This Week's Chicago Deal Sheet
More than 3,000 proposed units of housing with a construction value of more than $1B have been put on hold or canceled in the areas covered by a pilot program that introduced more restrictive affordable housing requirements to some neighborhoods, according to research commissioned by Home Builders Association of Greater Chicago.
Susan Tjarksen, a managing director with Cushman & Wakefield’s multifamily practice, led the research effort, and found this list of projects includes more than 300 affordable units.
The demand for housing did not stop, and competition for available units pushed rents higher, she said. As a result, many neighborhood residents get priced out of what would have been naturally occurring affordable housing.
“The research tells a story of unintended consequences of city policies which restrict development of new housing in areas of Chicago where housing demand is highest,” HBAGC Chicago Chapter President Pat Cardoni said.
HBAGC also released a list of recommendations to increase Chicago’s supply of housing, including the creation of Chicago Housing Opportunity Zones.
“We want to take the best of local, state and federal initiatives for encouraging private investment and focus that investment into areas of need,” said Paul Colgan, government affairs director for HBAGC.
The Housing Opportunity Zones would leverage federal opportunity zones, enterprise zones and other programs to provide more incentives for private investment in neighborhood housing.
HBAGC further recommends freeing up to 1,000 city lots for development of traditional Chicago two- and three-flat buildings. This initiative could create 2,000 to 3,000 market-rate and affordable two- and three-bedrooms units for families, according to Colgan, and it includes training neighborhood residents to become owner occupants of the buildings.
CA Ventures appointed Steve Boyack CEO of CA Management Services, the firm’s new property management arm. CAMS oversees operations for CA’s portfolio of student housing communities, which is composed of approximately 15,000 beds, as well as CA’s growing number of residential communities throughout the U.S., Europe and South America, collectively totaling more than 5,000 units. A 25-year veteran of the multifamily industry, Boyack joined CAMS from Greystar, where he led its expansion and day-to-day operations in key Midwest markets, including Chicago and Minneapolis.
Entre Commercial Realty promoted Michael DeSerto to principal and he joins co-founders Dan Benassi and Dan Jones as partners in the firm. DeSerto joined Entre in 2013 as an associate and serves on the board of directors for the Association of Industrial Real Estate Brokers. He won AIRE’s Frank Mahoney Award in 2017.
Evanston, Illinois-based Morgante Wilson Architects promoted four employees from project managers to associates. Diana Ortiz was named associate in interior design, Kevin Thayer was promoted to associate of architectural interiors, and Monica Musialowski and Ellen Whitehead were named associates in architecture.
Envoy Net Lease Partners, a Northbrook, Illinois-based company specializing in single-tenant net leased commercial properties, appointed Eric Spokas chief operating officer. He brings more than 25 years of banking and real estate finance experience to Envoy, with an extensive background in commercial lending, Small Business Administration loan programs, operations management credit risk and compliance. Prior to Envoy, Spokas was president and CEO of Chicago-based SomerCor, where he oversaw a loan portfolio of nearly $500M.
Cushman & Wakefield closed on 10 transactions totaling more than 1.5M SF across the I-55 corridor in the first quarter. Jason West, Sean Henrick, Michael Magliano and Doug Pilcher represented either the tenants or landlords, and sometimes both, in the following transactions:
- Swap.com’s 132K SF lease with Prologis at 2501 Internationale Parkway, Woodridge.
- A 361K SF lease at Prologis’ 850 Veterans Parkway, Bolingbrook.
- An 87K SF lease for Pepperidge Farm at 15901 West 147th St., Lockport.
- A 384K SF lease for Lennox Industries at MetLife’s 187 Southcreek Parkway, Romeoville.
- Blackcreek Group’s 74K SF lease expansion at 771 Crossroads Parkway, Bolingbrook.
- Bristol Group’s 41K SF lease at 11210 Katherine's Crossing, Woodridge.
- Crown Corr’s 60K SF lease at Becknell Industrial’s 1245 Lakeside Drive, Romeoville.
- A 72K SF lease renewal and expansion for Casey Products at 11230 Katherine's Crossing, Woodridge.
- A 178K SF lease renewal at 710 Theodore Court, Bolingbrook.
- A 125K SF sublease for LG Electronics USA at 1251 West 115th St., Bolingbrook.
Michael Page, a professional recruitment consultancy, signed a new lease at 101 North Wacker, according to JLL. The agency worked with Reed Construction for its full floor custom build-out. The firm had 20 Chicago employees two years ago, but expects to employ 50 people by the end of the year. JLL Managing Director Corey Siegrist represented Michael Page.
Xpedient Management Group, a full-service 3PL provider, leased 22K SF of industrial space at 101 Paragon Drive in suburban Romeoville. Lee & Associates’ Terry Grapenthin, Jeff Galante and Ryan Earley represented the owner, Lakeview Realty Investors. Traci Payette and Stephanie Park of CBRE represented the tenant.
Home Chef, a meal kit company, plans to move its headquarters into the redeveloped Old Main Post Office this summer. The firm, which merged with The Kroger Co. in 2018, has more than 750 employees in the Chicago area at its corporate offices in the historic Wrigley Building, at satellite offices for the culinary and customer service teams, and at a distribution center in suburban Bedford Park. Home Chef will move its corporate team to the new site, including marketing, technology, product, culinary, finance/HR, operations and customer service employees.
Interra Realty’s David Goss, Jon Morgan and Lucas Fryman brokered the $7.8M sale of a 14-building, 289-unit portfolio of affordable apartments in Chicago’s Austin, East Garfield Park, West Humboldt Park and North Lawndale neighborhoods on the West Side, and in Roseland on the South Side. The buyer, Chicago-based real estate investment firm Villa Capital Partners, purchased the portfolio from Chicago-based nonprofit NHS Redevelopment and plans to spend about $3M to renovate the properties, which will remain affordable under a seven-year contract with the city. VCP has managed the portfolio since December 2015 and will continue to do so as owner.
CBRE’s John Jaeger and Dan Cohen represented Greenwood Capital Investment in the sale of Autumn Chase Apartments, a 550-unit multifamily property in suburban Hoffman Estates, to Chicago-based Tricap Acquisitions. Autumn Chase contains a mix of studios, one-bedroom and two-bedroom apartments. Located within minutes of the popular Woodfield Mall, the 1970s-era community features an outdoor pool with a sun deck, a tennis court, a clubhouse and multiple barbecue areas.
CONSTRUCTION AND DEVELOPMENT
Construction crews on Vista Tower last week put in place its final beam. Designed by nationally renowned architect Jeanne Gang of Studio Gang, the 1,191-foot Vista will be the city’s third-tallest building when completed in 2020. Developer Magellan Development Group began construction in 2016. The completed tower at 363 East Wacker Drive in the Lakeshore East community will consist of 396 condominiums, a five-star hotel and an array of amenities, including a sky terrace with an outdoor pool, a Tesla car-share program, a golf simulator, a wine-tasting room and more on the 47th floor.
Englewood Construction was named general contractor by entrepreneur Aiman Humadieh for the renovation of a former meatpacking building at 1107 West Fulton St. The firm will help the developers finalize the project design, and by summer begin converting the 19K SF for future retail, restaurant or office use. The work will include replacing the building’s facade, which was removed due to structural concerns, with a new facade that honors the original design, as well as adding a rooftop deck.
J.C. Anderson completed a 60K SF, multi-phased office renovation for the 55th and 56th floor headquarters of Segal McCambridge at Chicago’s Willis Tower. The company was selected to complete a renovation of the law firm’s existing space, which included a new reception area, a new high-end attorney lounge, a café and a boardroom. J.C. Anderson’s construction team was led by John Angelovich, Matt Kantro and Mark Zawadka. Gensler provided the architectural services.
Structured Development and Burnt City Brewing just completed District Brew Yards, the nation’s first brewery collective with a pour-your-own beer hall, located in a repurposed warehouse at 417 North Ashland Ave., in Chicago’s West Town neighborhood. Structured led the conversion of the former photography studio in partnership with Burnt City, which will provide beers to the brewery, along with Around the Bend Beer Co. and Bold Dog Beer Co. The taproom preserves many of the original design features of the 18K SF, bow-truss style building. These include refinished concrete floors, exposed brick walls and Douglas fir beams.
Knighthead Funding provided Noah Properties Chicago with a $14.3M construction loan for Roselle Apartments, a multifamily community in the Chicago submarket of Glendale Heights/Lombard. When completed in the first quarter of 2020, Roselle will feature 72 two-bedroom, two-bath townhomes in six, three-story buildings at 22W456 Irving Park Road. The transit-oriented development sits less than two blocks from the Roselle Metra station, and a 45-minute ride from Chicago’s Union Station.
THIS AND THAT
A newly released report from DePaul University’s Institute for Housing Studies found that the number of affordable housing units in Chicago declined, with the share of affordable units in the Humboldt Park/Garfield Park submarket, which includes North Lawndale, dropping by 5.3 percentage points between 2012-14 and 2015-17. In Austin, the share of affordable units dropped 6.2 percentage points in the same time period. The declines put further pressure on low-income households and likely accelerated their exodus from Chicago, the report said.
Preservation Bronzeville, a volunteer group of community members, and Preservation Chicago have partnered up to identify historic buildings around the 43rd Street commercial corridor. On May 4, historian Timuel Black will kick off a historic property survey as community residents assess what they have and what they want to keep. Volunteers will download to their phones an app from Loveland Technologies that will enable real-time surveying and updating of the survey results. The information collected will allow preservationists to do more than react to demolition threats. Preservation Chicago has begun doing the same outreach in other communities.
Net absorption in the Interstate 55 industrial submarket was 673K SF during the first three months of 2019, a substantial increase over last year’s first quarter, according to Cushman & Wakefield. Overall vacancy dropped from 13.7% in the first quarter of 2018 to 10.1% this year. New leasing activity totaled over 1.8M SF, a 45.7% increase over last year.
SkyPan International, a Chicago-based company that pioneered aerial view photography and uses drones for architectural planning and luxury real estate promotions, celebrated its 30th anniversary. To kick off its fourth decade, SkyPan is offering free consultative services to architects and commercial real estate developers for a limited time. The company has helped design and develop many milestone projects, such as the Hudson Yards megaproject in New York City, the Ritz-Carlton Residences in Waikiki Beach, the Four Seasons at the Surf Club in Surfside, Florida, the Metropolitan in Los Angeles and Chicago’s Vista Tower.