Crain's Chicago Business

PRICIEST HOMES

A look at how the luxury home market shifted in 2020. PAGE 13

CHICAGOBUSINESS.COM | FEBRUARY 8, 2021 | $3.50

Citadel’s risk: Prying open the black box

fpo

Reddit-fueled court action could force disclosure of closely guarded intel

Ken Griffin

BY STEVE DANIELS

Janet Hayes

5th time’s a charm?

AP IMAGES

All it takes is one judge.

Citadel remains caught in the swirl of anger and confusion over the would-be Reddit revolution in stock investing. As both a participant in the short selling that newly minted day traders attempted to combat and profit from as well as the leading market maker for the trading app many of them used, Ken Griffin’s investment empire is a starring player in the drama, the ending

Crate & Barrel has had a revolving door of CEOs in the past decade, with Janet Hayes the latest. Her challenge: Ushering the retailer into a new era. BY ALLY MAROTTI FOR THE FIRST 50 YEARS of Crate & Barrel’s existence, the retailer only had two CEOs. In the past decade, however, it has churned through five.

The current chief executive, retail veteran Janet Hayes, was quietly hired at the Northbrook-based retailer six months ago. Will she have better luck than her predecessors?

Industry observers are optimistic. Crate & Barrel entered the pandemic with a strong online pres-

ence, allowing it to capitalize on increasing home furnishing sales. But Hayes will face challenges as the economy recovers, and must steer Crate into a new era of retail.

Gordon Segal, who co-founded the company with his wife, Carole, in 1962 and was CEO until 2008, says Hayes’ strong background in See CRATE on Page 17

of which defies easy prediction.

Chicago-based Citadel (the hedge fund) and Citadel Securities (the market maker) are defendants in at least 20 lawsuits around the country so far—most of them purported class actions seeking to recover large trading losses incurred by investors See CITADEL on Page 17

AbbVie sheds light on life after Humira CEO predicts 2 new drugs will mostly fill the gap

BY STEPHANIE GOLDBERG AbbVie is finally offering answers to questions investors have been asking since the drugmaker spun off from Abbott Laboratories in 2012: How badly will the loss of patent protection for AbbVie’s top-selling drug hurt and how long will it take to recover?

For the first time, AbbVie last month gave detailed projections for revenue trends after Humira loses protection from generic competition in the U.S. CEO

Richard Gonzalez told an investor conference that sales will decline when Humira copycats invade the U.S. market in 2023, rise modestly in 2024 and reach high-single-digit growth in 2025 and beyond.

The prediction of a rapid rebound dispels some of the uncertainty that has hovered over AbbVie as it nears the end of a long exclusivity period for its blockbuster drug. Humira sales peaked at $19.9 billion in 2018, See ABBVIE on Page 23

NEWSPAPER l VOL. 44, NO. 6 l COPYRIGHT 2021 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

GREG HINZ

THE TAKEAWAY

Some biz leaders are starting to scout for an alternative to Lightfoot. PAGE 2

The new head of the Chicago Association of Realtors honors her son’s life. PAGE 6

2 FEBRUARY 8, 2021 • CRAIN’S CHICAGO BUSINESS

A new mayor? Some biz leaders are talking.

A

industries are unhappy.

“Confidence in (Lightfoot’s) ability to get things done has gone down in the past year . . . significantly,” says one top business leader who, like most others interviewed, declines to be named for fear of hurting his working relationship with the mayor. “It just doesn’t seem like anything is working.”

“There is increased grumbling,” says another. “There is increased wondering about who (else) will run.”

Lightfoot political and governmental aides are pushing back hard on that narrative.

Among those I heard THERE’S LITTLE DOUBT PEOPLE IN A from—unprompted— RANGE OF INDUSTRIES ARE UNHAPPY. was Mellody Hobson, co-CEO of Ariel Investments and vice chair of World Busirestaurant industries. ness Chicago, the city’s corporate “It’s in the initial phase,” says one recruitment arm. source familiar with what’s occur“The people I talk to say they ring. “They’re starting to make it know how hard (Lightfoot’s) job is clear that, if someone is interested now, and they understand her deciin running, there’s probably supsion-making. They feel like they’re port for them.” being heard,” Hobson said in a In the meantime, there’s little phone call. But even Hobson adddoubt people in a broad range of fter a brutal year in which Mayor Lori Lightfoot has seemed to stumble from crisis to crisis, an open debate has begun in Chicago’s business community about whether to stick by the city’s embattled chief executive as her presumed re-election bid nears—or instead seek someone new.

With the election to be held two years from this month, active efforts to field a business-friendly Lightfoot challenger so far are limited, and mostly concentrated in the real-estate development and

ed, “That doesn’t mean they agree with every decision she’s made.”

The formal response from Lightfoot’s political office: “As she manages and leads our city through a series of unprecedented crises, the mayor remains focused on the job to which she was elected. Politics will come later.”

The crises indeed have been plentiful, from the COVID-19 pandemic—clearly not Lightfoot’s fault—and its social and economic fallout to a continuing spike in high-profile murder and carjacking cases, the plundering of North Michigan Avenue, a looming Chicago teachers strike, city fiscal woes and continued discord with aldermen, with Lightfoot’s City Council floor leader, Ald. Gil Villegas, 36th, recently leaving that post.

Even people in the corporate community who are backing Lightfoot want to see change.

“I’ve told my folks, don’t give up on Lori, ’cause you don’t know what you’re going to get,” says one, fearing a sharp move to the political left. But Lightfoot needs to widen

GREG HINZ ON POLITICS

her staff, boost her fundraising— the mayor’s two campaign committees pulled in less than $1 million last year—and above all “work to find a common ground” with others, that source says. “She seems to want to fight all of the time.”

The names of several potential contenders have surfaced, including businessman and former Rahm Emanuel associate Michael Sacks, county Commissioner Bridget Gainer, and Alds. Villegas and Brian Hopkins, 2nd. All tell me they’re not running. For instance, Sacks, who has a large interest in the Chicago Sun-Times, says in a statement: “I am only interested in helping the mayor in this challenging period and recently supported her financially. I am unaware of any group or groups or meetings to discuss

anything of the sort. It’s complete nonsense.”

But despite that and similar denials, insiders with firsthand knowledge tell me some business figures have begun to meet and reach out to others.

“I’ve been surprised about the level of interest in the development and restaurant community,” says one person who has been contacted. Restaurateurs are upset about relatively tight reopening rules in the city and the slow return of big trade shows. Some developers say that despite good intentions, permitting and decision-making is going slower than under Emanuel.

Those business people “don’t have a candidate,” says one elected official who turned down a request to run. “They’re looking.”

We’ll soon see if these three are serious about fair maps

D

eadlines are serious business. You don’t need to be a journalist to know that.

And one deadline in particular— Dec. 31—was meant to have meaning. That’s the date by which the U.S. Census Bureau was required to tell the states how many residents should live in each congressional district.

From that simple data point, the entire machinery of electoral mapmaking was supposed to jump into motion.

But it didn’t happen this time.

COVID-19 delayed the census count. The first batch of numbers won’t arrive until April, with more granular data arriving even later.

If this were the world of our civics textbooks, the delay in data would be a problem. Public-minded officials doing their best to draw fair maps, designed to best represent the will of the voters, would be hard pressed to absorb the late-arriving data and meet the state’s constitutional deadline of providing a map

by June 30 this year.

But this is Illinois, one of many states across the country where mapmaking does not work that way because fair representation is not the point of the exercise.

In those states the parties in power use mapmaking, a ritual that plays out once each decade, to protect or even expand their hold on power. In Illinois, the dominant Democratic Party does it; in Wisconsin, the Republicans do.

And the U.S. Supreme Court has bowed out of any effort to address the problem, recently declaring it a political issue that state governments should address.

So, yes, the lack of timely data will make the process more difficult.

There may even be discussion of temporary fixes and adjustments that need to be made, by necessity, because of the delay.

P002_CCB_20210208.indd 2

But don’t be distracted by such rhetoric. Instead, keep your eyes on what really matters. The state’s three key public officials in the mapmaking process—new House Speaker Chris Welch, Senate President Don Harmon and Gov. J.B. Pritzker—all say they oppose gerrymandered maps. What they do over the next several months will tell us if they really mean it.

If Pritzker, Harmon and Welch are serious, they’ll need to change a political system designed to thwart their fair-maps intentions.

Illinois is a “trifecta state,” where one party controls both houses of the Legislature and the governor’s office, too. For Democratic incumbents, this has turned the mapmaking process into a Rube Goldberg perpetual re-election machine.

Just how badly gerrymandered are Illinois’ maps? In the elections since the 2011 maps were drawn, more than 95 percent of incumbents seeking re-election were returned to office. From 2012 to 2016, more than half the incumbents in the General Assembly faced no general election contest at all.

It does not need to be this way.

When my organization, the Better Government Association, commissioned a pair of fair maps, we pointed the way toward what can happen if maps are not drawn by partisans.

Placed side by side with the current ones, the BGA maps showed that fair-mapping practices produced more compact, geographically sensible boundaries. The districts were more competitive, and they safeguarded representation for minorities and other communities of interest.

The biggest change was that incumbency was no longer protected: Voters would choose their representatives, not the other way around under the current system.

There still is hope for the 2021

maps. The delays in census data heightens the urgency for Welch, Harmon and Pritzker to put weight behind their fair-mapping words.

Their best way forward would be to pass and sign a bill to establish an independent public commission to draw the maps.

If they won’t go as far as they should, they could at least make progress by committing to meaningful public hearings, with follow-up hearings after the maps are drawn, so the public can hold the mapmakers responsible for their work.

The legislative leaders should

DAVID GREISING ON GOVERNMENT

commit that districts will be drawn without regard to where incumbents live. While such an idea may be viewed by old Springfield hands as a non-starter, it would be a most effective tool in slaying the incumbents-first approach that has distorted past maps.

The governor, for his part, could

say he will consider signing a map only if it was drawn according to those two minimum standards.

Crain’s contributor David Greising is president of the investigative watchdog Better Government Association.

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CRAIN’S CHICAGO BUSINESS • FEBRUARY 8, 2021 3

Virus targets another Boeing business

Ahead caption here please

CEO warns COVID relief could squeeze defense spending

BY JOHN PLETZ

COVID ERA’S NEW MATH:

OFFICE SPACE NEEDS Taking stock of where employees want—and need—to work WINNING OVER YOUNG, URBAN-DWELLING talent in a tight labor market drove many companies to open downtown offices over the past decade.

Now those same companies are trying to figure out where and how employees want to work in a post-COVID-19 world.

With vaccine distribution gaining traction, business leaders pondering their future workspace needs are taking stock of where their employees live and who should be in an office every day.

A global survey of more than 40,000 people in the fall by real estate brokerage Cushman & Wakefield showed 73 percent of respondents expect their companies to offer “flexible working practices” moving forward. But it also found that workers—particularly younger ones—were strug-

BY DANNY ECKER

gling to both take time away from work and maintain personal connections to company culture.

The Cushman report suggests the new normal for many workers will be a “total workplace ecosystem” that combines an employee’s home, office and “third places” such as cafes and co-working.

The challenge for employers pondering future real estate needs: making long-term decisions based on what they hope will be short-term circumstances. But the feedback workers are providing now could offer some clues about the best way forward.

Crain’s spoke to several companies about what they’ve learned from their workers so far.

ZAC OSGOOD

CALCULATING

“WHEN WE DID SURVEYS, VERY FEW PEOPLE (SAID) ‘I DON’T PLAN TO EVER RETURN TO THE OFFICE.’ . . .SOME (EMPLOYEES) ARE SAYING THAT THERE’S A DRAW TO HAVING A PLACE TO GO.” Jace Mouse, CEO, PerkSpot

See OFFICE SPACE on Page 21

After crippling Boeing’s commercial jet sales, the coronavirus now threatens its other major business.

CEO David Calhoun is warning that virus relief efforts are likely to siphon government dollars away from defense spending, which would hurt Boeing operations that make fighter jets, tankers, helicopters and other military equipment.

“The scale of government spending on COVID-19 response has the potential to add pressure to global defense spending in the years ahead,” Calhoun told analysts Jan. 27 when Boeing reported its worst loss ever, $11.9 billion for 2020.

Boeing counts on its defense unit to offset cyclical downturns in commercial aviation, and vice versa. Now it faces the worrisome possibility that both businesses will be declining at the same time.

Defense has provided muchneeded stability during the tailspin that has engulfed the company for the past 24 months, starting with the 737 Max crisis and followed by COVID-19. Defense accounted for 45 percent of Boeing’s $58.2 billion in revenue last year, roughly double the share two years earlier.

Still, defense hasn’t generated anywhere near the growth needed to make up for lost commercial revenue. Sales of military aircraft, weapons and space equipment and services have been flat the past three years at about $26 billion, while commercial jet sales plunged by $41.3 billion.

Rival defense contractors, See BOEING on Page 20

Springfield gets ready for reform

BY A.D. QUIG Springfield lawmakers have a new speaker, a clean legislative slate and lots of unfinished business. Near the top of the list: policing themselves.

On the table are proposed ethics reforms aimed at curbing practices that have made Illinois a byword for political corruption and Springfield a

P003_CCB_20210208.indd 3

target-rich environment for federal prosecutors. A widening dragnet snared Sen. Tom Cullerton, former Rep. Luis Arroyo and former Sens. Martin Sandoval and Terry Link, whose cases are still winding through courts.

Sandoval and Link have both pleaded guilty. Cullerton and Arroyo pleaded not guilty.

Even Michael Madigan, the dominant force in state politics

for four decades, was forced to step down as House speaker as associates faced federal charges.

He hasn’t been charged with wrongdoing.

Good-government advocates say the crackdown has awakened lawmakers to the need for change. But the chances of real reform that puts a stop to the methods—many of them perfectly legal—by which pol-

iticians enrich themselves depends on how far leaders like new Speaker Chris Welch are willing to go.

Reformers hope to “create a culture of accountability instead of a culture of impunity,” says Alisa Kaplan, executive director of good-government group Reform for Illinois. “Ideally, you get to these problems before they escalate See SPRINGFIELD on Page 22

WTTW NEWS

Tough proposals will test leaders’ commitment to eliminating corruption

Illinois House Speaker Chris Welch

2/5/21 4:34 PM

4 FEBRUARY 8, 2021 • CRAIN’S CHICAGO BUSINESS

JOE CAHILL

CHICAGO COMES BACK

ON BUSINESS

term growth issues that plagued Mondelez and other traditional packaged-foods companies before the pandemic. Sluggishness may return when vaccines finally tame the virus, people start eating more meals outside the home again and grocery sales slip.

“The robust growth rates are unlikely to persist” post-COVID, warns analyst Erin Lash of Morningstar.

Concerns about future growth already weigh heavily on packaged-foods shares. Mondelez’s stock is down 5 percent this year.

Van de Put is counting on innovation, marketing and expanded distribution to generate much of the momentum Mondelez will need over the long term.

Feeding acquired product lines into the company’s vast network of retailers also could turbocharge those smaller brands.

Still, the rising cash pile gives Van de Put plenty of ammo to hunt bigger buyouts. Along with the $3.6 billion cash reserve, Mondelez has a $7 billion untapped credit line, and stock worth a combined $8 billion in beverage makers Keurig VAN DE PUT MAY FEEL PRESSURE Dr Pepper and JDE Peet’s. Mondelez has been selling those shares TO PURSUE A MEGADEAL. as it focuses on cookies and chocolate, and the proceeds a lot of targets.” could be used for deals.

Which raises another ques“The company might use that tion: what kind of acquisitions? liquidity for a large-scale transSince succeeding Irene Rosaction,” Bloomberg Intelligence enfeld in 2017, Van de Put has analyst Hoai Ngo wrote Feb. 3. opted for smaller deals that When asked at the investor expand Mondelez’s cookie and conference, Van de Put left the chocolate franchises into fastdoor open to large deals while er-growing niches. There’s been noting some obstacles. Pointing a focus on higher-end brands out that few large food compaand healthier fare. nies sell only snacks, he said “we Van de Put paid $500 million are focused on deals in attractive for Tate’s Bake Shop in 2018, spaces” but added “that doesn’t gaining a foothold in premium mean the deals necessarily have cookies. A year later, the $284 to be small. There’s a lot of inmillion acquisition of Perfect teresting companies around the Snacks gave Mondelez a presworld that are quite sizable.” ence in protein bars. He raised If growth slows significantly the ante last year, paying $1.1 over the next year or so, Van billion for Give & Go, which de Put may feel pressure to sells baked goods to grocery pursue a megadeal like those store bakeries. Last month, that reshaped the industry in Mondelez acquired the shares the last decade. If so, he’d better of vegan chocolate maker Hu be careful. The siren song of that it didn’t already own for an “transformative” M&A has led undisclosed price. many CEOs astray, including his A Mondelez spokesman predecessor. Rosenfeld formed confirms a preference for the company that became “fast-growing bolt-on acquiMondelez in the $19 billion sitions in the premium and merger of Kraft Foods with well-being areas, in segments British candymaker Cadbury, adjacent to snacking, and where then jettisoned the Kraft grocery we see opportunities in highbusinesses in a 2012 breakup. growth international markets to Despite a stable of wellclose gaps in our portfolio.” known brands, Mondelez never Strategically sensible, the delivered the outsize growth deals are nonetheless too small rates Rosenfeld promised. That’s to drive growth at a company something for Van de Put to with $26.6 billion in annual revcontemplate as he decides how enue. COVID-19 has provided to spend all that cash. temporary relief from the longDirk Van de Put’s appetite for acquisitions is growing as cash piles up at Mondelez International.

The giant snack-maker had $3.6 billion in cash as of Dec. 31, triple the amount it had a year earlier. Cash is pouring in as consumers riding out the pandemic at home rediscover Oreos, Ritz crackers and other childhood favorites. Chicago-based Mondelez is generating even more cash from selling off its stakes in ancillary businesses to focus on cookies and chocolate.

“Last year, it was a remarkable year in terms of cash flow,” CFO Luca Zaramella told an investor conference in December.

“Hopefully this year we will do a little bit better than last year.”

Naturally, folks are starting to wonder what Mondelez will do with all that cash. Zaramella said acquisitions will be the No. 2 priority, after internal investment and before share buybacks.

“That is an area where we are potentially going to be more active,” he said. “We are scanning

P004_CCB_20210208.indd 4

Chicago can rebuild as a global innovation capital

JORDAN M. LOMIBAO VIA UNSPLASH

What will Mondelez do with all that cash?

The city has an ambitious recovery agenda. World Business Chicago’s Abin Kuriakose tells how that will accelerate economic opportunity.

BY EMILY DRAKE AND TODD CONNOR Chicago Comes Back is a weekly series on ChicagoBusiness.com providing leadership insights to help your business move forward, written by leadership consultants Emily Drake and Todd Connor.

Drake and Connor facilitate Crain’s Leadership Academy. Drake is a licensed therapist, owner of the Collective Academy and a leadership coach. Connor is the founder of Bunker Labs and the Collective Academy and is also a leadership consultant.

Check out previous installments at ChicagoBusiness.com/comesback.

Chicago has the opportunity to become a global center for innovation in a post-pandemic world.

How does the city’s ambitious recovery agenda play into that?

We talk to World Business Chicago Executive Vice President Abin Kuriakose.

TODD CONNOR: As we enter the second year of a new normal, it seems everything that once was, as it relates to leadership, is being edited and improved, something I find really inspiring. For us, here in Chicago, World Business Chicago is supported as the economic development arm of the city.

Certainly, the economy has gone through its own editing process, to put it mildly. When we think about Chicago coming back, what role does the city have in supporting entrepreneurs and small business?

ABIN KURIAKOSE: Fortunately, there’s some clarity here, at least for the role of WBC: We drive inclusive growth and opportunity for entrepreneurs and their ventures through our distinct and impactful programs and initiatives. More good news is we have a model that works, especially through ChicagoNext—WBC’s tech and innovation initiative, which I lead—where we’ve grown our own portfolio to include flagships like Startup Chicago, the Chicago Venture Summit, ThinkChicago and the Blackstone Inclusive Entrepreneurship Challenge. We’re effective through clarity and repeatability, because

we’re driven by economic development-focused programs, not empty mandates. We actively engage the local ecosystem to build consensus to meet the needs of our local startup and entrepreneurial community.

EMILY DRAKE: We talk a lot in the column about how our emotional and mental health—i.e., our ability to lead—depends on the health of our relationships, and it seems like WBC is walking the walk in that regard. It’s a simple principle, but hardly easy. We have talked quite a bit about the ways in which 2020 was a challenging year. Can you give us a sense as to Chicago’s position in the U.S., or the world for that matter, as it relates to your charter of driving inclusive economic growth?

AK: So much of what matters to a comeback is context, and Chicago is a city with historic strengths and a city rich in diversity and industry. For starters, we have the most diverse economy in the country, abundant talent, strong infrastructure assets, a global corporate base, inspiring entrepreneurs, innovative startups and a central location. All of these attributes and assets have proven vital to our region’s recovery. We also stand out because of our leadership. As our nation faced a long, overdue reckoning last year with the gravity of systemic racism, it’s only reinforced our charter: Racial equity must and will be the cornerstone of any path to inclusive growth for our city. The city’s

recently published Recovery Task Force shares more.

TC: It’s been interesting to hold up inclusivity alongside everything having changed in terms of how we work. We’re adapting to the virtual space, but we’re also exhausted by it. The Chicago Venture Summit is a keystone event for WBC that required rethinking, of course, but while we go virtual with experiences, are there new practices for how we transact and network as entrepreneurs and investors that you expect to stick or evolve?

AK: Virtual fatigue is real. The pandemic forced us to postpone the summit last year, but while that’s true, so, too, is how COVID-19 broke investors’ old habits: Cold emails and Zoom meetings replaced in-person summits and networking dinners, making deal flow faster and cheaper. That’s why we launched Startup Chicago, WBC’s new venture attraction and startup growth program.

In 2021, we’ll be leading a series of targeted virtual engagements connecting local entrepreneurs who are fundraising this year with investors across the Midwest and around the country. Even with all the adjustment, 2020 was a banner year for Chicago, where local startups (got) nearly $3 billion in VC investment, an all-time high since we started recording the data.

ED: You’re giving us a lot to be optimistic about, Abin. Any final thoughts on how WBC will sustain this ambitious charter? To support economic growth and position Chicago as a leading global city?

AK: I know it’s cliche, but we’re all in this together. The work we do at WBC is grounded in that mission.

If you are passionate about seeing Chicago as a leading global city for technology and innovation, we’re ready to hear from you.

2/5/21 12:01 PM

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6 FEBRUARY 8, 2021 • CRAIN’S CHICAGO BUSINESS

THE LUXURY COLLECTION: WINTER PORTFOLIO Advertising Section

THE TAKEAWAY

Nykea Pippion McGriff Pippion McGriff in October became the first Black woman to head the Chicago Association of Realtors in its 137-year history.

Pippion McGriff, who lives in Woodlawn, was a real estate agent at Dream Town for 15 years. She’s now Coldwell Banker’s manager of brokerage services in the Gold Coast. She declines to give us her age. By Dennis Rodkin

>

Welcome to I S S U E 3 5 | J A N UA RY/ F E B R UA RY 2 0 2 1

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Explore the latest offerings at LuxuryCollectionMag.com

You’re the mother of two sons, whose relationship you’ve said is inspirational.

Xavier and Artie were 10 years apart, but they were inseparable.

Artie was about 18 months when we discovered he has autism. Xavier was the most amazing big brother.

He became Artie’s protector, Artie’s friend, Artie’s go-to person. Xavier was my role model in how patient he was with Artie.

Six months after Xavier’s death, you became the president of the Women’s Council of Realtors Illinois. Following that were roles at CAR that culminated in you becoming the association’s president last fall. This was in part a tribute to Xavier?

I absolutely had to make good on my promise to him. In the Chicago real estate market, specifically with larger brokerages, there are very few managing brokers who are women, and an even smaller number who are people of color.

For many people of color who want to lead, they may only have the opportunity if they open their own brokerage. As I stepped into this role for Coldwell Banker Realty, it was important to me to be surrounded by a leadership team who support a diverse culture and is collaborative.

>

<

You lost Xavier to gun violence in 2017, in what was believed to be a robbery of his cellphone.

You’ve said he inspired you to go after leadership roles.

Xavier (who was in AmeriCorps, working with disadvantaged youth in Lawndale) was making an impact with Artie and with students. They would write him letters about his patience helping them understand math. Fifth graders saying (he) had impacted their lives.

I was on committees, but I wasn’t really involved (in service or leadership). A few weeks before he was killed, I sort of flippantly told him I would get more involved. He said, “You absolutely need to.”

>

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How have you honored Xavier during your CAR presidency?

Through the CAR Foundation, I founded the Xavier O. Joy Higher Education Scholarship, which provides an opportunity for young men in our communities to attend Morehouse College. Xavier (who attended Morehouse for a year) lived the Morehouse mission, which is to develop men with disciplined minds who will lead lives of leadership and service.

> And there’s more coming, you’ve said.

The launch of the association’s leadership development hub, which will focus on leaders of color when it is launched, also speaks to the sense of community and leadership development that Xavier was passionate about. He was a steward of his community and communities of color who are often overlooked.

P006_CCB_20210208.indd 6

2/5/21 11:57 AM

CRAIN’S CHICAGO BUSINESS • FEBRUARY 8, 2021 7

Some bright spots for shops weathering the pandemic

In North Lawndale, business owners position themselves to survive—including one that opened just days before the shutdown last spring The North Lawndale community on the West Side is not known for having a robust economy. But since the pandemic began, business has increased for one family-owned health food store.

“The pandemic has been good for us. Since the pandemic began, sales have increased by 20 percent,” says Rha-Kera Barney-Sutton, manager of Barney’s New Life Health Foods store. The pandemic “has made people more conscious about wanting to take care of their bodies.” Her late grandfather started the business in 1980.

“The pandemic has been hard on everyone, especially people whose immune systems were already compromised. It is those groups of people who have become our biggest customer base,” she adds. “We are seeing customers we haven’t seen in a long time, and now they’re coming back more frequently.”

The store at 3141 W. Roosevelt Road sells a variety of products, such as vitamins, vegan items, supplements for diabetes and soaps. In addition to the revenue increase, Barney-Sutton says it has helped that her business owns the store building, did not apply for any grants or loans and has not had to lay off any of its five employees.

“People may say we are lucky to be doing good during a pandemic, and they would be right. Things have worked out well for us and I

WENDELL HUTSON

BY WENDELL HUTSON

Rha-Kera Barney-Sutton manages Barney’s New Life Health Foods store, which her family founded in 1980. She says sales are up 20 percent since the pandemic began.

is 87 percent Black, 9 percent Latino and 3 percent white. The median household income is $26,781, compared with $55,198 citywide.

As shops face challenges during a pandemic that’s hit other small businesses hard, the North Lawndale Chamber of Commerce is working to help shop owners identify resources available that would help keep their doors open, says Rodney “PEOPLE MAY SAY WE ARE LUCKY TO Brown, executive direcof the chamber.

BE DOING GOOD DURING A PANDEMIC, tor“We are talking about a community AND THEY WOULD BE RIGHT.” that was already strugRha-Kera Barney-Sutton, manager, gling commercially, Barney’s New Life Health Foods store and now the pandemic hits, which did nothing hope it stays that way,” adds Bar- but deliver a bigger hit on us,” says ney-Sutton, who says she expects Brown. “This is why the chamber to inherit the business from her is working to help keep businesses father, Raymond Barney. “This open, especially those small busibusiness has been in my family for nesses that might not have large more than 30 years, and I want to cash reserves.”

Brown compared the pandemic keep it that way.”

North Lawndale has nearly to a major health ailment.

“We are not talking about a cold 34,000 residents. The population

here. The pandemic is like getting pneumonia, and we know pneumonia can kill you if not treated immediately and correctly,” says Brown. “It’s important that businesses do what is in their best interest to stay afloat, while allowing them to bounce back and not be hindered in the long run.”

‘MOSTLY GOOD’

For Winston Reed, owner of Cut Right Barber & Beauty Salon at 811 S. Pulaski Road, the pandemic has been booth good and bad for his business, “but mostly good,” he says.

Reed says he opened his shop on March 9, four days before Gov. J.B. Pritzker ordered a mandatory shutdown for all nonessential businesses—including barbershops.

“I was shut down for two months and was stuck paying rent for an empty shop,” recalls Reed.

“I used my personal money to pay the $1,300 monthly rent until I was able to reopen and get things going again.”

He added that if another mandatory shutdown occurs, he doubts if he would be able to reopen. Many businesses shuttered their doors after the shutdown last year, including many small businesses.

But the pandemic has benefited his shop “because it showed that hair care is a necessity,” he says.

“Try going two months without a haircut or for a woman to go without getting her hair pressed, permed and so on,” says Reed. “No one wants to walk around without looking their best, especially if they work in an office where appearance is paramount. Now customers are coming every day we’re open and at a steady pace, too.”

And rather than take out a loan or apply for grants, Reed says he reduced expenses at the shop during the shutdown.

“I had cable, internet and electricity disconnected to save money. And I canceled my property insurance, which luckily did not come back to haunt me,” says Reed. “The looting spree that

happened last summer damaged nearly every business around here except mine. Had my shop been damaged, I would have been on the hook for repairs since I had no insurance.”

And while Reed’s shop nears its one-year anniversary, a longtime North Lawndale resident started an online dessert business one month after being laid off in May from Rush University Medical Center.

Ida Nelson, a 38-year-old single mother who had been an executive assistant to a vice president at the hospital, says she initially started selling ice cream as a way to make ends meet. Then she grew it into Ida’s Artisan Ice Cream & Treats.

“I bought an ice cream machine and started selling ice cream to make extra money. Before I knew it, I had a demand for my ice cream, and now it is my new career,” Nelson says.

Nelson lives in Bronzeville with her five children, ages 21, 16, 12, 10 and 4. But she was raised in North Lawndale, which is where the ice cream is manufactured.

“Eventually I may open a brickand-mortar store, but for now, online is working fine for me,” says Nelson. “A lot of small businesses are having a hard time paying their rent, which is a big expense, and as long as this pandemic is here, I want to keep my costs to a minimum.”

Whether brick-and-mortar, online or home-based, the West Side neighborhood cannot afford to lose any businesses because it already lacks resources, says Ald. Michael Scott, 24th, whose ward includes North Lawndale. He detailed a number of steps to boost business.

“I am attempting to bring back businesses in a major way by partnering with DRW, a nonprofit organization in North Lawndale, and the Steans Family Foundation. Our goal is to bring the first sit-down restaurant to North Lawndale,” says Scott. “But as far as helping businesses, I am working with Cook County Commissioner Dennis Deer to host a workshop that will help business owners apply for a loan from the (federal) Paycheck Protection Program.”

Big Evanston apartment tower hits the market again The 221-unit apartment building on the Chicago border last sold for $46 million in 2016

BY ALBY GALLUN A Dallas investor has put a 17-story apartment tower in Evanston up for sale for the second time in two years, testing a market muddling through a COVID-induced slowdown.

Crescent Real Estate has hired the Chicago office of CBRE to sell 415 Premier, a 221-unit building on the border of Evanston and the Chicago neighborhood of Rogers Park. Crescent paid $46 million for the property in 2016 and put it on the market in 2018, but the building never sold.

The investment market for big Chicago-area apartment buildings has cooled off considerably since then, and it’s hard to determine exactly what’s happened to multifamily values because so few properties have traded since the coronavirus pandemic began last year.

In the most recent big deal close to Evanston, Ravenswood Terrace, a 150-unit property in the Chicago neighborhood of Ravenswood, sold in August for $46 million—less than the $48.1 million it fetched in 2016. But optimism about the economy and real estate market is growing amid the COVID-19 vac-

cine rollout, and suburban Chicago apartment occupancies and rents have held up well over the past year, even as the downtown market has suffered.

Built in 2008, 415 Premier is 92.8 percent occupied, with the average apartment renting for $1,638 per month, or $1.97 per square foot, according to a CBRE marketing brochure. The building at 415 W. Howard St., just down the street from the CTA’s Howard el stop, has an Evanston address but is isolated from the Evanston market. The building, which overlooks a big CTA rail yard, is a good 30-minute

walk to downtown Evanston.

CBRE is pitching 415 Premier to a category of investors that seek to boost the value of buildings by fixing them up and raising rents.

‘TREMENDOUS OPPORTUNITY’

“415 Premier is truly the most reasonably priced provider of luxury high-rise apartment living in the area which allows the next owner the tremendous opportunity to make thoughtful improvements to the unit interiors and capture significant upside without competing head-to-head with newly constructed buildings,” the CBRE brochure says.

A CBRE executive declines to

comment. A representative of Dallas-based Crescent did not respond to requests for comment.

If 415 Premier fetches close to what it sold for in 2016, it would be the most paid for an Evanston apartment building since December 2017, when the Park Evanston changed hands for $127 million, according to Real Capital Analytics, a New York-based research firm.

Another big Evanston property, Evanston Place near Northwestern University, hit the market last fall with an expected sale price of about $70 million. But its owner, Denver-based Aimco, took it off the market as part of a broader restructuring.

8 FEBRUARY 8, 2021 • CRAIN’S CHICAGO BUSINESS

Local commercial property sales hit 10-year low With buyers and sellers not seeing eye to eye on price as COVID-19 rocked the economy, sales plummeted in 2020

BY DANNY ECKER The deepest recession in more than 80 years and the lingering fog of the COVID-19 pandemic added up to a predictable outcome for commercial property sales in 2020: the lowest deal volume in a decade.

Investors last year traded just under $11.5 billion of Chicago-area commercial real estate, a 32 percent decrease from 2019, according to data from research firm Real Capital Analytics. The last time local commercial property sales posted a lower figure was 2010, when just $6 billion of real estate changed hands.

The numbers lay out the severe impact of a public health crisis that has stifled the global economy for nearly a year and has been especially painful for big urban centers like Chicago that have largely emptied out since March.

But thanks to some record-setting downtown office deals and the rise of online shopping fueling demand for the area’s massive inventory of industrial properties, local sales fared about as well as the U.S. average. Commercial property sales nationwide last year totaled $410 billion, down 31 percent year over year, according to RCA. The main culprit behind the drop in sales volume is that investors have wildly different views on fair market value of commercial properties, says RCA Senior Vice President Jim Costello.

“You have owners of these buildings looking at prices set a year or two years ago saying that, if this thing is temporary, they don’t

DEAL DROUGHT With buyers and sellers not seeing eye to eye on price amid the pandemic, commercial property sales volume plummeted in 2020.

COMMERCIAL REAL ESTATE SALES $25.0 billion

$11.48 billion

20.0 15.0 10.0

BY PROPERTY TYPE $5.24 billion Industrial down 11.9% from 2019

$1.82 billion Apartments down 54.3% from 2019

$2.22 billion Office down 29.1% from 2019

$1.44 billion Retail down 38.4% from 2019

5.0 0

’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20

Source: Real Capital Analytics

want to give up value and sell at a cut-rate price,” he says. “And the buyers are not willing to come in except at a low cost because they don’t want to take the risk that (the recovery) takes longer. Unless sellers are forced to make a decision, nothing’s going to happen.”

That was especially the case for the apartment market, which was booming in downtown Chicago with new construction and rising rents before the pandemic. Sales of Chicago-area apartment buildings last year fell by 54 percent from 2019 to $1.8 billion, according to RCA. That was a far steeper fall than the 27 percent drop-off nationally.

PROPERTY TAXES

Part of the reason apartment deals fell by so much locally was the plight of dense urban areas, Costello says, but it may also

$358.4 million Seniors housing and care down 7.9% from 2019

have been a product of investors concerned pre-COVID about impending 2021 property reassessments under Cook County Assessor Fritz Kaegi. Those are expected to jack up property tax bills for apartment building and other commercial property owners, based on Kaegi’s reassessments in other parts of the county over the past two years.

Investors “were in the middle of trying to figure out how to price everything, and then COVID hits and it puts people on the sidelines for a bit trying to see how things shake out,” Costello says.

There are lots of questions about the future of office buildings, too, after nearly 11 months of many companies operating with remote workers. But some deals early in the year and others during the pandemic that offered buyers stable cash flow helped

$389.2 million Hotels down 65.8% from 2019

prop up Chicago-area office sales to $2.2 billion in 2020. That 29 percent year-over-year decrease outperformed the 39 percent decrease nationwide, according to RCA.

OFFICE DEALS

Properties with high-credit tenants tied to long-term leases sold at a premium, such as the $412.5 million sale in October of the McDonald’s headquarters and the nearly $87 million sale of Mondelez International’s Fulton Market headquarters in April, which set a record for the highest price per square foot paid for a Chicago office building.

Other big downtown office deals that closed were the $376 million sale of 333 S. Wabash Ave. to a joint venture led by New York-based investor Michael Shvo and Deutsche Finance America,

and the $210 million sale of 225 W. Wacker Drive to San Francisco-based Spear Street Capital.

Chicago-area industrial property sales were down for the year by 12 percent to $5.2 billion, slightly better than the 14 percent U.S. decrease nationwide. That sector has been one of the best performing in recent years as companies hunt for warehouses to store and distribute products purchased online—a consumer behavior that got a big boost from the pandemic with people stuck at home.

The year even saw the highest price ever paid for a single industrial property in the Chicago area when private-equity firm KKR paid $176 million for two Amazon fulfillment center warehouses in Kenosha, Wis. Industrial real estate’s success has come at the expense of retail properties, where sales have fallen 38 percent year over year. That was not as steep as the 42 percent dip nationwide, but came after a year in which local retail property sales fell by 34 percent, according to RCA. Local hotel sales suffered the most drastic decrease at 66 percent, hitting the lowest mark since 2009—though that was on par with the 68 percent drop-off nationally. The virtually frozen convention and tourism industries overwhelmed hospitality properties with financial distress, though the carnage has yet to translate into a flood of distressed asset sales as some hotel owners and lenders expect a travel boom as soon as the second half of 2021 if the pandemic subsides.

Allstate losing auto customers at fastest clip in decades The insurer has made growth and market share gains a top priority, but 2020 was a year of slippage as the company posted the worst retention numbers for auto policies since at least 2001

BY STEVE DANIELS The COVID-fueled price competition among auto insurers took its toll on Allstate in 2020.

The Northbrook-based company, which prides itself on how well it holds onto customers once they join, posted the worst retention numbers in recent memory last year. For 2020, Allstate’s auto policy renewals for its namesake brand, which accounts for a majority of its revenue, were 87.5 percent, down from 88.0 percent in 2019. It was the worst performance on that metric since at least 2001, according to investor disclosures.

Not coincidentally, that led to a 0.5 percent decline in policies at year-end, to 21.8 million, according to earnings data released Feb. 3. By contrast, Mayfield Village, Ohio-based Progressive, consistently along with Geico the fastest growing of the big U.S. auto insur-

P008_CCB_20210208.indd 8

ers, boosted its auto policies by 11 percent in 2020, according to a Securities & Exchange Commission filing.

The slippage flew in the face of one of CEO Tom Wilson’s top priorities, which is for Allstate to add market share after years of losses to the likes of Geico and Progressive. He’s pursuing what he calls a “transformative growth” plan, in which the company intends to compete hard in sales over the internet and phone, as well as through independent agents. Most of the company’s business continues to come through its army of agents selling only the Allstate brand.

In a conference call with analysts last week, Wilson didn’t have many answers for the decline in policies.

“Of course, retention’s always hard to figure out, right?” he said. “Because you have a bunch of stuff going on, you have people chang-

ing lifestyles, not driving as much, some people shopping more, you have competitive moves.”

TRIMMING RATES

Executives attributed at least some of the attrition to the end of Allstate’s “Shelter-in-Place Payback,” which expired last summer after Allstate provided monthly 15 percent rebates to drivers in the early stages of the pandemic. The company then reverted to its old rates in most states while archrival State Farm slashed auto rates by 11 percent nationally on average in response to far lower accident claims as driving behavior changed. Progressive and Geico, too, lowered prices in select states.

State Farm now is increasing rates again in many states, but not to the point where they were before COVID. Allstate early this year finally is trimming auto rates in several states, including a 5 per-

cent average reduction in Illinois, going into effect later this month.

Allstate long has championed the importance of customer retention in driving growth or at least holding its own in market share.

Allstate achieves its industry-leading profit margins by pricing policies above faster-growing rivals, given that its costs remain higher than many peers.

So it was unusual to hear Glenn Shapiro, Allstate’s president of personal property-liability, come close to dismissing the retention issue during the earnings call.

“We’re within a decent range of our long-term retention and we’re focused on it, and of course we want to retain every customer that we worked hard to get in the first place,” he said.

Allstate’s renewal rate generally over the last eight years has been about a full percentage point above 2020. That doesn’t sound like a lot, but on a base of about 20 million policies, 100 basis points means 200,000 more lost policies.

Allstate’s 78.2 percent renewal ratio in the fourth quarter was its worst quarterly attrition in at least eight years.

Wall Street isn’t loving what it’s seeing, either. Allstate’s stock price was down about 2 percent in Feb. 4 trading. That was despite quarterly earnings that topped analyst estimates. Largely due to the windfall from lower claims payouts to reduced driving, Allstate’s net income of $5.46 billion for the year was 17 percent higher than $4.68 billion in 2019.

Wilson and Shapiro portrayed 2020 as a year of transition in which the growth platforms they put in place were either being acquired or reorganized. Allstate closed its $4 billion acquisition of New York-based National General Holdings last month, giving it a top-five position among auto insurers selling through independent agents. And it eliminated the Esurance brand, which sold car insurance online and over the phone, instead moving that business into the Allstate brand and pricing policies sold directly at 7 percent less than what drivers get when they buy from an Allstate agent.

That makes 2021 a put-up-orshut-up year on transformative growth.

2/5/21 4:06 PM

CRAINâ&#x20AC;&#x2122;S CHICAGO BUSINESS â&#x20AC;˘ FEBRUARY 8, 2021 9

Home prices went into overdrive in January

BY DENNIS RODKIN Chicago-area home prices, which were rising by double digits throughout the latter months of 2020, were going up even faster in January.

From October through December, in weekly reports on sale prices published by Midwest Real Estate Data, the median price of homes sold during the week was consistently in the range of 15 percent above the median for the corresponding week in 2019.

Then came January: Three of the four weeks had median home sale prices in the range of 20 percent above the corresponding week last year. January is typically a slow month in Chicagoâ&#x20AC;&#x2122;s real estate market, but January 2020 was strong, which makes the January 2021 increases even more noteworthy.

In the week that began Jan. 4, the median price of homes sold in the Chicago metropolitan area was up more than 18 percent from a year earlier, according to the

MRED weekly reports. In the two subsequent weeks, the increases were 20 and 21 percent. In the last week of January, data released Feb. 1 shows, the increase was just under 14 percent.

The median price of homes sold in the last week of January was $249,000. A figure for the full month is not yet available. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s good old-fashioned supply and demand,â&#x20AC;? says Beth Gomez, a Berkshire Hathaway HomeServices Chicago agent. â&#x20AC;&#x153;People are upsizing because of COVID, but the inventory of homes is very low.

Prices go up.â&#x20AC;?

LOW INVENTORY

At the end of December, the inventory of homes on the market was enough to feed 1.8 months of sales, the lowest inventory in at least 13 years. Four to six monthsâ&#x20AC;&#x2122; inventory is generally considered a balanced real estate market.

Gomez represented a traditional Chicago workers cottage in Ukrainian Village that had been updated. A three-bedroom, it was

on the market for just 15 days in December.

Home sales that closed in January mostly went under contract to their buyers in December, a period when, with the presidential election over and new COVID cases in Illinois declining, people may have been feeling confident about the near-term future and willing to pay more for the homes they wanted.

Interest rates, which have been low for a few years but continue to dip lower, fueled the buying as well.

The slide in interest rates during 2020 increased what buyers can afford more than rising prices decreased it. In other words: People paid less, in real dollars, for homes at their higher end-of-year prices than at their lower beginning-ofthe-year prices. â&#x20AC;&#x153;The continual upside for buyers is that we have these low interest ratesâ&#x20AC;? at a time when affordability would otherwise be galloping away from them, says Matt Farrell, managing broker at Corcoran Urban Real Estate.

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2/5/21 12:02 PM

10 FEBRUARY 8, 2021 • CRAIN’S CHICAGO BUSINESS

EDITORIAL

United is leading by example on climate ments to finance new technologies that could do more to reduce the company’s environmental impact than tree-planting ever could. One is a multimillion-dollar investment in 1PointFive, a company that’s developed technology to capture carbon dioxide from the air and bury it safely, deep underground, a process known as carbon sequestration. United’s investment—an aviation industry first—will help 1PointFive build the first industrial-size plant in

Scott Kirby

UNITED IS PUTTING ITS MONEY WHERE ITS MOUTH IS, MAKING DIRECT INVESTMENTS TO FINANCE NEW TECHNOLOGIES.

NEWSCOM

C

limate change is real, and human activities are contributing to a problem that’s already reached crisis proportions.

Until quite recently, those statements would have been considered hyper-political, the subject of intense partisan debate. The business community, however, seems lately to be arriving where the scientific community has been for some time now—that climate change is an existential threat—and the most bracing example of this new cleareyed recognition of the crisis comes from a leading CEO in an industry whose carbon footprint is among the largest on the planet.

In a Feb. 2 appearance before the Economic Club of Chicago, United Airlines CEO Scott Kirby spoke passionately about the dangers of climate change and made a persuasive case that the aviation industry needs to do more—much more—to reduce its impact on the environment. While acknowledging the limits of electric- and hydrogen-powered battery technology for long-haul airliners, Kirby left the audience with little doubt he takes the challenge seriously, describing other steps the Chicago-based carrier is taking to realize the goal it laid out in December to become 100 percent green by 2050. The near-term moves already taken include initiatives such as replacing aging ground equipment with electric-powered alternatives and eliminating nonrecyclable plastics in its onboard food service.

But the most striking aspect of Kirby’s presentation was his acknowledgment that a traditional corporate path toward greening up operations—carbon offsets— is basically a nonstarter for a company as vast and energy-hungry as United. A car-

bon offset, or credit, is a certificate representing the reduction of 1 metric ton of carbon dioxide emissions. To compensate for their own carbon dioxide pollution, companies buy carbon credits from certified organizations that support community development, protect ecosystems or install efficient technology to reduce or remove emissions from the atmosphere.

Tree-planting is often the carbon offset technique of choice. It’s not a bad idea,

but when you’re talking about pollution on the scale of what an airline puts out, carbon offsets aren’t going to get us where we need to go. As Kirby put it, “The reality is, we produce 4,000 times as many emissions as we did in the preindustrial era. We cannot plant 4,000 times as many trees. There’s not enough space on the planet.”

Instead, United is putting its money where its mouth is, making direct invest-

the nation using this technology. A single facility is expected to capture and permanently sequester 1 million tons of carbon dioxide each year, equivalent to the work of 40 million trees but covering a land area about 3,000 times smaller.

Similarly, United has made a $30 million investment in California-based sustainable fuel producer Fulcrum BioEnergy, whose product claims to generate 80 percent less carbon emissions than conventional jet fuel. Again, this direct investment is the first of its kind in the aviation industry.

Airlines and those of us who fly them have long been in the hot seat for the role jet travel plays in heating up the planet. So it’s refreshing to see Chicago’s hometown airline taking bold steps to get ahead of the problem. And if United can do it, other corporate players can—and should—follow suit.

YOUR VIEW

Housing is a human right. This law supports that.

The Cook County Board of Commissioners unanimously passed the Residential Tenant and Landlord Ordinance on Jan. 28.

H

ousing is a human right.

This is not up for debate. Every human being has the right to a decent, safe and affordable place to lay their head.

But while we’ve made strides over the past decade with the passing of the Human Rights Ordinance and Just Housing Ordinance on the county level, renters in suburban Cook County have all too often been left with an uneven playing field.

Until today.

Today, I am proud to stand with Commissioners Scott Britton and Kevin Morrison, as well as every Cook County commissioner who sponsored or supported the Residential Tenant and Landlord Or-

Does this woman deserve to be locked her rent with a combination dinance. of child support and unem- out of her apartment with her three chilThis piece of legislation afployment checks. She also dren in a blizzard in January? Is it fair that firms the rights of renters in owes $800 in medical bills for she is on the cusp of eviction without besuburban Cook County who a sick child in August and has ing allowed a chance at resolution? lacked critical protections Of course not. That’s why the Residen$46,000 in student loan debt. against lockouts, excessive Unable to supplement her tial Tenant and Landlord Ordinance is move-in and late fees, and exunemployment orbitant interest rates on rentbecause she canal arrears. not find child care, WE HAVE A RESPONSIBILITY TO PROTECT This will mean that more she’s fallen behind residents will be able to stay OUR MOST VULNERABLE RESIDENTS AND in her rent payin their homes at the time they Toni Preckwinkle is president of the ments. Her land- MAKE SURE ALL OF US HAVE ROOM TO MAKE need support the most.

James Baldwin famously Cook County Board lord charged her $100 per month in A LIFE IN THE COUNTY WE CALL HOME. said, “Anyone who has strug- of Commissioners. late fees for four gled with poverty knows how months, and now she is behind on the common sense. Every human being in extremely expensive it is to be poor.”

For a moment, imagine a single mother rent again and owes half the rent in late Cook County deserves the fair, legal proof three in South Holland who pays half fees. She woke up this morning with an cess of renting a home.

It must be said to those who would her monthly income in rent. She’s been eviction noticed pasted to her door and a unemployed for the past six months due voicemail from her landlord threatening claim that landlords are being given the short end of the stick—this is patently to the pandemic and has been paying to change the lock on her door.

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Chicago Business, 150 N. Michigan Ave., Chicago, IL 60601, or email us at letters@chicagobusiness.com. Please include your full name, the city from which you’re writing and a phone number for fact-checking purposes.

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2/5/21 3:13 PM

CRAIN’S CHICAGO BUSINESS • FEBRUARY 8, 2021 11

YOUR VIEW Continued false. This is a fair deal.

For nearly a year, we have met with realtor, landlord and neighborhood owners’ groups and have made dozens of concessions as a result—all with the mutual goal of getting rent current and resolving cases.

The ordinance provides greater clarity and delineates the responsibilities between property owners and renters. This clarity and protection will ultimately help both renters and housing providers. We all benefit when an ordinance provides proper guidance and regulations.

That being said, the ordinance aims to level the playing field—and the direction of the scales of justice clearly point in

one direction. In crafting the ordinance, Commissioners Britton and Morrison engaged with more than 65 organizations and many community members to determine who benefited and who was burdened by the lack of regulation in suburban Cook County.

BURDEN

The answer was crystal clear: The burden rested primarily on the almost 250,000 renters in the suburbs. Look at the renter/landlord court cases from 2000 to 2017. Seventy-one percent of landlords have lawyers, while just 11 percent of tenants did. We also know that the majority of Cook County renters are low-income.

Our responsibility in Cook County is made even more clear when one considers the alarming rise of racially concentrated areas of poverty in the suburbs.

Since 2000, poverty in suburban Cook County has doubled.

We cannot ignore that this rise is clearly tied to race, decades of redlining, hyper-policing and disinvestment in urban communities that have led to people of color leaving urban neighborhoods for suburban opportunities.

Furthermore, according to the Center for American Progress, renters of color are more cost-burdened, and neighborhoods with more renters of color have higher rates of eviction.

Government bears a role in creating this crisis. Now we have a responsibility to repair that harm we helped cause.

That is why I am proud to support this ordinance. The Residential Tenant Landlord Ordinance advances racial equity, fair housing and our fight against poverty in Cook County. We have a responsibility to protect our most vulnerable residents and make sure all of us have room to make a life in the county we call home.

Housing is a human right.

Protecting fair housing is the right thing to do.

Today was a step forward for working families and people of color in Cook County.

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12 FEBRUARY 8, 2021 • CRAIN’S CHICAGO BUSINESS

Calamos Investments eyes Fulton Market office The Naperville-based investment firm, one of the Chicago area’s biggest, is nearing a deal to open its first downtown office in the former meatpacking district cancy rate jump to a record high 18 percent since March as new One of the Chicago area’s big- buildings were completed and gest money managers is poised tenants flooded the market with to open its first downtown office space available for sublease. And in the Fulton Market District and it’s far from clear what future ofnotch a much-needed leasing fice demand will look like after win for a local developer in the months of employees settling into working remotely. process.

Jeff Kelley, senior vice presiNaperville-based Calamos Investments is in advanced talks dent and head of marketing at to lease 20,000 square feet on the Calamos, confirms in a statetop two floors of a recently com- ment that the company has been pleted office building at 215 N. hunting for its first downtown Peoria St., according to sources office but does not address any specific properties. familiar with the discussions.

“In light of our strong success If the deal is completed, Calamos would be the first tenant to in recent years, Calamos Investsign on at the 12-story building, ments views additional office which Chicago-based Parkside space in downtown Chicago Realty began developing before as the next step in our strategic the COVID-19 pandemic on spec- growth strategy, and has been ulation, or without any tenants extensively scouting locations signed. The 90,000-square-foot within the Fulton Market and building, dubbed Fulton East, River North areas,” the statement was completed late last year and says.

Spokesmen for Parkside Realty, has sat empty amid an all but frowhich was launched in 2019 by commerIT’S FAR FROM CLEAR WHAT FUTURE cial real estate veterans Bob Wislow and OFFICE DEMAND WILL LOOK LIKE Camille Julmy, did not AFTER MONTHS OF EMPLOYEES respond to requests comment.

SETTLING INTO WORKING REMOTELY. forFor Calamos, the downtown expanzen office leasing environment as sion would be in line with a trend companies evaluate their future of Chicago-area companies opening downtown offices over workspace needs.

The Calamos lease would also the past decade to gain access to stand as a promising sign for young, urban-dwelling talent in downtown office landlords, who a tight labor market. Some real have nervously watched the va- estate investors, however, won-

COSTAR GROUP

BY DANNY ECKER

215 N. Peoria St. der whether that will continue with the migration of more millennials to the suburbs during the pandemic.

GROWING PORTFOLIO

Calamos, which manages investments for major corporations, pension funds, endowments and other institutional investors, ranked 17th on Crain’s most recent list of the Chicago area’s largest money managers.

The company had $26.1 billion in assets under management in 2019—up 21 percent from the year before—and had 15 portfolio managers and 45 account managers based locally, accord-

ing to the Crain’s list. Kelley says Calamos Investments’ portfolio has grown since then to $33.7 billion in assets under management today.

Founded in 1977 by John Calamos Sr., who is now chairman of the company, Calamos also has offices in New York, San Francisco, Milwaukee and the Miami area, according to its website.

Parkside is one of a handful of developers to build Fulton Market office buildings on spec, a run fueled by premium rents companies have paid to be in the gritty-turned-trendy former meatpacking district. New Yorkbased Tishman Speyer is close

to finishing a 13-story building with 270,000 square feet of offices at 320 N. Sangamon St. that has yet to announce a tenant, while Chicago developer John Murphy recently completed a 96,000-square-foot spec office building at 318 N. Carpenter St. New York-based Thor Equities is also close to completing a 450,000-square-foot office building at 800 W. Fulton Market that will be anchored by dental practice services company Aspen Dental. And Chicago-based Fulton St. Cos. recently broke ground on a 150,000-square-foot spec office building at 1043 W. Fulton Market.

Bronze lion statues highlight Lawry’s steakhouse auction

BY ALLY MAROTTI Lawry’s The Prime Rib shut down its Chicago location late last year, closing its doors after 46 years. And everything in the steakhouse had to go.

The restaurant turned to an online auction, listing about 1,000 items. The auctions, the last of which closed Feb. 2, ultimately drew 374,000 views. According to RestaurantEquipment.Bid, the marketplace that hosted the auction, 500 bidders took part.

Typically, when his company works on liquidations and online auctions, the goal is to save some of the equipment from landfills, says Neal Sherman, president of RestaurantEquipment.Bid. Auctions often draw resellers or other restaurant owners that can use the equipment in their own kitchens.

But with Lawry’s, there was an additional element: nostalgia.

People checked out the auction and bought old pieces of decor as keepsakes. Sherman says he saw

P012_CCB_20210208.indd 12

similar behavior when the company closed a couple of iconic steakhouses in Los Angeles, too.

“They got engaged there, they had their wedding there, their prom date,” he says. “It’s got a sentimental dimension to it.”

The Lawry’s auction included the expected cooking equipment—like ice makers, convection ovens and soap dispensers—that are central to any commercial kitchen. There was also cutlery, cream-color plates, wine glasses and Champagne flutes.

NOSTALGIC CROWD

Then there was the decor, which likely drew in the nostalgic crowd. There were bronze lion statues that stood watch over a dining room, padded chairs with floral patterns, paintings from the walls and a box of holiday ornaments.

The lions went for $1,000 each, says Sherman. He declines to comment on total sales.

The marketplace Sherman runs

COURTESY OF NEAL SHERMAN

The 46-year-old restaurant shuttered the doors of its Chicago location late last year, and everything had to go

Lawry’s The Prime Rib’s Chicago location shut down late last year after 46 years. has changed during the pandemic, he says. The site used to get 1 million views a month. Now it gets that many in a day.

The restaurant landscape is changing, he says. More independent restaurants, which have struggled during the pandemic, are looking for deals. There are also more budding home cooks buying commercial items they can cook with.

Additionally, the pandemic has forced restaurants that have been around for decades, like Lawry’s, to close their doors. Morton’s The Steakhouse also closed its original location on State Street, which opened in 1978, and blamed COVID-19 restrictions.

A representative from Pasadena, Calif.-based Lawry’s Restaurants did not return requests for comment last week. On its website,

the company thanked the Chicago community for “its outpouring of support throughout the final months and days of service” at the restaurant, which was located just off Michigan Avenue.

It also touts its other locations, in Beverly Hills, Las Vegas and Dallas, and its Lawry’s At Home offering, which ships prime rib meals and sides directly to customers.

2/5/21 4:09 PM

CRAIN’S CHICAGO BUSINESS • FEBRUARY 8, 2021 13

COLDWELL BANKER

How the luxury home market shifted in 2020 Above: Tied for No. 24, in Hinsdale, sold for $4.6 million. Below: No. 10, in Winnetka, went for $6.5 million.

In 2019, nine of the 10 highest-priced home sales in the Chicago area were downtown condos.

In 2020, just two condos were in the top 10. That’s a stark measure of how hard 2020’s blows to downtown’s vitality—the pandemic and spasms of social unrest—hit the highest strata of the Chicago real estate market.

“COVID made you want to stay as far away from other people as possible,” says Phil Skowron, an @properties agent, much of whose work is with high-end downtown condos. “If you have to use an elevator or share amenities with other residents, that was to be avoided. So a lot of the kinds of people who’ve been buying those downtown condos for the past 10 or 15 years were gone.”

The big-ticket buyers, Skowron says, “started asking their brokers to find them lake houses in Wisconsin or Michigan, or something in Florida.”

Or perhaps a single-family home away from the downtown neighborhoods, such as in Lincoln Park, where the year’s highest-priced home sale went down.

A 12,000-square-foot mansion on a double lot on Howe Street went for $11.9 million in December.

The price, the most anyone has paid for a house in the city in about 2½ years and more than $500,000 above 2019’s top-priced sale, is one sign that “a ‘bigger is better’ philosophy has come about. Buyers are embracing large homes again,” says Tim Salm, the Jameson Sotheby’s International Realty agent who represented the mansion.

Neither Salm, who represented the sellers, nor Skowron, who represented the buyers, would identify the sellers, whose names have not yet appeared in public records.

Large homes are the stock in trade of the North Shore, where six of the year’s 10 highest-priced sales took place.

“Ultrahigh-net-worth individuals are by nature agile and pivot easily as their needs and interests demand,” Kelly Rynes tells Crain’s by email. Rynes, a Berkshire Hathaway HomeServices Chicago agent, represented the seller in the year’s highest-priced suburban sale, a lakefront estate in Winnetka.

When the pandemic hit in March, Rynes writes, “suddenly, luxury equaled space, control over safety, wellness and peace of mind.

The market trend in the high end is practical demands: multiple offices, gyms, pools.”

The transaction Rynes was involved with may be part of a re-

million for land alone, with many millions more to spend on building a home on the site.

Along with the shift away from downtown condos at the upper end, Crain’s list of the year’s 50 highest-priced home sales in 2020 shows another difference from 2019: While there were 52 sales in 2019 at $4 million or more, in 2020 there were only 46. Thus the bottom rung on this year’s top-50 list is $3.9 million.

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JAMESON SOTHEBY’S INTERNATIONAL REALTY

VHT STUDIOS

The pandemic and periods of social unrest took a toll on high-end downtown condo sales | BY DENNIS RODKIN

“COVID MADE YOU WANT TO STAY AS FAR AWAY FROM OTHER PEOPLE SO A LOT OF THE KINDS OF PEOPLE WHO’VE BEEN BUYING THOSE DOWNTOWN CONDOS FOR THE PAST 10 OR 15 YEARS WERE GONE.” Phil Skowron, @properties agent

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JAMESON SOTHEBY’S INTERNATIONAL REALTY

AS POSSIBLE.

Clockwise from above: No. 18, in Chicago, sold for $5.5 million. No. 14, in Chicago, went for $5.9 million. Tied for No. 20, in Chicago, fetched $5.0 million. cord breaker for the North Shore.

The Chicago Tribune has reported that one so-far-unidentified buyer made three purchases on Winnetka’s lakefront—numbers 2, 6 and 14 on Crain’s list of the year’s 50 highest-priced sales—for a total of about $24 million and will swap some of the land with the local park district to make a contiguous 3.3-acre site.

If this plays out as reported, the buyer will have spent nearly $24

One high-priced transaction that is not included here is the December sale, at $6.05 million, of a 25-acre vacant parcel in Lake Bluff with 400 feet of Lake Michigan shoreline. While it will likely be put to residential use, it wasn’t a home at the time it was sold.

This year’s list is missing more buyers’ names than usual, largely because the relevant public records have been slower to be updated because of COVID.

2/5/21 11:19 AM

@PROPERTIES

ANDREW MILLER

BERKSHIRE HATHAWAY HOMESERVICES CHICAGO

14 FEBRUARY 8, 2021 • CRAIN’S CHICAGO BUSINESS

PREMIER RELOCATION

JAMESON SOTHEBY’S INTERNATIONAL REALTY

GOOGLE MAPS

Clockwise from above: No. 1, in Chicago, sold for $11.9 million. Nos. 2 and 3, in Winnetka, brought $9.5 million and $8.8 million.

Clockwise from right: No. 8, in Chicago, brought $7.2 million.

No. 5, in Winnetka, fetched $8.2 million. No. 4, in Chicago, sold for $8.4 million.

CRAIN’S LIST CHICAGO AREA’S PRICIEST HOME SALES All sales in 2020. Ranked by purchase price.

Purchase price (millions)

Square feet

Price per square foot

Bedrooms/ bathrooms

Purchase date

Buyer(s)

Seller(s)

Neighborhood

NORTH HOWE STREET, CHICAGO 60614

$11.9

12,000

$992

6 BR/7.5 BA

12/23

NA

William and Sandra Sterling

Lincoln Park

SHERIDAN ROAD, WINNETKA 60093

$9.5

4,849

$1,959

5 BR/4.5 BA

10/27

Walton 2019 Revocable Trust

Estate of Stavrula Gotsis

Not applicable

LOCUST ROAD, WINNETKA 60093

$8.8

16,800

$521

5 BR/8 BA

7/16

Chicago Title Land Trust

Sherwin and Deborah Jarol

Not applicable

MICHIGAN AVENUE, CHICAGO 60611

$8.4

6,240

$1,346

5 BR/4.5 BA

5/8

Michael L. and Deborah M. Greenhill trusts

800 N Michigan Unit 5101 LLC

Streeterville

SHERIDAN ROAD, WINNETKA 60093

$8.2

4,323

$1,897

5 BR/4.5 BA

7/27

Orchard 2020 Revocable Trust

Robert and Sharlene Britz

Not applicable

MICHIGAN AVENUE, WILMETTE 60091

$8.0

8,282

$966

6 BR/10 BA

9/9

1126 Michigan Ave LLC

Brad and Mary Whitmore

Not applicable

SHERIDAN ROAD, KENILWORTH 60043

$7.5

6,291

$1,192

5 BR/3.5 BA

8/19

Sairam and Amisha Muthalu

Craig and Elsa Donohue

Not applicable

WALTON STREET, CHICAGO 60610

$7.2

5,230

$1,377

4 BR/4.5 BA

7/13

4036 NW 58th LLC

Jason Heyward

Gold Coast

SEMINARY AVENUE, CHICAGO 60614

$6.7

9,000

$747

5 BR/6 BA

8/14

NA

Chicago Title Land Trust

Lincoln Park

SHERIDAN ROAD, WINNETKA 60093

$6.5

6,390

$1,017

6 BR/5.5 BA

10/13

Chicago Title Land Trust

Susan E. Remien trust

Not applicable

KENMORE AVENUE, CHICAGO 60614

$6.5

8,900

$730

6 BR/5.5 BA

5/24

Office of Penny Pritzker

David Scherer, Rosemarie Lizarraga

Lincoln Park

GRAND AVENUE, CHICAGO 60611

$6.3

4,798

$1,303

3 BR/3.5 BA

3/12

NA

NA

Streeterville

SHERIDAN ROAD, WINNETKA 60093

$6.2

5,410

$1,146

6 BR/5.5 BA

11/9

NA

Claude Ricard

Not applicable

STATE PARKWAY, CHICAGO 60610

$5.9

7,430

$794

6 BR/7 BA

8/31

Jason Heyward

Bloomfield Development

Gold Coast

HOWE STREET, CHICAGO 60614

$5.9

5,358

$1,092

5 BR/4.5 BA

5/11

NA

Ronald and Deborah Clarkson

Lincoln Park

Address

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

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@PROPERTIES

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JAMESON SOTHEBY’S INTERNATIONAL REALTY

COMPASS

JAMESON SOTHEBY’S INTERNATIONAL REALTY

@PROPERTIES

BERKSHIRE HATHAWAY HOMESERVICES CHICAGO

BERKSHIRE HATHAWAY HOMESERVICES CHICAGO

CRAIN’S CHICAGO BUSINESS • FEBRUARY 8, 2021 15

Clockwise from top left: Tied for No. 16, in Winnetka, sold for $5.5 million. No. 20, in Lake Forest, brought $5.0 million. Tied for No. 26, in Chicago, fetched $4.5 million. No. 29, in Chicago, sold for $4.4 million. Tied for No. 26, in Highland Park, went for $4.5 million.

Purchase price (millions)

Square feet

Price per square foot

Bedrooms/ bathrooms

Purchase date

Buyer(s)

Seller(s)

Neighborhood

PRIVATE ROAD, WINNETKA 60093

$5.5

2,602

$2,114

4 BR/6.5 BA

8/26

Bernick Family Property Trust

Mark and Yoanna Kulas

Not applicable

DEMING PLACE, CHICAGO 60614

$5.5

6,884

$799

6 BR/5.5 BA

2/5

Chicago Title Land Trust

Mary B. Miller trust

Lincoln Park

CEDAR STREET, CHICAGO 60611

$5.5

7,000

$779

5 BR/6 BA

2/3

Ketu Amin, Komal M. Patel

James and Janice Jensen trusts

Gold Coast

MICHIGAN AVENUE, CHICAGO 60611

$5.1

6,240

$817

5 BR/4.5 BA

10/1

Matthew Gornet, Valerie Ratts

Michael G. Medzigian trust

Streeterville

MAYFLOWER ROAD, LAKE FOREST 60045

$5.0

24,500

$204

10 BR/13 BA

8/28

Chicago Title Land Trust

CG Mayflower LLC

Not applicable

GOETHE STREET, CHICAGO 60610

$5.0

5,800

$862

4 BR/5.5 BA

10/15

Mark and Robin Tebbe

R. Montgomery Falb

Gold Coast

WALTON STREET, CHICAGO 60611

$4.8

4,000

$1,200

3 BR/3.5 BA

1/24

Arrow 5 LLC

Lisa Rees

Near North Side

LILL AVENUE, CHICAGO 60614

$4.7

6,757

$698

6 BR/5.5 BA

7/8

Forest Union LLC

Environs Development

Lincoln Park

BELDEN AVENUE, CHICAGO 60614

$4.6

6,290

$723

6 BR/5.5 BA

10/26

Stephen Brown

Stewart M. Mather trust

Lincoln Park

EIGHTH STREET, HINSDALE 60521

$4.6

14,727

$309

8 BR/9 BA

8/31

Incobrasa Industries Ltd.

Frederick A. and Karen L. Henderson

Not applicable

RIPARIAN ROAD, HIGHLAND PARK 60035

$4.5

13,000

$346

5 BR/8.5 BA

9/15

Kymberly A. Foglia trust

Michael L. and Debra M. Greenhill

Not applicable

SHERIDAN ROAD, KENILWORTH 60043

$4.5

5,155

$873

5 BR/5.5 BA

8/19

Mary E. Glerum trust

Yoanna Kulas

Not applicable

DEMING PLACE, CHICAGO 60614

$4.5

10,150

$443

6 BR/7.5 BA

5/20

Chicago Title Land Trust

Missy D. Lavender trust

Lincoln Park

ELM STREET, CHICAGO 60611

$4.4

5,100

$863

5 BR/6 BA

9/25

NA

MOD Construction

Gold Coast

MENOMONEE STREET, CHICAGO 60614

$4.3

6,739

$644

5 BR/6 BA

8/24

Evan Jahn

Benjamin Weprin

Old Town

Address

16 16 18 19 20 20 22 23 24 24 26 26 26 29 30

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COLDWELL BANKER

BERKSHIRE HATHAWAY HOMESERVICES CHICAGO

@PROPERTIES

16 FEBRUARY 8, 2021 • CRAIN’S CHICAGO BUSINESS

Clockwise from top left: Tied for No. 34, in Lake Bluff, sold for $4.2 million. No. 39, in Winnetka, went for $4.2 million. Tied for No. 49, in Lake Forest, fetched $3.9 million. No. 48, in Hinsdale, sold for $4.0 million. No. 47, in Lake Forest, brought $4.0 million.

CRAIN’S LIST CHICAGO AREA’S PRICIEST HOME SALES OF 2020 All sales in 2020. Ranked by purchase price.

Purchase price (millions)

Square feet

Price per square foot

Bedrooms/ bathrooms

Purchase date

ALTGELD STREET, CHICAGO 60614

$4.4

6,538

$665

5 BR/5 BA

DAYTON STREET, CHICAGO 60614

$4.3

9,182

$466

MICHIGAN AVENUE, CHICAGO 60611

$4.3

3,228

BURLING STREET, CHICAGO 60614

$4.2

GRAND AVENUE, CHICAGO 60611

Address

31 32 33 34 34 34 34 38 39 40 40 42 43 43 45 45 47 48 49 49

Buyer(s)

Seller(s)

Neighborhood

5/11

B, K & D LLC

Thomas Ross and Mary T. Bergonia

Lincoln Park

7 BR/7.5 BA

5/14

Chicago Title Land Trust

Stephen B. Bonner trust

Lincoln Park

$1,317

3 BR/3.5 BA

3/30

Timothy W. Turner

Andrew Carvill

Streeterville

7,000

$600

6 BR/6.5 BA

11/2

NA

NA

Lincoln Park

$4.2

3,765

$1,116

3 BR/3.5 BA

9/22

NA

NA

Streeterville

SUPERIOR STREET, CHICAGO 60654

$4.2

4,700

$894

4 BR/3.5 BA

8/21

Mallers family trust

Michael D. Neller

River North

ARBOR DRIVE, LAKE BLUFF 60044

$4.2

29,745

$141

7 BR/11 BA

3/9

Patrick J. and Edith Ahern

Richard Marx and Cynthia Rhodes

Not applicable

HOWE STREET, CHICAGO 60614

$4.2

8,500

$491

7 BR/6 BA

5/19

Stephen A. and Jennifer L. Sullivan

Donald J. and Edna L. Weiss

Lincoln Park

HIGGINSON LANE, WINNETKA 60093

$4.2

11,000

$377

6 BR/8 BA

2/26

Liliana G. Roche trust

Kerry and Sarah Wood

Not applicable

GREENLEAF AVENUE, GLENCOE 60022

$4.1

14,000

$293

7 BR/8 BA

9/30

Roger N. Chams trust

Paul J. and Ellen C. McDonough

Not applicable

EUGENIE STREET, CHICAGO 60614

$4.1

3,000

$1,367

6 BR/6.5 BA

2/24

Chicago Title Land Trust

Matt Smith

Old Town

SHERIDAN ROAD, WILMETTE 60091

$4.1

4,056

$1,006

4 BR/3 BA

1/13

Adam and Susan Lee Sabow

Peter V. and Robin S. Baugher

Not applicable

CLARK STREET, CHICAGO 60610

$4.1

3,852

$1,051

4 BR/4.5 BA

10/21

Kenneth M. Tallering

1550 North Clark (Chicago) Owner LLC

Gold Coast

DUNDEE LANE, BARRINGTON HILLS 60010

$4.1

13,000

$312

6 BR/8.5 BA

3/18

Aqeel A. and Mariam R. Sandhu trusts

Robert and Elizabeth Schmidt

Not applicable

BURLING STREET, CHICAGO 60614

$4.0

7,000

$571

6 BR/5.5 BA

10/15

Elizabeth Hirschtritt

Dmitry and Elona Balyasny

Lincoln Park

WESTMINSTER ROAD, LAKE FOREST 60045

$4.0

10,863

$368

7 BR/8.5 BA

10/16

Michael H. and Lynda L. Mooney trusts

Robert and Susan Morrison

Not applicable

ELM TREE ROAD, LAKE FOREST 60045

$4.0

7,845

$507

5 BR/7 BA

8/10

Chicago Title Land Trust

James and Haity McNerney

Not applicable

OAK STREET, HINSDALE 60521

$4.0

14,490

$273

5 BR/8 BA

5/12

Chicago Title Land Trust

Roger Weston

Not applicable

WOODLAND ROAD, LAKE FOREST 60045

$3.9

7,800

$500

6 BR/8 BA

12/3

612 E. Woodland Road Residence Trust 1 and 2

Gregory D. and Melissa K. Glyman

Not applicable

GOETHE STREET, CHICAGO 60610

$3.9

3,543

$1,101

2 BR/2.5 BA

2/26

Deborah Bricker trust

Chicago Title Land Trust

Gold Coast

Ranked by purchase price. Includes homes sold in Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry, and Will counties and reported in real estate listings or public records by Jan. 29, 2020. Purchase price is rounded to the nearest thousand; only those homes that share a ranking number have identical full prices. NA: Not available.

Researched by Dennis Rodkin and Chuck Soder

WANT MORE PRICEY HOMES? BECOME A DATA MEMBER AND GET LISTS FROM THIS YEAR AND LAST YEAR, PLUS MORE CRAIN’S DATA: CHICAGOBUSINESS.COM/DATA-LISTS

P013-P016_CCB_20210208.indd 16

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CRAIN’S CHICAGO BUSINESS • FEBRUARY 8, 2021 17

CRATE & BARREL CEOS The Northbrook-based retailer has struggled to find a long-term leader since its founder sold a majority stake in the company in 1988.

1962

’70

Gordon Segal 1962-2008

’80

Doug Diemoz

Barbara Turf 2008-2012

’90

2000

’08

2015-2017

’12

’14 ’15

’17

Janet Hayes

2020 to present

’20

Sascha Bopp 2012-2014

Note: Adrian Mitchell was interim CEO between Sascha Bopp and Doug Diemoz.

Neela Montgomery 2017-2020

Crate & Barrel has another new CEO—its fifth in nine years. Will this one last?

CRATE from Page 1 merchandising will be a north star.

“She’s been in the industry for a long time. She had great experience, and she knows vendors and relationships,” he says. “She knows how our type of business works, where prior (CEOs) didn’t have (the) many years of experience it takes to get good at this business.”

Hayes worked in senior roles at Williams Sonoma for 12 years, the last half as president of the Williams Sonoma brand. Company filings show the brand’s revenue grew each year Hayes was in charge. She was also president of the company’s Pottery Barn Kids and Pottery Barn Teen brands.

Previously, Hayes worked in managerial roles at Nike and Gap, and got her start in retail when she turned 16. Since then, “I have never come off the retail floor, one way or another,” she told the Nob Hill Gazette, a regional magazine based in San Francisco, in 2018.

Crate & Barrel declines to make Hayes available for an interview or confirm her age. Hayes and her family relocated to the Chicago area last summer, the company says. Germany-based Otto Group has owned the

company since 1998. It does not release revenue figures, but there have been glimpses of Hayes’ moves so far.

The company doubled down on curbside pickup and online channels, according to news releases and reports. It recently rolled out a platform that notifies customers when their curbside order is ready. Last fall, it released its Crate & Kids catalogue on Pinterest, foregoing the print version, a move that could help customer retention.

“Once you have a social media handle, it’s easier for them to follow the consumer back . . . and give them incentives to come back,” says Sajna Razi, a clinical assistant professor of marketing at the University of Illinois at Chicago.

Hayes also faces the ongoing task of maximizing the company’s brickand-mortar footprint as sales push further online.

At Williams Sonoma, Hayes was a proponent of making sure stores gave shoppers something the internet could not. The stores hosted regular cooking classes and events, including one in 2015 at which Hayes cooked with Kris Jenner.

Observers expect Hayes to bring more merchandising partnerships

into Crate & Barrel—like its 2019 acquisition of home decor company Hudson Grace—which could give it more exclusivity.

She is also hands on. Hayes told Nob Hill that she liked to study people while they shop, to see how they interacted with products, and to do her own quality assurance. “I try to taste everything that goes through here that’s going to hit our shelves in the stores,” she told Nob Hill.

A VARIED MENU

Crate opened a restaurant in 2019 within its Oakbrook store. It uses online channels to push people into stores, offering consultations to discuss floor plans and decor.

“Our business remains very strong, and we’ve seen record demand for our products across categories as people spend more time at home and improve their home offices, kitchens, outdoor spaces and more,” Crate spokeswoman Vicki Lang says in an email. “Janet’s leadership and deep background in home and design have set us up for continued success as we innovate in ways that will excite our new and existing customers.”

Homebound customers with disposable income drove sales at home

furnishing stores last year. After dropping off to less than $2 billion in April, sales rebounded to almost $4.8 billion in September, according to data from the U.S. Census Bureau.

Crate & Barrel’s competitors cashed in. Williams Sonoma reported net earnings of almost $372 million for the 39 weeks that ended Nov. 1, a roughly 96 percent increase year over year. Wayfair’s net revenue was up to almost $10.5 million during the first nine months of 2020, from about $6.6 million in 2019.

The focus on the home is expected to continue, according to data consulting firm Accenture. Fifty-seven percent of consumers plan to do most of their socializing from home in the next six months, and many are continuing to move to bigger suburban homes that need decorating.

Still, it is unlikely the staggering sales growth some companies saw last year will be sustained, says Jaime Katz, a senior equity analyst at Morningstar who covers Williams Sonoma and Wayfair.

The trick now for Hayes will be finding ways to continue driving sales, Katz says. To do that, Crate & Barrel must work to generate more money per sale and create lifetime customers.

So, instead of getting a customer to buy a set of a bar stools, convince them to also buy a matching table. Or better yet, update the whole kitchen.

“That’s a more fruitful transaction for a company like Crate & Barrel than like, ‘Hey, we’re having 30 percent off bar stools this weekend,’ ” she says. A one-off purchase like that “is not meaningful enough to change how people think about utilizing the brand.”

Crate is headed in that direction.

Its mobile app offers an augmented reality component that lets users see what a piece of furniture might look like in their home.

Crate & Barrel says 60 percent of its website traffic comes from mobile.

The data gleaned from those transactions can be used for product development, merchandising strategy and more, says Laura Gurski, senior managing director of consumer goods at Accenture. Hayes must ensure the company is using its data wisely.

“That will be the difference in their revenue and profitability,” she says. “Those that understand the consumer are going to be in a better place.”

GameStop-fueled lawsuits could force Citadel to pry open its black box CITADEL from Page 1 communicating and cooperating over Reddit. Other defendants in the cases include Robinhood, the no-fee trading app many used to bid up shares of GameStop and other heavily shorted stocks with the goal of squeezing hedge funds heavily invested in seeing the stock prices fall.

The risk to Citadel and Griffin is less that they ultimately will be found liable for damages, and more, that they might have to divulge details of their business operations if a judge rules against their inevitable motions to dismiss, legal observers say. That would mean discovery and handing over documents and sitting for depositions by hostile plaintiffs’ attorneys.

Griffin then would have to decide whether to settle to avoid exposing secrets of a company and industry that fiercely guard their intellectual property and how large of a check he’d be willing to write. Billionaires make inviting targets for class-action lawyers.

The lawsuits typically allege that

P017_CCB_20210208.indd 17

Robinhood’s sporadic halt of trading in GameStop and other previously low-profile stocks that suddenly became highly volatile allowed those being squeezed to trade out of their positions while many Redditors were sidelined.

One example: A Feb. 1 class-action lawsuit filed in San Francisco by high-profile antitrust class-action attorney Joseph Saveri accused Citadel’s hedge fund of conspiring with Citadel Securities, something that the spokeswomen for the two companies adamantly denied in late January.

“Defendant Citadel (Securities) also pays defendant Robinhood for order flow,” the complaint said.

“Payment for order flow is a kickback that a brokerage firm receives for directing orders to third party-market makers, like Citadel (Securities), for trade execution. . . .(D)efendant Citadel had ‘reloaded’ their short positions before instructing defendant Robinhood to prohibit the purchases of GameStop and other stocks.”

In addition to Citadel and Robinhood, that suit names a who’s who of trading firms as defendants, includ-

ing Charles Schwab, E-Trade and TD Ameritrade.

Citadel and Robinhood have said the trading suspensions were due to lack of liquidity at Robinhood to meet the demands of clearinghouses and that Citadel Securities, which is Robinhood’s largest buyer of trades, had no say in or advance knowledge of those decisions.

NATIONAL STORY

While Citadel and Griffin have been entangled in business litigation before, the disputes have tended to be the sort that interest only those in the investment industry. The plight of the Reddit investors is a national story, featuring a narrative in which the public can take sides.

“Judges are impossible to predict,” says Anthony Casey, deputy dean and faculty director at the University of Chicago Law School’s Center on Law & Finance. “That has to be a concern.”

Spokeswomen for Citadel and Citadel Securities decline to comment on any of the lawsuits.

In late January, as the GameStop controversy was raging, the company said, “Citadel Securities has not

instructed or otherwise caused any brokerage firm to stop, suspend, or limit trading or otherwise refuse to do business. Citadel Securities remains focused on continuously providing liquidity to our clients across all market conditions.”

A spokeswoman for Citadel’s hedge-fund business said at the time, “Citadel is not involved in, or responsible for, any retail brokers’ decision to stop trading in any way.”

The other unpredictable arena in which Citadel finds itself a focus is political. The spectacle of ordinary investors getting hurt due as much to hiccups in the trading system as the wisdom, or lack thereof, in their decisions has members of Congress and even Treasury Secretary Janet Yellen looking for answers.

“We really need to make sure our financial markets are functioning properly, efficiently and that investors are protected,” Yellen said Feb. 4 on ABC’s “Good Morning America.”

She convened a meeting that day of leaders from the Federal Reserve, the Commodity Futures Trading Commission and the Securities & Exchange Commission to discuss

“whether or not the recent events warrant further action.”

Specific proposals for regulatory fixes have been few and far between so far. Concerted regulatory action, though, could well require more disclosure from Citadel Securities than is the case now. “The risk for them is we open up some broad regulatory fact-finding investigation,” UChicago’s Casey says.

Likewise, Congress: “They certainly can say, ‘We want to know everything about your conflicts or we’re going to make new rules,’ ” he says.

“I’m trying to get everybody that has a role to play,” Rep. Maxine Waters, D-Calif., said Feb. 3. She chairs the House Financial Services Committee and plans at least one hearing.

“I want Reddit there. I want Robinhood there. I even want GameStop there. And I want a couple of the hedge funds there.”

Among the firms she said she wanted to question was Citadel.

Sen. Sherrod Brown, D-Ohio, incoming chair of the Senate Banking Committee, also plans at least one hearing.

2/5/21 4:40 PM

ACCOUNTING / CONSULTING

ARCHITECTURE / DESIGN

BANKING

ENGINEERING / CONSTRUCTION

INFO TECHNOLOGY

Porte Brown LLC, Elk Grove Village

Solomon Cordwell Buenz (SCB), Chicago

Lakeside Bank, Chicago

Burns & McDonnell, Chicago

Bill Ryan joins Lakeside Bank as Managing Director, Commercial & Industrial (C&I) Lending.

Bill will lead the charge at Lakeside to accelerate the growth of middle market lending. For 30 years, Bill’s held senior roles at major Chicago banks, helping clients across industries succeed. He has degrees in Finance from U of I & an MBA from Kellogg’s.

From a large family, he KNOWS how to listen & move fast, like Lakeside. If you’re with a middle market company, “It’s about time” to meet Bill Ryan.

Bryan Knowles joins Burns & McDonnell in Chicago to provide technical leadership on power distribution modernization projects nationwide. In his 15 years of experience, Bryan has spearheaded large, complex projects for utility clients across the region — serving as an engineering director and technology leader for a major design firm. As the nation’s distribution system grows more complex, Bryan provides years of robust experience and insight to make the firm’s clients successful.

Alden Management Services, Chicago

Porte Brown is pleased to announce Megan Angle, CPA, has been admitted as Partner.

Megan is part of Porte Brown’s not-for-profit and audit & review services teams in the Elk Grove Village office. She has more than twelve years of experience providing tax consulting, accounting, and audit services for individuals, nonprofit organizations, and closely held businesses. She co-leads Porte Brown’s Not-for-Profit team and is also an integral leader of Porte Brown’s Audit Services team.

ACCOUNTING / CONSULTING Porte Brown LLC, Elgin Porte Brown is pleased to announce Mark Gallegos, CPA, MST, has been admitted as Partner. Mark is a member of Porte Brown’s tax services team in the Elgin office. Gallegos has dedicated his career as a Certified Public Accountant in taxation. He has more than 20 years of experience providing sound tax advice to his clients. Gallegos also has extensive experience in business and individual taxation, credits and incentives, and international tax and consulting.

ACCOUNTING / CONSULTING Porte Brown LLC, Elgin Porte Brown is pleased to announce Gabe Grzeskiewicz, CPA, CITP, has been admitted as Partner. Gabe is part of Porte Brown’s accounting and consulting services team in the Elgin office.

He has more than fourteen years of experience providing tax consulting and accounting services for individuals and closely held businesses across several industries.

Grzeskiewicz is also the leader of Porte Brown’s information technology and cybersecurity services teams.

SCB is pleased to announce James Jeffs, AIA, LEED AP and Katie Perez, NCIDQ, LEED AP BD+C have been promoted to Associate Principals. James joined Jeffs SCB in 2016 and has worked on several of the firm’s office projects in Chicago and throughout the Midwest.

He is currently part of StudioORD working on the new O’Hare Global Terminal.

Perez Katie joined SCB in 2013 and is a project manager in the firm’s Interior Design studio. Her diverse portfolio of work includes workplace, mixed-use, and multifamily residential projects, including the recent repositioning of One South Wacker. James and Katie’s leadership, dedication to design excellence, and collaborative spirit is integral to SCB’s continued growth and success as a leading design firm.

ARCHITECTURE / DESIGN Solomon Cordwell Buenz (SCB), Chicago SCB has welcomed two new Associate Principals to the firm’s Chicago office. James Michaels, AIA is a senior designer with 25+ years of Michaels experience designing large-scale, highprofile urban projects worldwide, most recently at Wight and Co. and Skidmore Owings & Merrill. He joins SCB’s architecture practice focusing on multifamily and mixed-use projects Schabel across the country.

Alex Schabel, AIA joins the firm as a project manager from Booth Hansen, bringing 20+ years of experience across a variety of sectors including multifamily, adaptive reuse, and education. She is currently engaged with new residential and mixed-use projects in Philadelphia and Atlanta.

INSURANCE

CONSTRUCTION SERVICES Power Construction Company, Chicago Power Construction is pleased to announce Jeff Geier’s promotion to President. An Iowa State University graduate, Jeff began at Power in 2000. Passionate about Geier supporting education initiatives, he serves on Cristo Rey’s Foundation Board. Terry Graber will remain as CEO. Bob Gallo has been promoted to Chief Operating Officer.

A Bradley University graduate, Bob began at Gallo Power in 1987, helping Power grow from 70 people to a 400-person firm. He serves on the Lurie Children’s Hospital Foundation Board and works with several community organizations including Revolution Workshop - supporting residents of Chicago’s west and south side develop skills and find employment.

ENGINEERING / CONSTRUCTION V3 Companies, Ltd., Woodridge V3 Companies named Louis Gallucci, P.E., as the second President/ CEO in the company’s 38-year history. Lou joined V3 in 2003 from Alfred Benesch and led the growth in V3’s public sector business, helping the firm become a recognized leader in Illinois transportation consulting. Most recently he was Executive VP of Business Development and led teams serving the Transportation and Power & Energy markets. Lou serves on V3’s Board of Directors and its Executive Committee.

HEALTH CARE ATI Physical Therapy, Bolingbrook

CONSULTING Conlon Public Strategies, Chicago Conlon Public Strategies, a Chicago-based consulting and public affairs firm, welcomes Dr. Joanne Howard as a Senior Advisor. With an extensive background in higher education and organizational leadership, Dr. Howard offers the firm’s clients expertise in nonprofit management, program evaluation, and strategic planning. In addition to her work with the firm, Dr. Howard is a clinical assistant professor of public administration at the Illinois Institute of Technology Stuart School of Business.

ATI Physical Therapy, one of the nation’s largest providers of physical therapy services, is pleased to welcome Ryan Wilson as Chief Commercial Officer Wilson and John Sanford as Vice President of Design, Construction and Facilities. Wilson will be responsible for enterprise-wide sales and marketing efforts, including customer acquisition and retention strategies.

Sanford Sanford will be tasked with the oversight and management of ATI’s clinic design and construction process as well as fleet maintenance programs. The two bring decades of expertise and strategic insight to ATI as the brand grows its footprint in 2021 and beyond.

CONSTRUCTION ACCOUNTING / CONSULTING Porte Brown LLC, Elk Grove Village

BMWC Constructors, Inc., Chicago / Indianapolis

Porte Brown is pleased to announce John Lancaster, CPA, CCIFP, has been admitted as Partner. John is part of Porte Brown’s audit & review and accounting services teams in the Elk Grove office. He has more than ten years of experience providing tax consulting, accounting, and audit services for individuals and closely held businesses. He is also one of the leaders of Porte Brown’s construction team. In addition, Lancaster works with numerous manufacturing businesses in the Chicagoland area.

The BMWC Constructors Board of Directors unanimously elected Chris Buckman as Chief Executive Officer.

Chris accepted this position, in addition to his previously held role as President of BMWC, and will now be holding both titles. In his new role as Chief Executive Officer, Chris replaces Brian Acton who will remain with the company in a reduced role as Executive Chairman. Chris has professionally served our employees, clients and industry for 24 years and is perfectly suited for this position.

EDUCATION The University of Chicago’s Polsky Center for Entrepreneurship and Innovation, Chicago Christine Karslake, PhD, MBA, is the Managing Director of Polsky Science Ventures for the Polsky Center for Entrepreneurship and Innovation at the University of Chicago. In this role, she leads the formation and launch of new science and technology companies across all fields of research at the University of Chicago.

Christine brings more than 10 years of venture capital experience and has helped deliver more than $12 billion in incremental value for a variety of life science businesses.

Alden Management Services announces the promotion of Richard Hoffman to Chief Information Officer. Hoffman has implemented and simplified various technological practices that resulted in the company’s expansion. With over 25 years of experience holding various Vice President and Senior Vice President positions within the information technology industry, Hoffman will continue to oversee the technological advancement of more than 50 health care facilities across the Illinois and Wisconsin region.

HUMAN RESOURCES Alight Solutions, Lincolnshire Cathinka Wahlstrom has been named president and chief commercial officer of Alight, a leading cloud-based provider of integrated digital human capital and business solutions. Cathinka will be responsible for accelerating Alight’s growth strategy, leading all aspects of its commercial organization, including North America sales, strategic accounts, channels and partnerships and marketing. Cathinka joins Alight from Accenture where she served in various leadership roles for more than 26 years.

Health Care Service Corporation, Chicago Dr. Opella Ernest is promoted to Executive Vice President and Chief Operating Officer. Opella will retain and continue to lead Information Technology, Customer Ernest Service, Health Care Management and Data Analytics. She is a boardcertified family physician and holds a bachelor’s degree from the University of Michigan and a degree in medicine from The Ohio State University College of Medicine.

Tikkanen Jeff Tikkanen is promoted to Executive Vice President, Commercial Markets. Jeff will retain and continue to lead commercial markets, product design and development, pharmacy solutions and market operations, including broker and consultant operations and relationships. Jeff has been with HCSC since 1993 and served in a variety of management roles.

INSURANCE Health Care Service Corporation, Chicago Arun Prasad will join the company as Senior Vice President and Chief Strategy Officer where he will lead the organization’s strategic efforts including long-term planning, business and corporate development and strategic investments. Arun’s responsibilities also include oversight of HCSC’s subsidiary businesses. He brings nearly two decades of strategic health care experience to HCSC. Arun holds a B.S. in finance and economics from Boston College.

INSURANCE Health Care Service Corporation, Chicago Jim Walsh will assume the role of Senior Vice President and Chief Financial Officer. Jim currently leads the Financial Services division and has held Walsh positions of increasing responsibility within HCSC’s finance divisions for more than 13 years.

Nathan Linsley will assume the role of Senior Vice President, Government Programs, where he will lead the company’s government Linsley business. Nathan previously was a Divisional Senior Vice President of Treasury and Corporate Strategy, responsible for the development and articulation of the company’s corporate strategy as well as all capital planning and allocation activities.

PEOPLE ON THE MOVE

Advertising Section

To place your listing, visit www.chicagobusiness.com/peoplemoves or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

LAW

LAW

LAW

LAW

REAL ESTATE

Freeborn & Peters LLP, Chicago

Keller Lenkner LLC, Chicago

Much Shelist, Chicago

Saul Ewing Arnstein & Lehr, Chicago

NAI Hiffman, Oakbrook Terrace

Freeborn & Peters LLP is pleased to announce that Kimberly A. Beis has been named CoLeader of the Intellectual Property Practice Group.

Kim has experience with all aspects of civil litigation, including pre-suit investigations, discovery, motion practice, trial preparation and examining witnesses at trial in both state and federal court, particularly as it relates to pharmaceutical patent litigation. In addition, Kim is Co-Leader of the Firm’s Women’s Leadership Council.

Keller Lenkner LLC, a national plaintiffs’ law firm, has added Jason Zweig as a Partner in its Chicago office. Zweig is a seasoned class-action lawyer with experience representing plaintiffs in antitrust, consumer, and product-liability matters. Zweig joins Keller Lenkner from Hagens Berman Sobol Shapiro LLP, where he was Managing Partner of its Chicago office and had previously opened the firm’s New York office.

Juli Dreifuss was elevated from associate to special counsel in the Wealth Transfer & Succession Planning group at Much. Juli focuses her practice on tax planning and the integration of estate plans and corporate structures, with an eye toward transferring wealth and business interests in a tax-efficient manner. She advises clients on developing strategies using gift, estate and generation-skipping transfer tax planning.

Marc Adesso joined Saul Ewing Arnstein & Lehr’s Chicago office as a partner in the firm’s Cannabis and Corporate Practices, including its Securities, Mergers and Acquisitions and REIT sub-groups. He has extensive experience advising clients in IPOs, alternative public offerings, primary and secondary registered offerings and complex corporate transactions.

Marc’s experience includes advising clients in the real estate/REIT, cannabis, health care, manufacturing and financial service industries.

LAW

LAW

King & Spalding LLP, Chicago

Much Shelist, Chicago

Jake Downing has joined the Chicago office of King & Spalding as a partner in the Corporate, Finance and Investments practice group, and as part of the firm’s recently-launched Global Human Capital and Compliance practice. Downing specializes in global executive compensation and employee benefits issues, including executive compensation programs, retirement programs, health and welfare programs, fringe benefit programs and their related governance considerations.

Matthew Feery was elevated from associate to income principal in the Labor & Employment group at Much. Matt advises clients on matters involving hiring and termination, restrictive covenants, wage and hour requirements, discrimination and harassment, medical leaves and related issues. Matt helps employers of all sizes support their business goals by developing best practices, strategies and solutions in compliance with federal, state and local labor and employment laws.

NAI Hiffman, the region’s largest independent commercial real estate brokerage and management company, is pleased to announce the shareholder promotions of commercial Higa real estate veterans Perry Higa and John Basile. Throughout his 30+ year career, Perry’s diligence and knack for assembling mutuallybeneficial transactions have earned him a loyal client base of tenants, landlords, buyers, and Basile sellers. He joined Hiffman in 2015 following his time with CBRE’s Corporate Services Group.

John’s successful 15-year career is marked by partnerships with local and multi-market clients. He leverages his expertise in supply chain efficiencies, the freezer/cooler food industry, and the execution of real estate strategies.

John joined Hiffman in 2019.

LAW NON-PROFIT

Freeborn & Peters LLP, Chicago Freeborn & Peters LLP is pleased to announce that Katheleen A. Ehrhart has been named Co-Leader of the Insurance Brokerage Group. Kathy has extensive experience working with executives, senior management and in-house counsel of corporations in managing litigation as well as advising on litigation risks and strategy. She also was recently involved in the first virtual bench trial in Cook County.

LAW Freeborn & Peters LLP, Chicago Freeborn & Peters LLP is pleased to announce that Michael J. Kelly has been named Co-Leader of the firm’s Litigation Practice Group. For more than 25 years, Michael has worked with clients on complex litigation cases involving antitrust, contract, insurance, intellectual property and trade secrets, often involving novel issues. Michael is also an experienced counselor, litigating and providing in-depth strategic advice on class action litigation.

LAW Freeborn & Peters LLP, Chicago Freeborn & Peters LLP is pleased to announce that Steven D. Pearson has been named CoLeader of the Insurance Brokerage Group. Steve’s practice emphasizes the areas of non-compete litigation, professional liability, insurance coverage, bad faith, reinsurance, and complex commercial litigation. Steve also regularly litigates large-scale attorney fee disputes and has testified as an expert witness in such matters.

LAW Freeborn & Peters LLP, Chicago Freeborn & Peters LLP is pleased to announce that Terrence Sheahan has been named CoLeader of the Litigation Practice Group. TJ has tried to verdict more than 150 civil and criminal bench trials and 17 civil and criminal jury trials (in addition to trying multiple other bench and jury trials that have settled or otherwise ended during trial). In addition to his courtroom experience, he routinely represents business clients in arbitrations and mediations.

LAW Levin Ginsburg, Chicago Levin Ginsburg is pleased to announce that Joseph A. LaPlaca has joined the firm as an Associate Attorney.

Joe is a graduate of the UIC John Marshall Law School and obtained his B.A. in History from Denison University. Joe will focus his practice in all areas of commercial law. While a law clerk with Levin Ginsburg, Joe worked on a broad range of commercial matters including both commercial litigation and transactions.

As they enter the 2021 New Year, Mammas · Goldberg · Vanderporten, one of the oldest domestic relations law firms in Chicago, will celebrate its 40th anniversary by welcoming Caidi Mammas Vanderporten, Esq. as a new partner, extending its legacy. The boutique firm, founded by Vanderporten’s father, Evan James Mammas, and the late Jerry S. Goldberg, unveiled its new name and logo in December 2020. Vanderporten joined Mammas | Goldberg in 2018 after six years as a prosecutor with the Cook County State’s Attorney.

Anthony Simpkins is the organization’s new President and CEO. He has held multiple roles serving the City of Chicago, most recently as Managing Deputy Commissioner of the Department of Housing. Simpkins earned his law degree from Loyola University and began his career as a Skadden Foundation fellow at the Legal Assistance Foundation and Lawyers’ Committee for Better Housing. He has also worked for the Leadership Council for Metropolitan Open Communities founded by Rev. Martin Luther King Jr.

LAW Much Shelist, Chicago Luke Harriman was elevated from associate to income principal in the Wealth Transfer & Succession Planning group at Much. Luke advises individuals and families on estate planning matters, helping clients protect and provide for their loved ones. His practice is comprehensive, ranging from counseling young parents as they plan for the care of their children to formulating sophisticated estate tax and income tax strategies for high-net-worth individuals.

LAW Mammas · Goldberg · Vanderporten, Chicago

Neighborhood Housing Services, Chicago

PROFESSIONAL SERVICES Aon, Chicago Aon welcomes back Jeremy Myeroff as a Vice President in Chicago’s Commercial Risk & Health Solutions office. Jeremy was most recently with Aon from 2014-16. In his new role, Jeremy is responsible for driving client value, solutions and business development across risk and health. Most recently, Jeremy comes from Mercer, where he served as a consultant focused on business development. Jeremy is a Miami of Ohio graduate, where he majored in business organizations & management.

LAW Much Shelist, Chicago Peter Shepard was elevated from associate to income principal in the Business & Finance group at Much. Peter focuses his practice on mergers and acquisitions. He provides outside general counsel services for private and public companies, entrepreneurs and private equity firms. Peter regularly represents clients looking to expand their businesses through acquisitions. He provides strategic advice, guiding his clients through business combinations, capital raises and exit opportunities.

To order frames or plaques of profiles contact Lauren Melesio at lmelesio@crain.com or 212-210-0707

TRANSPORT / LOGISTICS Echo Global Logistics, Chicago Echo Global Logistics, Inc., a leading provider of technology-enabled transportation management services, has announced that Brian Parchem has been named Chief Information Officer. Prior to working at Echo, Mr. Parchem served as Executive Vice President of Global Engineering and Operations for TransUnion and was responsible for managing IT strategy and overseeing development teams across the globe. Mr. Parchem holds a bachelor’s degree from Northern Illinois University.

WEALTH MANAGEMENT Altair Advisers LLC, Chicago Altair Advisers, an independent wealth advisory firm, is proud to announce that Rachael Halstuk Mangoubi and David Lin have been promoted to Managing Halstuk Director. Rachael’s professional background, Mangoubi along with her depth of technical skills and her ability to mentor others make her a tremendous asset to Altair.

David has played an instrumental role in the firm’s market outlook Lin and investment strategy through both his leadership of the firm’s research group and his position on Altair’s Investment Committee.

“Rachael and David represent the very best in our field. We feel fortunate to have their talents at Altair and we are excited to welcome them as new partners to the firm” notes CEO, Rebekah Kohmescher.

20 FEBRUARY 8, 2021 • CRAIN’S CHICAGO BUSINESS

CLASSIFIEDS

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CAREER OPPORTUNITIES

CAREER OPPORTUNITIES

ANTHEM, INC. seeks APPLICATION ARCHITECT SENIOR in Chicago, IL to derive, define, and explicitly represent various artifacts within The Enterprise Framework. Apply at www.jobpostingtoday.com REF #40348.

Interested candidates send resume to: GOOGLE LLC, PO Box 26184 SAN FRANCISCO, CA 94126 Attn: V. Cheng.

Please reference job # below: SOFTWARE ENGINEER (Chicago, IL) Design, develop, modify, &/or test software needed for various Google LLC projects. #1615.40102 Exp Inc: C, C++, Java, JavaScript, HTML, Objective-C, Cocoa, or CSS; OO analysis & design; & adv algorithms, multi-threading, machine learning, AI, data mining, APIs, natural language processing, or MapReduce.

CAREER OPPORTUNITIES ENOVA FINANCIAL HOLDINGS, LLC seeks DATA ANALYST II in Chicago, IL to support the data needs of Strategy, Product, Compliance, Operations and Analytics teams. Apply at https:// www.jobpostingtoday.com/ REF# 24817.

CAREER OPPORTUNITIES WABTEC U.S. RAIL, INC. seeks LEAD ENGINEER 2 - EMBEDDED SW DEVELOPMENT in Chicago, IL to lead the dvlpment of wrld clss lcmtve dgnstic applctins. Req domestic trvl up to 5% of time.

Apply at www.jobpostingtoday.com, REF# 79038.

CAREER OPPORTUNITIES RESEARCH DATA ANALYST, NORTHWESTERN UNIVERSITY, Chicago, IL. Engage in data management, quality assurance, analysis and reporting. Prior experience in processing and analysis of neuroimaging data required. Resumes to: TRICIA PARTLOW NORTHWESTERN UNIVERSITY 300 E Superior Street Tarry 8th Floor Chicago, IL 60611

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BOEING

To place your listing, contact Claudia Hippel at 312-659-0076 or email claudia.hippel@crain.com www.chicagobusiness.com/classifieds

Boeing hasn’t enjoyed the same boost as its rivals, but it recently won a valuable Air Force contract for an updated F-15 fighter.

Boeing could feel pain of COVID relief spending BOEING from Page 3 capitalizing on a surge in Pentagon spending, posted annual growth of 9 to 12 percent.

“The defense segment has immensely benefited the company during the COVID-19 pandemic by being a stabilizing factor in a tumultuous time, but the company has largely missed the large upswing in U.S. defense spending over the past four years,” Morningstar analyst Burkett Huey wrote in a note to clients.

Boeing needs every penny it can get from defense as the rebound in air travel remains stubbornly out of reach, leaving little demand for new commercial airliners. The Chicago-based company burned $18.4 billion in cash in 2020 as deliveries of the 737 Max were on hold for most of the year, and deliveries of the 787 also stopped because of quality-control issues.

It’s likely to burn an additional $3 billion to $5 billion this year, estimates S&P Global Ratings. Analysts say Boeing can likely weather the storm: It has nearly $26 billion in cash and short-term investments, having borrowed about $36 billion since the downturn began.

Calhoun told analysts he expects Boeing’s defense revenue to grow “at the lower end of the single digits” this year. Things look dicey beyond that. Amid a global pandemic, government spending on vaccines, testing and treatment will rise, cutting off the easiest path of future growth for Boeing’s defense unit.

‘CRIPPLING’ DEBT

Find your next corporate tenant or leaser.

Connect with Claudia Hippel at claudia.hippel@crain.com for more information.

P020_CCB_20210208.indd 20

The U.S. government already has committed to more than $3.5 trillion in coronavirus relief, from vaccinations to economic stimulus. And the Biden administration is pushing for another $1.9 trillion in pandemic relief. Total federal spending has been about $4.8 trillion annually.

“When the dust settles on COVID, we will be left with a potentially crippling amount of debt, and sooner or later we will need to confront that as a matter of national public policy,” says Anthony LoSasso, an economics professor at DePaul University. “The cost of servicing that debt will naturally crowd out other spending priorities. Defense will likely be pretty high on that list.”

Defense spending already was

NOT ENOUGH LIFT FOR BOEING Its defense business has held steady, but Boeing needs growth to overcome the drag from its commercial-jet business.

Aircraft Defense BOEING SALES (IN BILLIONS) Total sales 2017

$54.61

2018 2019 2020

$23.94

$57.50 $32.26 $16.16

$26.3 $26.10

$26.26

$94.01 $101.13 $76.56 $58.16

Source: Company filings

due to slow after rising 20 percent profits in the defense business to under the Trump administration. $1.5 billion from $2.6 billion.

The boom didn’t benefit Boeing as much as other military conTREADING WATER? tractors. Boeing’s defense revenue To grow in defense, Boeing will grew 10 percent between 2017 and have to take business from others, 2020, while Northrop Grumman’s which the company has struggled rose 42 percent and Lockheed to do. “The most anybody can Martin’s climbed 31 percent. hope for is to maintain their old “Northrop Grumman is the share,” says George Ferguson, team to beat in defense contract- an analyst for Bloomberg Inteling, and Raytheon and Lockheed ligence. “I think it’s going to be are nipping at their heels,” says really hard for anybody to grow Loren Thompson, chief operating share.” officer of the Lexington Institute, a However, he says Boeing’s air think tank in Arlington, Va. “Boe- focus might be an advantage now. ing has a different kind of busi- “We think ground forces will get ness: The other three are trending less funding in the future.” Instead, more toward munitions and elec- he sees “more of what we call force tronics. Boeing is still about things projection and presence” and rewith wings, plus space.” newed focus on Asia by the Biden Boeing lost a $13 billion contract for ballis“BOEING HAS A DIFFERENT KIND OF tic missiles to Northrop Grumman, which also BUSINESS. . . .BOEING IS STILL ABOUT won an $80 billion contract for a new long- THINGS WITH WINGS, PLUS SPACE.” range bomber.

Loren Thompson, COO, Lexington Institute Nonetheless, Boeing landed some lucrative contracts during the recent Pen- administration. “If you’re going tagon spending spree, Thompson to have a presence in Asia, you’re says. Wins included an $890 mil- going to do that with aircraft and lion unmanned refueling-tanker ships.” project for the Navy, which could Thompson sees opportunity in grow to $13 billion, as well as a the space segment, particularly in $43 million contract for under- national security programs. Boesea drones. Boeing also landed a ing has stumbled with its Starlin$9.2 billion deal to provide the Air er replacement for NASA’s space Force with new training aircraft shuttle, trailing rival SpaceX. Boeand a $2.4 billion contract for new ing’s new moon rocket also has helicopters. The Air Force ordered suffered setbacks. updated F-15 fighters last year in a “Their space problems have deal that could be worth up to $23 been on the civil side, and those billion. are fairly easily rectified,” ThompBoeing’s big contract victory a de- son says. “The No. 1 thing for cade ago for a new Air Force tank- (Boeing) is to secure major coner has been plagued by delays and tract wins. They missed out on the other problems. The company took (B-21) bomber and the new ICBM. a $1.3 billion charge for the KC-46 They’re looking at a hole that must program last year, which dropped be filled.”

2/5/21 4:32 PM

CRAIN’S CHICAGO BUSINESS • FEBRUARY 8, 2021 21

Employers’ next challenge: Post-COVID space needs

OFFICE SPACE from Page 3

Ray Koenig

PHOTOS BY JOHN R. BOEHM

‘COMMUNITY’ VS. CONVENIENCE The 72,000 square feet that law firm Clark Hill leases on three floors of One Prudential Plaza included vacant space managers liked to have available to quickly staff up as the company won new business. Now it’s too much.

“Now we get to toss out those traditional projections,” says Ray Koenig, member in charge of the firm’s Chicago office.

His employee surveys showed that before the pandemic, less than 10 percent of its team worked remotely three days or less per week. Today, only 15 percent say they want to work from the office full time in the future, with the majority saying they’d prefer to be there three days a week or less.

Koenig remains concerned about the firm’s 110 Chicago-based attorneys and staff missing face time with each other, but the overwhelming survey response was that location didn’t seem to impact collaboration, he says. “Face time today doesn’t necessarily mean (someone) sitting in a chair across my desk.”

Younger attorneys still say they would prefer to work out of the office every day to feel connected to the firm “community,” Koenig says, and to learn from more veteran partners. He sees a challenge in creating a policy that allows both flexibility but also encourages interaction among colleagues.

That likely means more desk-sharing among people that aren’t in the office as often, “but we don’t know the answer to any of that,” Koenig says. “That’s what we have to explore.”

GETTING-TO-KNOW-YOU GATHERINGS Like many growing tech companies in Chicago, IT consultant Ahead spent the early part of 2020 figuring out how to add more seats in its 29,000-square-foot office at 401 N. Michigan Ave. to accommodate a couple dozen new hires who joined in the months before.

COVID not only put that on hold, but feedback over the past year from most of its more than 200 local employees showed “people are enjoying being able to work from home,” says Michael Hoehne, who oversees Ahead’s human resources department.

He says the company has functioned well during the pandemic and predicts based on worker surveys that about 20 percent of its team will almost never be in the office in the future, while another 20 percent will want to return to the office five days a week. The majority will land somewhere in between.

More people working from home could become a release valve for the company to avoid leasing a lot more space for new hires. That may lead to “more of a hybrid” of personal desks for certain employees in the office and

“more hoteling as opposed to ‘my pictures are on my desk,’ ” Hoehne says.

Ahead has another wrinkle in its workspace calculus: It has acquired two companies during the pandemic. That means new workers and new customers it needs to get to know.

“We will do a lot of hosting here when things come back for both clients and potential clients,” Hoehne says. “The space—even though we won’t have people sitting here like we used to before the pandemic—it will still be used.”

‘PLEASE STAY IN THE SUBURBS’ Jace Mouse

SPACE TO CONNECT Jace Mouse has found a mixed bag of responses from his roughly 100 employees about work in a post-COVID world. But the CEO of tech company PerkSpot has heard a common theme that will shape the future of its 27,000-square-foot office at 320 W. Ohio St.: People are craving space to gather.

“It feels like the last thing we want to think about right now . . . but that’s the big draw that people want the most in our office,” says Mouse, whose firm operates an online platform that companies use to let employees buy discounted merchandise and services.

PerkSpot’s workforce is techheavy—engineers and product developers, for example—and can work well remotely, but its

P021_CCB_20210208.indd 21

business also hinges on collaboration to pair employers with merchants they want. “We spend a lot of time on Zoom and we talk about Zoom fatigue,” Mouse says.

The company aims to hire another 50 people this year, but Mouse isn’t sure what future growth will mean for its office space, which it doubled just more than a year ago. In a telling sign of the work-from-home era, one of his most recent hires lives in Los Angeles.

“When we did surveys, very few people (said) ‘I don’t plan to ever return to the office,’ ” he says. “It’s just going to vary.

Something has shifted for us that we’re hiring outside of Chicago.

But some (employees) are saying that there’s a draw to having a place to go.”

Gary Walter isn’t just guessing that many of his employees will work from home a lot more in the future. He’s counting on it.

The CEO of marketing tech firm Infutor faced a 2021 lease expiration in Oakbrook Terrace, forcing him to decide amid the pandemic whether the company should maintain an office in both the suburbs and downtown, where it leases a small space on Wacker Drive.

After surveys showed two-thirds of the company’s roughly 90 local employees live in the suburbs— many are older millennials with kids, Walter says—and that people were both happy and productive working from home, Infutor late last year subleased its downtown office to another tenant and signed an 11-year lease for a full floor at its current Oakbrook Terrace building.

“There were surprisingly heartfelt (survey) responses that said, ‘Please do not move downtown, please stay in the suburbs,’ ” Wal-

Gary Walter ter says, but that many workers still “want to have access to an office.”

Despite plans to add employees this year, Walter opted to lease just more than 15,000 square feet, or roughly the same amount of total space Infutor had before COVID. Some of the company’s accounting

and finance employees, he says, may never return to the office full time.

The new space will have enough seats to accommodate his whole team if it needed to, but it would be a tight squeeze. “I wouldn’t be able to do that five days a week, 52 weeks a year.”

2/5/21 4:33 PM

22 FEBRUARY 8, 2021 • CRAIN’S CHICAGO BUSINESS

SPRINGFIELD from Page 1 to illegal behavior, but you also change the expectation of what should be acceptable behavior, even if it’s not illegal.”

Key reform proposals include: banning legislators from lobbying other governments (Arroyo lobbied Chicago for gaming interests while voting on the issue in Springfield); stopping legislators, and potentially their staff, from becoming lobbyists immediately after leaving government; expanding lobbying rules to cover attorneys and consultants; exposing conflicts of interest by making lawmakers fully disclose outside income; and, perhaps most important, giving the legislative inspector general more independence.

Other states have “revolving door” rules requiring legislators to wait anywhere from six months to six years before lobbying former colleagues. The longer the wait, the less risk of lawmakers “auditioning” for lobbying gigs by shepherding legislation through to benefit potential future clients.

Lou Lang, formerly second in command in the House Democratic Caucus, stepped down in 2019 after three decades in Springfield to work almost immediately for a Springfield lobbying firm whose clients include Exelon, the Health Care Council of Illinois and the University of Illinois. Pam Althoff

resigned from the state Senate and soon registered as a Springfield lobbyist whose client list included Enterprise. While in the General Assembly, she had sponsored a bill to regulate ride-hailing companies, ultimately benefiting rental companies like Enterprise.

Althoff didn’t respond to requests for comment, but in an email, Lang says a lawmaker’s fiduciary responsibility to the public interest lasts only as long as their term in office.

While revolving-door provisions “are popular ethics reforms, and may help at the margins,” he says they “act mostly as window dressing” and that “integrity can’t be legislated.” He adds that a legislator’s experience is a long-term asset that extends well beyond six months or a year.

POWER COULD VARY

The amount of power given to the legislative inspector general to independently launch probes could also vary widely. Currently, legislators sign off on both the start of investigations and on public disclosure of findings. The state’s former acting legislative inspector general, Julie Porter, testified that she completed dozens of investigations, but when she “did find wrongdoing and sought to publish it, state legislators charged with serving on the Legislative Ethics Commission blocked me.”

A special ethics committee appointed early last year shut down without producing a report when COVID-19 hit. An effort to pass an ethics bill during the recent lame duck session fizzled, to the relief of good-government groups that didn’t think it went far enough or was properly, publicly vetted.

Welch and Senate President Don Harmon say they’re committed to ethics reform. Welch has created a new ethics and elections committee and signaled support for term limits for legislative leaders, a move aimed at preventing any single lawmaker from amassing too much power.

Still, some Republicans have their doubts, given Welch’s handling of the Special Investigative Committee looking into Madigan and the ComEd scandal.

“The committee met three times in 100 days and heard from one witness,” says Rep. Tom Demmer, R-Dixon, a member of that committee. “That’s not a thorough investigation. At the same time, now in his role as speaker, (Welch) has indicated that he wants to reconsider the House rules, turn the page, and establish kind of a new day. I take him at his word.”

Welch stepped back from his role as partner at law firm Ancel Glink, where he represented municipalities, but will continue to serve in an “of counsel” role, which a spokeswoman says means “reduced man-

TOMDEMMER.ORG

Is Springfield ready for real ethics reform?

Rep. Tom Demmer, R-Dixon, criticized the handling of the panel looking into the ComEd scandal. agerial, operational and consultative responsibilities compared to partner-level leadership.” His wife remains a partner at the firm.

Madigan was a partner at a property tax law firm throughout his term, as was former Senate President John Cullerton. Republican Rep. Jim Durkin also switched to “of counsel” at his firm when he assumed House leadership. Harmon is the exception: He resigned from his law firm when he became a legislative leader.

All point to another sticky issue lawmakers agree needs to be addressed but haven’t found a fix for: economic interest statements and recusals. There are no proposals to crack down on outside gigs for legislators. Springfield lawmakers are part-timers with base salaries under $70,000, so most hold other jobs.

Rep. Kelly Burke, tapped by Welch to lead the new ethics committee, is

also an Evergreen Park trustee. “Our constitution and the way our Legislature is set up, it envisions a citizen Legislature,” Burke says.

Current disclosure statements offer very little insight. Welch, for example, disclosed his legal work at three firms on his 2020 form, but was not required to list his clients or compensation. Similarly, Madigan did not have to disclose lucrative property tax arrangements. That makes it difficult for the public to understand whether lawmakers have a conflict and how big it might be. Plus, under the current code, recusal is optional if a conflict exists on a bill.

“Some of this is gonna hurt,” Kaplan says. “But unfortunately, I think what we’ve seen is there’s no way around that. If the General Assembly is serious about changing this culture and restoring trust with the people of Illinois, some of these deep changes are gonna be necessary.”

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2/5/21 4:31 PM

CRAIN’S CHICAGO BUSINESS • FEBRUARY 8, 2021 23

Chicago software firm going public in blank-check deal The transaction values CCC Information Services, which employs 600 in Chicago and serves the auto insurance industry and its vendors, at $6.5 billion

BY STEVE DANIELS

cloud-based platform to work with repair shops, parts makers, towing services and other vendors that participate in fixing cars damaged in accidents.

co-based Dragoneer Investment Group. The deal will value CCC Information Services, CCC at about $6.5 billion and is the Chicago-based software slated to be finalized in the secfirm that’s built a $600 million ond quarter.

SPACs, better known as business on a digital platform serving the property and casu- blank-check companies, are alty insurance industry, is re- proving to be a popular alternative to the traditional initial turning to the public markets.

Fourteen years after selling public offering. Shares of Dragto an investment firm and then oneer Growth Opportunities, the SPAC acquiring CCC, were iniBLANK-CHECK COMPANIES ARE tially down on the news Feb. 3.

PROVING TO BE A POPULAR CCC has posted ALTERNATIVE TO THE TRADITIONAL 20 straight years of revenue growth, INITIAL PUBLIC OFFERING. profiting on the insurance indusbouncing through two more try’s move toward digitizing private-equity owners, CCC has many of the functions it used to a deal to go public via a trans- handle manually, particularly action with a special purpose processing of claims. Eighteen acquisition company—called of the 20 largest U.S. property a SPAC—run by San Francis- and casualty insurers use CCC’s

R&D INVESTMENT

In a presentation Feb. 3 for investors, CCC CEO Githesh Ramamurthy, a 29-year veteran of the company, painted a picture of a firm whose growth potential is steady and dependent on trends showing no signs of changing.

“We have grown this business in every economic cycle,” he said. Ramamurthy, 60, will continue as chairman and CEO after the deal closes.

More than 30,000 companies, including over 300 insurers, connect with each other via CCC’s platform. The company invests at least $100 million annually in research and devel-

opment to improve its system and develop new products.

On revenue of $600 million in 2020, it generated $203 million in earnings before interest, CCC Information taxes and Services CEO Githesh depreciation Ramamurthy and amortization.

CCC projects revenue in 2021 will grow more than 12 percent to $675 million, and EBITDA will increase to $242 million.

CCC has been owned since 2017 by Palo Alto, Calif.-based private-equity firm Advent International. Advent intended to take CCC public through an IPO, Managing Director Eric Wei said on the investor call. It opted instead to partner with Dragoneer, a tech investment

firm founded by Marc Stad, known for early investments in hits like Spotify, Slack and DoorDash. Dragoneer’s SPAC went public in August.

The transaction will net CCC $968 million, since none of the existing investors are cashing out in the deal. Advent, too, will continue to be a shareholder.

New shareholders providing add-on investments include giants like Fidelity Investments and T. Rowe Price, as well as the family office of billionaire Michael Bloomberg.

CCC employs 600 in Chicago and is moving to a new Fulton Market office from its longtime home at the Merchandise Mart.

Its total workforce numbers 1,780.

The firm was founded in 1980

by Howard Tullman, then an attorney who later gained renown as a startup investor and CEO of the 1871 tech incubator in the Merchandise Mart. Tullman no longer has any involvement in CCC.

Drugmaker AbbVie predicts quick rebound from Humira revenue drop-off ABBVIE from Page 1

HUMIRA PATENT CLIFF NEARS AbbVie is counting on new immunology drugs Skyrizi and Rinvoq to fill the gap when Humira sales plummet in 2023 as copycat drugs invade the U.S. market.

PROJECTED HUMIRA SALES Wall Street estimates $19.6 billion

2022 $12.5 billion

2023 $8.5 billion

2024

SKYRIZI & RINVOQ ACTUAL AND ESTIMATED SALES Actual 2020

$2.3 billion $15+ billion

AbbVie 2025* BLOOMBERG

accounting for 61 percent of AbbVie’s revenue. But international sales of Humira sank 13.6 percent last year when European patents expired, even as rising U.S. sales pushed overall revenue for the drug up 3 percent to $19.8 billion.

Still, Gonzalez’s forecast comes with a big blank. He doesn’t say how much revenue will drop in 2023. Analysts project a 7 percent decline to $54 billion, as Humira sales plummet 36 percent to $12.5 billion.

Wall Street expects Humira sales to plunge another 32 percent to $8.5 billion in 2024 and continue falling thereafter.

The drugmaker had been reluctant to project beyond 2023, particularly after its initial estimate for Humira’s 2018 loss of exclusivity in Europe turned out to be too optimistic.

Now another optimistic projection underpins the company’s rosy outlook. AbbVie is counting on two new immunology drugs to fill much of the Humira gap. Gonzalez predicted Rinvoq and Skyrizi will generate combined annual sales of $15 billion by 2025, an ambitious target for products that posted revenue of $2.3 billion last year.

“We are confident that Rinvoq and Skyrizi have the ability to offset any level of Humira biosimilar erosion by 2025, while

Richard Gonzalez continuing to maintain strong growth through the rest of the decade,” Gonzalez said.

AbbVie shares moved up less than 1 percent on the forecast, reflecting skepticism among analysts who expect Rinvoq and Skyrizi to generate closer to $12 billion in 2025. At $108.53 at closing on Feb. 4, the stock has declined 2 percent over the past three years on persistent worries about post-Humira prospects.

“They’re not going to fully replace Humira, but they’re certainly growing very nicely and are going to help supplement that loss of sales in the mid2020s,” says Edward Jones analyst Ashtyn Evans.

$12 billion

Wall Street 2025* Note: 2020 marks first full year on the market for Skyrizi and Rinvoq.

The astronomical growth Gonzalez projects for Rinvoq and Skyrizi isn’t unheard of, Evans says, recalling Merck’s immuno-oncology blockbuster Keytruda: “The key is the additional indications.”

By 2025, Rinvoq and Skyrizi are expected to be approved to treat all the major diseases Humira treats, including rheumatoid arthritis and psoriasis—plus atopic dermatitis, which AbbVie says is a large and underpenetrated market.

Additionally, oncology drugs like Imbruvica and Venclexta should help mitigate the post-Humira pressure, Morningstar analyst Damien Conover wrote Feb. 3.

“The firm’s ability to drive

*Estimate

growth beyond 2023 will be largely driven by its pipeline, which lacks a high number of late-stage assets,” Conover writes. “However, the early-stage pipeline is focused in the right areas of unmet medical need of oncology, immunology, and neurology, which can advance quickly to the market if favorable data is achieved.”

SOFTENING THE BLOW

Analysts tend to agree that last year’s $63 billion Allergan acquisition, which didn’t come with a notable pipeline of new products, won’t boost AbbVie’s growth rate. But by enlarging the overall revenue base to a projected $55.7 billion in 2021,

Sources: AbbVie and Wall Street estimates, SEC filings

Allergan softens the impact of declining Humira sales, which now represent less than 40 percent of total revenues.

“This is how the drug industry works: You create a blockbuster success, and then it becomes the giant hole,” says Erik Gordon, professor at the University of Michigan’s Ross School of Business. “The narrative that AbbVie had to escape is that AbbVie equals Humira,” and Rinvoq and Skyrizi are helping it do that, he says.

“It won’t be the company it was when it had Humira,” Gordon says, “but it can be a different company that’s a good company.”

“THIS IS HOW THE DRUG INDUSTRY WORKS: YOU CREATE A BLOCKBUSTER SUCCESS, AND THEN IT BECOMES THE GIANT HOLE.” Erik Gordon, professor, University of Michigan

HOW TO CONTACT CRAIN’S CHICAGO BUSINESS EDITORIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312-649-5200 CUSTOMER SERVICE . . . . . . . . . . . . . . . . . . 877-812-1590 ADVERTISING . . . . . . . . . . . . . . . . . . . . . . . . . 312-649-5492

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CLASSIFIED . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312-659-0076 REPRINTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212-210-0707 editor@chicagobusiness.com

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MORE THAN EVER, OUR CHILDREN NEED US. Because of COVID-19, hunger has more than doubled. And children are particularly at risk; one in three households with children is facing hunger. As job loss and the continued economic downturn push more people to the end of their resources, many families are having to choose between paying bills or buying food.

In four decades of feeding our community, we have never faced a need so great.

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