Few in Chicago’s real estate community have seen the sands shift in multifamily development as many times as Belgravia Group founder David “Buzz” Ruttenberg, one of our panelists at Bisnow’s 7th Annual Multifamily Event 7am Thursday, May 26, at the JW Marriott Hotel. After 40 years in the industry, David isn’t surprised by sudden changes in the market and says the fundamentals to successful development remain unchanged.
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Buzz (right, snapped with his Lakewest Venture Partners co-founders Jonathan McCullough and David Mann) says the market will always dictate how developers approach their projects and they have to adjust to the economic changes, whether that be escalating materials and labor costs or the current landscape where demand for smaller condos has been replaced by rentals with loaded amenities packages and condo-quality finishes.
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It also helps to know your target markets. Buzz says Belgravia has had success in recent years with its CA project in the West Loop (shown). Both pre-sales and sales of these two- and three-bedroom units have been as strong as Buzz has seen, even though Belgravia’s condo projects don’t rise as high in the sky as they did in the previous cycle. Adjusting to economic realities has allowed Belgravia to capitalize in a pipeline dominated by apartments. Buzz says that after four decades, Belgravia is a respected brand and homeowners have a sense of value and security when they commit to buying a Belgravia product. And most of the competition from the previous cycle is gone. Buzz says of that crowded pre-’08 crash field, few competitors remain.
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Buzz says he's very high on the state of condo development in River North, particularly west of LaSalle Street. He likes what he’s seen with Smithfield Properties' successes in that area and believes—in a submarket where the construction pipeline is packed like sardines with apartments—Belgravia can successfully sell condos. Belgravia is set to build condos at Erie and Orleans and at 366 W Superior (pictured) on lots the firm purchased from the city last year. Buzz sees Chicago Avenue, between Michigan Avenue and Halsted Street, as a fast-emerging condo market.
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What Chicago continues to have in spades over other major markets is affordability. With tech incubators like 1871 Chicago bringing more startups to the city, Buzz (pictured with Belgravia CEO Alan Lev) says more workers in their 20s and early 30s aren’t as enamored of moving to the coasts and their skyrocketing prices, and would rather be in the city than the ‘burbs. To learn more, please attend Bisnow’s 7th Annual Multifamily Event, 7am Thursday, May 26, at the JW Marriott, 151 W Adams. Register here.
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