A potential new financial backer for Sterling Bay’s stalled 14.5M SF Lincoln Yards megadevelopment has emerged about seven months after a pension fund board declined to front it $300M to get the project moving.
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Kayne Anderson Real Estate is mulling the idea of injecting capital into the dormant $6B project along the North Branch of the Chicago River between Lincoln Park and Bucktown, The Real Deal first reported. Kayne Anderson would become the project’s lead financial partner.
Sterling Bay and Kayne Anderson met with city planning officials late last month to discuss the redevelopment agreement Sterling Bay struck with the city, including the fine points of a tax increment financing district that would help pay for the construction of new infrastructure at the site, according to Crain’s Chicago Business.
A city spokesman said no decision is imminent and that the conversation “involved a basic discussion of zoning entitlements and [redevelopment agreement] obligations for Lincoln Yards," Crain’s reported.
Sterling Bay hasn't commented, and a Kayne Anderson statement to TRD says only that it would offer more information “as there are updates to share.”
Sterling Bay has been on the hunt for a new financial partner since August when the Chicago Teachers' Pension Fund turned down Sterling Bay's pitch to give Lincoln Yards a $300M shot in the arm, citing a bad fit and an overallocation to real estate in its portfolio.
The rejection came as two of Sterling Bay’s key financial backers for the development, J.P. Morgan Asset Management and Lone Star Funds, sought to sell their stakes at significant discounts.
The developer broke ground on Lincoln Yards in 2021, setting an anticipated completion date in 2031. But city roadblocks delayed that timeline by three years, Sterling Bay CEO Andy Gloor said last year.
As proposed, Lincoln Yards would include a mix of offices, residential units, retail and other uses, with towers rising as high as 595 feet. Sterling Bay estimated in 2019 that the project would generate 24,000 permanent jobs and serve as a massive tax boon.
As of today, though, just one lab building has been constructed on the site, TRD reported, and no tenants for that 285K SF property have been disclosed.
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