How Chicago Multifamily Morphed from Mid-Rise Condos to Luxury Towers
Pre-crash Chicago multifamily was all about mid-rise condos. No longer. This cycle, the focus is on high-density apartment towers with shared amenities and other condo-like features. That's among the reasons we're excited to host Bisnow's You're Going to Build What? 3rd Annual Chicago Construction & Development event on Aug. 18 at Trump International Hotel & Tower Chicago, starting at 7am.
Among our panelists, JDL Development president Jim Letchinger says the major difference between the mid-‘90s and now is the scale of multifamily development. Condo projects through 2005 to 2006 were smaller in stories and number of units, while there was very little rental product built pre-2008 because builders saw great absorption rates for the condos being delivered to market. Jim says density is critical when building rental projects these days and estimates a developer needs to plan for at least 200 units and shared amenities in order to give tenants what they want.
JDL has two huge apartment developments in the works. Groundbreaking for a 22-story, 251-unit tower at 640 N Wells is set for November, with delivery of the first units expected in 2017. Construction of a 29-story, 469-unit project at 1000 S Clark (pictured) will be completed in February. Jim says JDL has streamlined its building process as speed to market is essential. JDL has good unit designs it continues to use across its new projects, with room to tweak as necessary. “Time kills real estate deals,” he adds.
Another panelist, Belgravia Group CEO Alan Lev (right, with Fifield Cos COO Alan Schachtman) says the focus on rental development has led to a wide imbalance on the for-sale side between condo supply and demand. Fewer people are in the market to buy, and those that are looking are having a hard time finding good units. Another difference Alan sees between when he started and now is the quality of finishes on the rental side. He says Belgravia was one of the first companies to offer marble and granite finishes in condos. Today, the finishes in new apartments are condo-quality, with different types of quartzes, granites and concretes available. Building shells are more energy-efficient while new structural systems like light-gauge steel allow developers to bring product to market faster.
Alan says while demand for one-bedroom condos has decreased, Belgravia still has success building two- and three-bedroom condos in the West Loop. Belgravia sold out over 100 units in the first four phases of its CA project (shown), mid-rise condos at Carpenter and Madison, and Adams and Aberdeen, and is contracted to build 70 more. Alan believes this is proof there’s a need in the market for condos and Belgravia is responding accordingly. To learn more, please join us for Bisnow’s You’re Going to Build What? 3rd Annual Chicago Construction & Development event, Aug. 18, at the Trump International Hotel & Tower, starting at 7am. Register here!