Ben is joined by Kathleen Bertrand of Transwestern for a wide-ranging conversation on the current state of the Chicago office market. They reflect on their parallel 20-year careers in commercial real estate and how market cycles — and downtown activity — are shifting again. They discuss how deal momentum is returning, particularly among smaller tenants, and how Gen Z is helping fuel the shift back to in-office work. Bertrand also shares why landlord flexibility and creative deal-making are more important than ever in a high-cost, fast-moving environment.
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TRANSCRIPT:
[00:00:00] Ben: Welcome to today’s Ten With Ben Podcast about real estate in the new world and about what’s really happening out there. Here we are in Chicago. It’s the end of April. And I think everybody can agree that we’re ready for spring to come. Goodbye cold. Hello Spring. Our market’s been fairly active, which makes the wintertime go by a little bit quicker, but cold is still cold.
[00:00:44] I’m really excited about today’s show. I’ve got, Kathleen Bertrand with me, an amazing broker from Transwestern and a friend of mine that i’m so excited for you to be here. Thank you. Welcome to the show.
[00:00:58] Kathleen: Kathleen. Thanks so [00:01:00] much. I’m glad to be here. Glad to be at the table.
[00:01:02] Ben: Yep. Kathleen, before we jump in, why don’t you tell our listeners just a little bit about yourself, how you got into real estate and just.
[00:01:12] Kathleen: Thank you. That drives you . thank you. Thanks so much. again, so glad to be here. I just celebrated my 20th anniversary in the industry in February, so 20, I would say. But for. 2020, 2021 and 2022. It’s gone really fast.
[00:01:32] Ben: Yeah.
[00:01:32] Kathleen: So those were the slow years. I’m originally from Chicago. I was raised here in the suburbs.
[00:01:37] I live in Lincoln Park. So my life, my personal life is in Chicago. My business life is exclusively in office, downtown office buildings. My. Our portfolio at Transwestern, all of my business. So you could say that my entire financial future is tied to the success of this city.
[00:01:57] Ben: Awesome. And you have a dog in Chicago too, right?
[00:01:59] Kathleen: I have two.
[00:01:59] Ben: [00:02:00] Two!
[00:02:00] Kathleen: Yep. I’ve got two rescues, so it matters to me. Keeps me busy. Yep.
[00:02:05] Ben: For me, actually, what you say, like 20 years, it’s crazy, right? So I’ve been here also a little bit over 20 years. We came in really at the same time. It must have been like within, I don’t know. I started. 2004 . march of 2004. So maybe a year before you.
[00:02:22] Kathleen: That’s funny. I would’ve thought at the time that you had been in several years ahead of me, because I really did, when I started I felt so green and we did a deal together in 2005. . And I, admittedly was tiptoeing through it, trying not to make any mistakes, do everything right but I often think of that.
[00:02:44] Ben: Yeah. that’s what’s great about it, right?
[00:02:47] Kathleen: Yes.
[00:02:47] Ben: We did grow up together.
[00:02:48] Kathleen: Yes,
[00:02:49] Ben: We did deals together. And that’s what bla I have, friends of mine on the show. It just, it’s fun.
[00:02:55] Kathleen: Yeah.
[00:02:55] Ben: Because we could reminisce.
[00:02:56] Kathleen: Probably a good energy.
[00:02:57] Ben: Yeah.
[00:02:57] We could reminisce about those days and I actually [00:03:00] remember, I remember Michigan Plaza, of course. And, we did a few deals and we’ve done a few more.
[00:03:07] Kathleen: Hopefully more to come!
[00:03:08] Ben: And more to come. Anyhow, as we jump in. How are you feeling about the market right now?
[00:03:13] Kathleen: So like any broker, I probably have a little bit of up and down. I try to keep it steady, of course, but really nice 2024. Market itself was going in the right direction. My business went in the right direction. So 2025 was still some of that wrapping up. Yep. Closing, also kicking off the construction projects and moving and all that.
[00:03:36] Excitement. Coming from ’24, bleeding into ’25. I, think that the third and fourth quarters will actually prove more productive than one and two. But in just looking at our numbers from first quarter, we’re, going in the right direction. So we still have some negative absorption, but from fourth quarter.
[00:03:59] [00:04:00] In 2024, it’s significantly less. So we’re definitely, there’s some good momentum.
[00:04:05] Ben: Yeah. that’s good. We in the brokerage business love momentum.
[00:04:09] Kathleen: Yes.
[00:04:10] Yes.
[00:04:10] Ben: Deals get deals.
[00:04:12] But, I was thinking, just randomly bumping into the street yesterday morning and I looked around and I was like, there’s people coming off the train, people coming, actually someone stopped me, that I work with and was like, Ben, stop for a second. look, around, and there were, There were seemingly a lot of people Yes. At nine o’clock in the morning, which, going back even a year ago, I don’t think we could say that.
[00:04:37] Kathleen: So meaningful.
[00:04:39] The city is, its people, right? We’re a gorgeous city. With gorgeous architecture, but every city is, its people and having people walk around on the sidewalks and out for lunch and supporting our retail in the loop, and even those mass amounts of people that come off the trains and you see them coming down and hitting Wacker Drive.
[00:04:56] It’s exciting.
[00:04:56] Ben: Yep. And I think that leads into business too, right? [00:05:00] Where companies are really thinking about the real estate strategies, how much space they’re taking, where they’re taking space, and how important it is. for a while we were hearing this. I don’t talk about Covid.
[00:05:10] Okay. Coming out of that, that time. Yes. for a while we were just hearing oh, you know what, we don’t need an office. And, we’ve got hybrid work and it’s so great. And I think that everyone’s taking a step back now and saying is it really that great?
[00:05:26] I’m sure you, I’m sure you read as did I yesterday about, Intel saying your people have to be back for four days a week.
[00:05:34] Kathleen: Yes.
[00:05:34] Ben: And some of these other companies where, It’s happening. And I even, I read an article yesterday that this, surprised me a little bit and I’ve been preaching this for a long time. So it validated what I was saying is that Gen Z is driving some of this great, a lot of these younger, new people that are coming into the workforce, they do not wanna work at home.
[00:05:56] Kathleen: And it makes sense.
[00:05:57] Ben: And from a company standpoint, they have to adapt [00:06:00] to that.
[00:06:00] Because they’re our future.
[00:06:02] Kathleen: Yeah. They’re our future. And when you think about it, all of us, when we come through that time, we’re coming up in the business. When you go into the office, that’s where you make so many friends, you have so many experiences in the city. Some people meet their partners and date within their industry. And that’s so important in creating that culture in addition to just supporting how important it is to build your business and learn how to be a professional and learn from people that are adjacent to you, but also above you. Yep,
[00:06:34] Ben: And it’s, crucial. that’s all right.
[00:06:37] So it brings me back to this idea of I’m excited there’s some good momentum. I haven’t looked at the numbers, and, I’m sure you can probably validate this, ’cause you’ve got, I don’t know how many square feet that you oversee personally and as part of your team.
[00:06:53] But there’s no doubt that transaction volume is up. Again, correct me if I’m [00:07:00] wrong. But you look at probably, number of tours and folks calling and asking about space.
[00:07:07] Kathleen: Yes.
[00:07:09] Ben: It’s up.
[00:07:09] There’s no doubt about it and so that, I think that in itself like really helps business.
[00:07:14] Kathleen: Yes. Also, to everything that you said I agree with but I will piggyback on that and point out, in ’24 in the years leading up to that, we still were seeing pretty significant contraction.
[00:07:26] Ben: Yep.
[00:07:27] Kathleen: And so I wouldn’t say there’s a sweeping change, but we are seeing a trend of the contractions. Dissipating. And now we’re starting to really see not just renewals or relocations, but expansions so on large deals. Which are so important, but also the smaller deals. Leasing velocity is so great.
[00:07:48] So for every deal that you do over a hundred thousand feet, you’re doing a hundred deals that are under 20,000 feet or more. Actually, it’s probably more than that. [00:08:00] but seeing that expansion, seeing those expansions and experiencing that is really good for our city. It’s good for our market.
[00:08:07] Ben: Yeah. We’ve seen that even a number of groups that had taken space, in the last four or five years, or even a year ago, that they’re now needing some more space, which, again, even a few years ago, it was like. Space. Are you kidding me? And so that’s all real. And that where like from a broker standpoint, from a tenant side, we start thinking about like, all right, like we have to make sure that we’re getting those options built in to leases so that, if there’s an adjacency, at least we want some sort of right to it. I gotta geek out about some of it because it’s exciting. It feels good when I go outside, like I’m not the only one on the street. And so all that is good. So I know you have a lot of, you represent a number of buildings in the Central Loop.
[00:08:49] Kathleen: I do.
[00:08:49] Ben: I get probably asked about Central Loop pretty often. Especially oh, when’s Google opening? What’s going on with that building? What is going on in the Central Loop right now for you?
[00:08:59] Kathleen: [00:09:00] We always talk about the trends and it’s legit the trend of Wacker Drive, north and south and the leasing velocity that’s happening in that area is very true and it’s the driver of our market.
[00:09:12] We are seeing leasing velocity in the Central Loop. so I represent buildings in the North Central Loop closer to the river, as well as deeper into the South Central loop. I know it makes it sound really tough. Last year I closed probably 325,000 and 330,000 square feet in the Central Loop and that’s just me. So it’s happening. There’s a value play there, especially with landlords that are able to transact and who are financially stable. It is the center of the city. So if you have a demographic of employees coming from city areas. It’s easy to get to.
[00:09:51] That is meaningful. If you’re gonna bring them back, let’s make it easy for them to get to. But with that said, the Google project and [00:10:00] also I’ll pair that with, JP Morgan Chase. So these are really exciting. Thompson Center is amazing. If anybody wants to walk past it, check it out. It’s super cool what’s going on over there.
[00:10:11] There will also be improvements to the public transportation and it needs to happen. That definitely needs to happen. It definitely needs to happen.
[00:10:19] Ben: So someone was asking me about that the other day. They’re like, you know how, is the transit system? And they were they were the, question was also geared, there’s someone from New York.
[00:10:29] It was geared to, our cities are so much different. Everyone’s back in New York and it feels really good and, he was saying that, Chicago, there’s a number of things that are happening here. And he was just saying that New York was better.
[00:10:44] And I was like, I don’t know. I said, I take the train. Actually, I started taking the train a little bit more recently.
[00:10:49] Kathleen: Yeah. Good for you.
[00:10:50] Ben: ‘Cause of what’s going on the Kennedy. And I said, you know what? It sometimes smells right? It could be cleaner but then I said at the same [00:11:00] time but I walked down streets of New York and it pretty much smells like pot everywhere.
[00:11:04] So what’s the difference? I was like, it is what it is. But yeah, I think that to your point, that, it does need an upgrade though. Like when people come, it needs some attention. People come to our city like you wanna put your best foot forward and if you’re taking public transit, it’s tough.
[00:11:20] Kathleen: So the inside of the Google, inside of Thompson Center, Google, I think that’s part of their project, will do that inside. And there it was an article that came out, it was like a $10, $12 million investment that’ll go into the train station there and cleaning that up. So I think that’s great. And then Chase Tower doubling down, recommitting to the building, renovating that the work is there. The scaffold, it’s not scaffolding, but like the barriers are up. Closing down that McDonald’s, I think all of that’s gonna be renovated.
[00:11:50] That’s hundreds, thousands of employees that are coming back. And so I think that is so important to have those two kind of nice anchors. And there’s more. But those are the [00:12:00] big significant ones. And, it will really help revitalize that area too.
[00:12:05] Ben: Yeah. That’s exciting.
[00:12:06] I think it’s all part of the, just the, I guess if there’s a master plan, right? But when you get Google to commit to something like that, everyone talks about it. So I remember even, it’s already been, I guess at least a couple years, where we’re like, yeah.
[00:12:21] That’s not till ’26, right? It’s hard to believe. And you said it like 20 years just flies by. ’26 is gonna be here. I’m like. Whoa. It’s like you gotta take a step back sometimes and just appreciate that. Even it’s a roller coaster, I think, for those that don’t know what we do.
[00:12:41] It’s a roller coaster, It’s up, it’s down. You gotta ride up, you gotta ride the wave. But at the same time, like just finding some consistency and knowing that, I think for you, right? You, represent a bunch of space and understanding that you doing your fundamentals and you’re like exactly doing what [00:13:00] you need to be doing that.
[00:13:02] People are gonna come to the building. Companies are gonna come to the building. And, you’re gonna get some deals done.
[00:13:08] Kathleen: Yeah. Position your product well, and like you said, fundamentals,
[00:13:12] Ben: Some of that represents a lot of landlords. Have you seen any changes in the deal terms?
[00:13:19] Even in the last six, 12 months from, you know what I’m gonna call the post COVID, crazy concession packages or would you say that maybe it’s even, things are getting a little bit more, even higher concession packages and caveat that with. construction prices are high.
[00:13:40] Like how do most landlords wrap their heads around that? Because in my view, sorry, I know I’m just rambling here, but in my view, like construction prices aren’t gonna go down.
[00:13:51] Kathleen: How do you deal with that? How do you make deals make sense? Every ownership is a little bit different.
[00:13:55] Whether it’s their stability, their funding, what they owe their mortgages. [00:14:00] Understanding all of that. So I’m gonna make some kind of sweeping generalizations. I would say that building owners, like any business owner has experienced at one time or another, or continuously fatigue.
[00:14:11] Because it’s difficult to justify to perhaps their investors on why these concessions feel like they have ticked up, and we can point to construction pricing, which is very valid and meaningful and true. That our pricing to build spec suites to turnkey, to improve corridors and washrooms.
[00:14:36] There’s all that behind the scenes that also has to happen. Demolition. All of these costs have gone up and at some point a deal isn’t going to make sense, just financially it’s not. Now, there’s a lot of reasons why you might do a deal that is maybe somewhat closer to a zero return or perhaps even negative, but that can’t be the norm in a building ’cause it’s [00:15:00] just not a creative to the building, of the value of the building.
[00:15:03] Ben: Every owner owns it to make some money.
[00:15:05] Kathleen: At some point there’s an exit plan and so those deals need to make sense. So what I always recommend to my clients is to just stay nimble, keep an open mind. There’s going to be some creativity coming across your desk and how to get some of these deals done.
[00:15:27] This is how brokers on both sides of the table work together to keep deals moving forward and ownerships that do that. The nimble creativity, responsiveness, you and I have talked about that, how important that is. those are the winners.
[00:15:43] Ben: I love that, I love how you said that.
[00:15:44] Keep an open mind, Because not everything fits into, to this same box anymore. I would say even nothing fits in the same box. And so if that’s all you can see, it’s harder to get deals done in this environment because I know , I’m probably calling you every so often saying, “Hey, I [00:16:00] got something.”
[00:16:01] Like it’s, a little bit different. But, is this a deal that you know you can do?
[00:16:07] Kathleen: Yes.
[00:16:08] Ben: That’s the thing, the ones that, the owners that are really able to like, call it, it’s not even so much as think out of a box, but just understand that they’re not all the same.
[00:16:18] Kathleen: Yes.
[00:16:18] Ben: And are the ones that are really doing well in this market.
[00:16:21] Kathleen: Yes. And these owners are sophisticated. They know what they’re doing. so these are pension funds, these are insurance. These, this is family money they can own in Chicago and nationally. so they know what they need to do in order to add value to their buildings.
[00:16:37] . But still staying open-minded on what the goals are, the goals to drive leasing velocity, then yes, sometimes maybe you would take a few hits. Yep. And that’s just the nature of the aggressive environment that we have here in Chicago.
[00:16:53] Ben: Yep. This has been a great market discussion actually.
[00:16:57] It’s been really fun.
[00:16:59] Kathleen: Yeah. Thank you.
[00:16:59] Ben: The nice [00:17:00] thing is that there’s a lot to talk about, right? I think that we could probably be sitting here for three hours, but everyone gets sick of listening to us. But, no, this has been great. You really, thanks so much for, thank you for being on the show and, joining and, expressing your, your, knowledge and your just, your.
[00:17:21] Your acumen and brokerage. So thank you.
[00:17:23] Kathleen: Appreciate it. First podcast. So thank you. It’s been a lot of fun.
[00:17:29] Ben: That’s gonna do it for us today. Thanks so much for joining this episode of Ten with Ben. If you have any questions, you wanna reach out to me, I can be reached at (773) 562-5263 or at bazulay@bradfordallen.com, B-A-Z-U-L-A-Y at B-R-A-D-F-O-R-D-A-L-L-E-N .com. Thanks again, and until next time, be safe.
