The Harold E. Eisenberg Foundation

Annual Program Book 2018-2019

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14 H arold E. Eisenberg was an innovative leader and passionate mentor in the real estate industry. Today, the Foundation supports his legacy by giving promising students and young professionals in the field the best chance for success. Since its inception 20 years ago, the Eisenberg Foundation has worked with over 3,500 students across 14 real estate education programs. As students have grown into leaders themselves, the Foundation has seen the profound impact mentorship can have on a young adult's career. Ed Wehmer, the CEO of Wintrust, is an exceptional example of the transformative power of mentorship. A passion in line with the Foundation's beliefs that have shaped the it's robust education programming. He credits his career to advice he received when he was 28 years old and makes a point to welcome newcomers at Wintrust, sharing with them the wisdom he has gained over the years. We spoke with Ed on everything from the future of development in Chicago and the current economic climate, to the significance of giving back and building the next generation of leaders. Q: Chicago's seen an enormous amount of development as of late, do you think that will continue into 2019? A: There is a lot of residual work yet to be completed. Also, there are a number of big projects on the drawing board and there's still a great deal of planning going on for even more development. Consider Lincoln yards, the proposed development on the south branch of the river and the development proposed for the corner of state and Chicago Avenue. Overall absorption is starting to become a real issue. Given the current political state, there's a lot in flux. Mayor Rahm Emanuel, who really supported development, is going to be gone, and with this upcoming governor election, people are going to be wondering what's going to happen there too. The outcomes could put a stop to what has been a period of very robust development in the Chicago and metro area. Industrial development is strong and will continue to be strong, but multifamily and residential is getting a little dicey due to the overall absorption issue. Q: As the CEO of a major Chicago banking institution, what are your thoughts on the current local and/or national economic climate? Do you have any predictions for the year to come, specifically in the Chicago market? A: The economic climate is terrific right now, especially since there has been less of a regulatory burden. Couple that with the tax benefits that are being reinvested and I think the economy is very strong, but labor is now an issue for most. The construction industry is under some pressure -- it's hard to get plumbers, contractors, electricians. All of this is leading to wage inflation which will spur overall inflation and thus higher interest rates. Consumer spending is what drives the economy. We've seen a lot of that going on, but I'd love to see more resilience in the housing industry. For a long time now the number of housing starts have been way down. We're seeing a bit of a housing crisis that's a result of the demographics not being quite what they were. Young people used to buy homes while in their 20's, now we're seeing people getting married and forming households later, and buying that first house in their 30's. Housing starts are somewhat hampered by the fact that every bank got burnt by housing in the last downturn. There are a lot of cornfields out there with fire hydrants and streets in the middle of them. As a result, banks are very wary about loans on speculative single family development. If that were to change and housing kicks in that's another leg on the economy that could be very helpful. Q: How have interest rates played a role in housing? A: Rates have been historically low for some time now but have recently begun increasing. We're not even at the normal yet. Until 2008, a 4 or 4.5 percent fed funds rate, and a 6 to 7 percent mortgage rate had been the average. Then the great recession hit and rates tumbled. Rising rates are a psychological barrier to buying for some. I remember my first home loan was at 13.5 percent. and I was happy to have it. Given that, even at a 7.5 percent mortgage rate, it isn't that bad and that's been the norm for a nicely growing economy in the past. People can always refinance. Some people, especially younger folks, say rates are too high to buy. But they never experienced what "normal" was from post world war II to 2008. It will take a little while for that to sink in. Q: As a champion of local business, what are some of the largest challenges, and assets entrepreneurs face in Chicago specifically? A: Chicago really is a hotbed for entrepreneurs right now. We like to call it "silicon prairie." We see a lot of the tech industry moving into Illinois and Chicago because the cost of Exclusive Interview with Ed Wehmer, CEO of Wintrust Thoughts on the future of development in Chicago, "Silicon Prairie" and building the next generation of leaders Special Feature

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