGHT

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• They’re looking for talent, unique and creative space and to use their presence in an urban setting to further define their brand

URBAN OPPORTUNITY: CORPORATE TRENDS

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So what does this mean for land owners and developers – especially in a large

gateway market like Chicago?

WE’RE BULLISH…

BUT THERE ARE CHALLENGES

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• Old buildings with aging infrastructure

• Significant transportation infrastructure needs

• Absence of regional planning with widespread, cross-jurisdiction political support and cooperation

• Potential for excess inventory

L I N C O L N YA R D S

28 acres

O L D P O S T O F F I C E

2.5M sq. ft.

M I C H A E L R E E S E

49 acres

G O O S E I S L A N D / M O R TO N S A LT

4.25 acres

T H E R I V E R D I S T R I C T

37 acres

R I V E R L I N E

14 acres

T H E 7 8

62 acres

U N I O N S TAT I O N

14 acres

CAN IT ALL BE ABSORBED?

Why are we still bullish?

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Because geography and demographics still matter

THE RIVER DISTRICT37 CONTIGUOUS ACRES BOUNDED BY CHICAGO RIVER, HALSTED, AND GRAND AVENUE

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URBAN CONTEXTNEXUS OF CHICAGO’S MOST DESIRABLE RESIDENTIAL NEIGHBORHOODS

LOGAN SQUARE

BUCKTOWN

HUMBOLDT PARK

2 Mile Radius

STREETERVILLE

29,507

79.1%

1 Mile Radius

RIVER NORTH

16,022

82.7%

THE LOOP

15,812

80.4%

WEST LOOP

FULTON MARKET

55,161

68.1%

WEST TOWN

RIVER WEST

35,077

43.4%

TRI-TAYLOR

7,141

62.6%

WICKER PARK

26,164

78%

GOLD COAST

OLD TOWN

40,133

72.3%

LINCOLN PARK

66,085

82.2%

LAKEVIEW

70,984

83.3%

SOUTH LOOP

PRINTER’S ROW

30,505

78.0%

UNIVERSITY VILLAGE

34,017

43.4%

UKRAINIAN

VILLAGE

11,450

59%

POPULATION ESTIMATEEAST PILSEN

51,527

44.6%

BUCKTOWN

LOGAN SQUARE

85,319

67%

COLLEGE DEGREE

15-30 minute commute (or less) to all of Chicago’s most desirable neighborhoods for millennial talent

250,000 residents (146,000 households) within 2 miles of site

953,000 residents (442,000 households) within 5 miles of site

TRANSPORTATION CONNECTIVITY

CENTRAL LOCATIONTRANSIT CONNECTIVITY

CONVENIENT ACCESS TO MAJOR BUS, TRAIN, BIKE, AND COMMUTER HUBS

• 50% of site within ¼ mile of CTA Blue Line

• CTA Blue goes direct to ORD

• Within ½ mile of 5 CTA train stations (Blue, Brown/Purple, Green)

• Bounded by 3 major bus lines (Halsted, Chicago, and Grand)

• Halsted and Milwaukee are major bike ‘spoke routes’

• 1 mile to Ogilvie / Union Station commuter train system

• There’s good reason to be bullish on Chicago and other gateway cities

• Geography and demographics still matter

• Watch out for oversaturation and challenges for absorption

KEY TAKEAWAYS

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