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Real Estate Bisnow
   
January 9, 2012 
 
 

Cottage Grove Comeback


 
Feb. 1. That's when construction starts on the $46M Shops & Lofts at 47. Meaning, it's also the day a rundown Cottage Grove Corridor gets a big boost toward revitalization. And expect another big day will be wraps in mid-'14. Basically, just clear your schedule.
 
Skilken Properties, prez Frank Petruziello

For the retail developer—Columbus-based Skilken Properties—prez Frank Petruziello (above, snapped yesterday) says this is his team’s first Chicago building and first attempt to bring retail into a neighborhood merchants deserted long ago. The development Skilken started planning seven years ago with TROY Enterprises, has been “daunting.” But along for the ride were The Community Builders, QCDC, city officials, and Chase Bank. Frank says he’ll use the lessons learned to do more such projects. They’re complicated and call for: public/private partnerships, designing a complex that blends into the neighborhood, lets a busy grocery operate unobtrusively with housing, and fits formulas for New Market Tax Credits, TIF financing, etc.

 
US Rail (Summit) MCHI
The Community Builders’ director of planning David Block

The Community Builders’ director of planning David Block (snapped yesterday making us jealous of his stunning view) says construction of Shops & Lofts at 47 (with anchor Walmart) shows the world that investors and a major national retailer are confident in the South Side’s resurgence. Early last year, TCB acquired the shell of a foreclosed condo project that’s one mile from Hyde Park and the lake using federal Neighborhood Stabilization Program funds. Papageorge Haymes designed the new complex with a private balcony for every unit. Rents will be tiered so they’re affordable for public housing approved tenants who’ll pay 30% of their income. Market rate apartments priced for working people include a two-bedroom, two-bath for $1250/month.

 
Leopardo Intext
The Community Builders’  Chicago development team

Here's some of TCB’s Chicago development team (with a total of five metro area projects valued at $155M in construction): Sarah Wick, Kevin Beard, Amanda Pena, Lee Pratter, Jacques Sandberg and Will Woodley. For a first foray into the West Side, they’re building the $49M St. Stephens Apartments with 297 units. Boston-based TCB, the nation’s largest developer of urban affordable housing, has in construction $465M of projects in Boston, Cincinnati, Philly, Louisville, and elsewhere. Everything it builds aims to provide quality housing and also help communities by delivering services: job training, financial education, and tutoring for youngsters.


Digital Realty's New Data Center
 
Digital Realty Trust vp Andrew Schaap

Digital Realty Trust, owner of the world’s largest data center (the 1.1M SF facility at 350 E Cermak; if you lost some, data call them and see if they have a lost and found), is expanding another facility it recently acquired in Franklin Park, says VP Andrew Schaap (above in San Fran yesterday). The San Francisco-based company is putting up a 125k SF building due for completion in March. Then it will start construction on a 300k SF building at the same site to be completed by year-end. Hear more from Andrew and other experts at Bisnow’s 2nd Annual Data Center Boom, Jan 29, Trump International Hotel & Tower Chicago. Register here! 


Big Divide in Chicago Office Sales
 
Real Capital Analytics director of market analysis Ben Thypin

The chasm between Chicagoland’s CBD and suburban CRE sale prices over the past 12 months aptly reflects the national dynamic: a few big cities are doing well while many smaller markets are still struggling, says Real Capital Analytics director of market analysis Ben Thypin (in a photo snapped this morning). As the dust settles from ’12 sales activity, it’s clear now that even the average sale price downtown of $156/SF is well below the Q3 ‘08 peak average sale price, $238/SF. But, based on Moody’s CPPI that considers several other factors, Chicago sale prices have reached 92% of the pre-recession level (3rd best performance in the country), while overall the US is still down 11%. 

540 W Madison St, Chicago

So what to make of the $350M sale of 540 W Madison ($318/SF) that closed on Dec 31 (and was announced Monday) as the top sale of the year? (Besides the fact that Ryan Seacrest neglected to cover it.) Ben says it aligns with the national trend of downtowns outperforming the ‘burbs. In fact, it beats the highest annual average downtown sale price of the last ten years, $298/SF, from Q4 '09 through Q3 '10. But, Ben says the deal is also anomalous because of the Bank of America presence in the 1.1M SF tower. B of A occupies 750k SF but in three years has an option to vacate much of the space. Still, the stability of the bank’s tenancy and its credit worthiness reduces the risk for the new NY owners.


Upcoming Bisnow Events!
 
Tuesday, Jan. 29, 7am-10am. Bisnow's Chicago Data Center Boom! All-star panelists will discuss what's driving demand for data centers, what are user requirements, what new technologies are required, and the different data center technology methodologies. Register here.
 
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