Chicago-based companies Origin Investments and Cedar Street Companies have executed a joint venture agreement for the development of Pilsen Gateway, a $64.5 million multifamily project in a qualified opportunity zone adjacent to Chicago’s Pilsen neighborhood.
Construction recently commenced on the seven-story Pilsen Gateway. The project is being developed on a 1.24-acre site located at 1461 S. Blue Island and bounded by Racine Avenue, Blue Island Avenue and 15th Street. Pilsen Gateway is located less than 1.5 miles from downtown, three blocks north of the Pilsen neighborhood and on the southern edge of the University Village/Little Italy neighborhood.
When completed, Pilsen Gateway will feature 202 high-end apartment units, approximately 7,600 square feet of ground floor retail space, an 8,500-square-foot outdoor amenity deck, a resident lounge, fully equipped gym, an amenitized lobby, great views of the Chicago skyline, proximity to boutique restaurants and 131 parking spaces.
The unit mix includes 75 studios, 42 convertible units, 62 one-bedroom apartments and 23 two-bedroom units. The average unit size is 616 square feet. Seven units in the building—three studio, three one-bedroom and one two-bedroom units—are classified as affordable.
Cedar Street is a well-established and fully integrated development firm with an emphasis in multifamily projects. Origin Investments is a real estate private equity firm. Pilsen Gateway was designed by Hartshorne Plunkard Architecture.
“We saw this as a unique opportunity to develop something of scale, in a neighborhood with tremendous demand but a lack of supply. The project is located at Pilsen’s ‘front door,’ at the intersection of Blue Island Road and 15th Street. We believe our unit type and amenity offering will bode well within the submarket—it’s a fun, vibrant demographic,” said Will Murphy, CEO and managing partner, Cedar Street Companies.
This is Cedar’s second project in the Pilsen market, the first being the renovation of a historic building also along 15th street.
“For over a decade, the land use between Pilsen and Little Italy has been underutilized; that is starting to change,” said Murphy. “We see 15th Street as an extension of Pilsen, and the new developments underway substantiate this. Procuring retailers is the next step.”
Site work is already underway. With an 18-month construction cycle expected, Cedar Street and Origin anticipate delivering the first units in spring of 2021.
“It’s a commonly held Origin belief that investing in a property or a new development that is located within an opportunity zone must be able to stand as a viable investment, before the opportunity zone benefits are considered,” said Kyle Verhasselt, assistant vice president, acquisitions, Origin Investments. “Pilsen Gateway, as designed and envisioned by Cedar Street Companies, meets all of the criteria for a successful investment opportunity.”
Financing for the Pilsen Gateway was arranged by Don Adams, TCF Bank and Michael Slovitt, Berkadia.
The Pilsen Gateway project represents Origin’s fifth investment in its Qualified Opportunity Zone Fund. Further, it is the firm’s second investment in Chicago in the last four months. In August, Origin partnered with MB Real Estate and Hilco in the acquisition of an office building at 549 W. Randolph Street in Chicago’s West Loop/Fulton Market area.
In addition to a number of local projects recently completed or underway, Cedar Street Companies has multiple developments underway in Minneapolis, Cleveland and on the west coast. Notable local projects include the redevelopment of a former office building into 342 units at 5050 Broadway (The Draper), and the completion of a 16-story tower at the corner of Clark Street and Chicago Avenue (The Bush Temple), connected to a historic redevelopment for a total of 130 units.
Pilsen is an established and growing Chicago neighborhood with approximately 100,000 residents. A coming attraction to Pilsen is the Paseo Trail, an urban linear park being developed on a former rail line, similar to the 606 Trail in Logan Square.
