| That would be 111 W. Wacker Dr., where the unfinished shell of a condo/hotel tower sat for four years. The developer, Related Midwest president Curt Bailey, says his company's plan for a 60-story luxury tower “represents a visible recovery from the real estate downturn.” | ||
| Curt, left, speaking at Bisnow'sMultifamily event in March. The recent announcement that Related secured $115M in financing to start vertical construction at 111 W.Wacker Dr in early ’13 (for a spring ’14 opening) signals the health of Chicago’s multifamily market. The downtown vacancy rate is 4.5%—an 11-year low—and the average effective rent is $1,032/month, says Reis chief economist Victor Calanog. The last time the Loop saw such a low vacancy rate was during Q3 '01, when it was 3.2%. Rents have well passed their prior peak of $995/month in Q2 ’08, he adds. | ||
| Victor says Related’s deal reflects the current thinking of lenders. It’s tough to get financing for office or retail projects because some vacancy rates are high. But lenders will open the purse for multifamily because it has performed so well the past two and a half years. But while multifamily is still improving, the rate of occupancy improvement is slowing, Victor reports. The dampening of demand for apartments may reflect that home prices have been rising, the still-sluggish economy, and slow job growth. Still, Victor notes, if apartment rents grow 3% to 4% per year going forward verses the 6% to 7% they had clocked-in, “that’s awesome.” | ||
111: A Symbol of Recovery
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Curt Bailey
, Related Midwest
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