Evanston Gives Green Light To New Office Tower, City's First In 20 Years
Stay-at-home orders in many states led builders to shut down construction sites, but Illinois Gov. J.B. Pritzker decided to let such projects go forward, and developers all over Chicagoland are taking advantage.
Evanston’s City Council on Monday approved Vermilion Development’s plan for an 18-story building at 605 Davis St., the city’s first new high-rise office tower in 20 years, and company officials say they could deliver it as early as 2022.
It’s another sign that the onset of the coronavirus pandemic hasn’t yet slowed down new construction in the region. Nonresidential construction starts in the metro area totaled $489M in March, up 77% from $276M one year ago, according to Dodge Data & Analytics.
Chicago-based Vermilion’s 210K SF project, designed by Solomon Cordwell Buenz, will include many of the amenities now common at the newest Class-A office buildings in downtown Chicago, including a tenant lounge and an outdoor terrace. The top two floors will feature private balconies with views of Lake Michigan and Chicago.
“These features paired with a main-and-main location and marquee views will draw high-caliber tenants to the building,” Newmark Knight Frank Vice Chairman Bill Rolander said.
NKF will handle leasing efforts for 605 Davis St.
In some ways, the pandemic may make this building more attractive to prospective tenants looking for modern office space in Evanston, according to Vermilion Managing Director Matt Havey. Worries about the spread of disease have increased demand for better air circulation, touchless doors and elevators, and other safety features rarely found in Evanston's downtown, he said.
"Our architects at SCB are on the cutting edge of all of these trends," Havey said.
Tenants looking for Class-A office space in downtown Evanston have not had it easy. Direct Class-A vacancy in Evanston is just a little more than 5%, and Class-A rents within the submarket have risen 27.2% in the past five years, according to NKF research. By comparison, downtown Chicago’s Class-A buildings have a vacancy rate of 12%.
Unlike Chicago, where nearly 7M SF of office space is under construction, Vermilion's building is the only one planned or even proposed for downtown Evanston.
"That paints a pretty clear picture that the Evanston market is really tight," Havey said.
Numbers like that have also brought other new investment to the city’s downtown. Free Market Ventures, a Chicago-based group, last year bought 820 Davis St., a 76K SF office building, for $10.6M. In April 2018, GEM Realty Capital acquired the 20-story Orrington Plaza, the city’s tallest building, for $91M, a major gain for Golub & Co. and Investcorp, which bought it for $61.1M five years before. And in December 2018, a joint venture of investors Randy Rissman and Robert Wislow bought the 500 Davis office building for $32M, Cook County records show, a big jump from the $18M Steelbridge Capital paid in May 2016.