These Projects Breaking Ground Next Year Show Developers Still Have High Hopes, At Least Outside The Loop
Construction sites across the Chicago region hummed with activity throughout the coronavirus pandemic, largely thanks to Gov. J.B. Pritzker’s determination that such projects were key to sustaining the economy and his decision to not issue any orders stopping construction.
The bet paid off by keeping thousands of workers employed, but these projects, including the 101-story Vista Tower, the 55-story Bank of America Tower at 110 North Wacker Drive, JDL Development’s 76-story One Chicago Square in River North and Sterling Bay’s 47-story mixed-use tower at 300 North Michigan Ave., all had financing in place, and developers were completing well-advanced plans.
Launching new projects in the midst of the pandemic and subsequent steep job losses is another level of risk, and many developers and lenders decided to hold off.
Construction starts in the Chicago metro area totaled $8.9B in the first 10 months of 2020, a 23% decline from the $11.6B recorded in the same time period last year, according to Dodge Data & Analytics. The decline was especially steep for residential construction, which totaled $3.4B so far in 2020, compared to $4.7B over the same time in 2019, a 28% drop.
The recession has hit service and hospitality workers the hardest, while work-from-home technology sustains millions of well-paid office jobs. That has given other builders the confidence to keep breaking ground on some office and residential towers, especially ones outside the largely empty Loop, activity that will help sustain the region’s construction industry until COVID-19 vaccines put an end to the pandemic.
Below are six new projects going forward next year and one honorable mention.
1. The Reed
Living in Chicago’s downtown doesn’t have the cachet it did just before the pandemic. But Lendlease Development still sees a bright future. In 2018, it finished The Cooper at Southbank, a 29-story residential building with more than 450 apartments along the South Branch of the Chicago River, just south of downtown, and it is now ready to begin the new neighborhood’s second phase.
Executive General Manager – Development Ted Weldon told the Chicago Tribune the company plans to begin building The Reed, a 41-story tower with 216 condos and 224 apartments, some time next spring on the 7-acre site at 234 West Polk St.
“There is always migration to the suburbs, but we’re very bullish on the urban downtown market,” Weldon told the Tribune. “People love and thrive on the nightlife and the incredibly short commute. It’s a trade-off — if you live in the suburbs, you’re looking at an hour commute every day.”
2. CA6 West Loop
Buyers showed up earlier this year when Belgravia Group opened up sales for the proposed CA6 West Loop, a 72-unit building set to rise at 305-323 South Racine Ave. in the West Loop, according to Chairman Alan Lev. The company found that, unlike affluent empty nesters hunting for luxury condos in the downtown core, younger buyers were still interested in somewhat lower-priced units just outside the Loop. By October, the firm had sold 35% of the units and said it will break ground in January.
3. 1210 North State Parkway
Newcastle Limited just started construction on a mixed-use project with 89 apartments at 1210 North State Parkway in Chicago's Gold Coast neighborhood. The company secured $41.3M in construction financing to begin and plans to deliver the 12-story project, which will include 18K SF of retail space, in early 2022. It has even bigger plans for the neighborhood.
In the fall, company officials presented 2nd Ward Alderman Brian Hopkins with a proposal to construct a 29-story, 299-unit tower at nearby 1130 North State St., the former site of a Barnes & Noble bookstore.
“These are challenging times, but we believe in Chicago and will continue to invest here,” Newcastle Limited CEO Michael Haney said in a press release. “This development, and our proposed, re-designed project at 1130 North State Street, demonstrate our commitment to the city and the Gold Coast neighborhood.”
4. Optima Wilmette
As the downtown residential market suffers, many renters have started considering the suburbs, and developers are ready to seize that advantage. Optima has completed nearly two dozen developments in Chicago’s North Shore suburbs and in 2021 will break ground on a mixed-use development of 109 apartments and street-level retail at 1210 Central Ave. in north suburban Wilmette. Optima CEO David Hovey designed the building, which he said would satisfy the demand not just for suburban living but, with its bird-friendly glass and electric vehicle charging stations, for apartment buildings that include environmentally friendly features.
“As with each project we design and build, we’re very careful to ensure the buildings respect their environment and have a positive impact on the surrounding neighborhood,” Hovey said in a press release.
5. Sterling Bay’s Lincoln Yards
The need for life sciences laboratory and office space escalated in the past few years, and developers are moving quickly to meet that demand. Trammell Crow broke ground in the summer on Fulton Labs, a 400K SF life sciences laboratory in Fulton Market at 400 North Aberdeen St., and developer Sterling Bay just opened The Labs, a renovated life sciences facility at 2430 North Halsted St. in Lincoln Park.
Even in the midst of the pandemic, Sterling Bay leased more than half of the 120K SF building, helping convince company officials to anchor much of its planned $6B Lincoln Yards development with companies and researchers from the sector. It will soon break ground on a 320K SF building devoted to life sciences at the Lincoln Yards site, about 1 mile west of the Lincoln Park building. Designed by Gensler, it will feature outdoor open spaces and seating areas along its Chicago River location.
6. University of Illinois’ Computer Design Research & Learning Center
Sterling Bay isn’t the only group building out major research centers. The University of Illinois at Chicago got approval from its board of trustees in March to budget $117M for the construction of the proposed Computer Design Research & Learning Center. The pandemic did not dissuade school leaders, who decided this fall to move ahead with the 125K SF mixed-use building at 900 West Taylor St., according to Crain’s Chicago Business. Chicago architecture firm Booth Hansen and Seattle-based LMN Architects designed the center, which UIC plans to start construction on in the spring and finish by 2023.
Bonus: The Terminal
This one isn't a 2021 groundbreaking but only barely missed the cutoff.
Mayor Lori Lightfoot said in her 2019 inaugural speech that the city’s development should not be confined to an already-busy downtown and its surrounding neighborhoods. She then launched her INVEST South/West initiative, which aims to bring hundreds of millions in new investment to underserved communities.
The push just had one of its biggest successes. Investment firm Mansueto Office and Chicago-based developer IBT Group broke ground in November on The Terminal, a $50M creative office project at 1334 North Kostner Ave. in the West Humboldt Park neighborhood. The venture will redevelop several old warehouses, and Zopp’s organization is helping search for tenants.