You Can Never Have Too Much Pre-Leasing
Developers have to be adventurers into new and unexplored submarkets, so we tapped Vermilion Development prez and CEO David Cocagne (snapped in his home kitchen) to tell us his findings from building up mixed-use project Harper Court in Hyde Park at Bisnow's Chicago Construction & Development Summit on Nov. 19. David says financing the project in '11 was very difficult, but the credit markets have dramatically improved in the past couple of years. They had their eye on the second home of President Obama after noticing pent-up demand from retailers (retailers were always throwing pebbles at their window trying to get them to sneak out and play), and development in the area has snowballed with the addition of projects like City Hyde Park and Mesa Development's Vue53.
Vermilion also has a hand in student housing, picking up 1,500 beds with Harrison Street in the past six months (Kentucky and Texas A&M) and 500 beds a few years back at Ole Miss. They were also just awarded a project to develop administrative offices at IU in Indianapolis. When building ground-up, pre-leasing is key as a risk mitigation strategy, David tells us (at Harper Court they were 82% pre-leased), and the company continues to look for projects in the city and the 'burbs. David's just back from a week-long boot camp at the Culinary Institute of America in California, where he learned to braise, grill, and saute (while blindfolded, we hear).