Yesterday, over 900 industry professionals packed into the Hyatt Regency Chicago for the 17th annual Chicago Real Estate Forecast. The most popular panel, which discussed the surge of development along the Chicago River, had attendees spilling out of the Grand Ballroom and craning their necks to hear from the hallway.
Titled “The River Runs Through It,” the panel was moderated by Victoria Noonan, executive managing director at Cushman & Wakefield. Joining her on the dais were David Goldman, executive vice president and COO of Belgravia Group; Murray McQueen, president and CEO of Tribune Real Estate Holdings, a part of Tribune Media; Drew Nieman, executive vice president at CBRE; Tony Scacco, executive vice president with Riverside Investment & Development and Anna Simpson, principal at Sterling Bay.
“The river has been a plus and a minus for most of my career,” Noonan said. The waterway had for many years been a barrier to the CBD’s expansion out of the Loop to the north and to the west. That clearly has changed in recent years, and she asked Nieman for a brief history lesson on Chicago’s downtown, and how it relates to the river.
The CBD was for decades hemmed in by the raised “L” tracks that circle downtown before heading back out to the neighborhoods. “Everyone wanted to be on LaSalle,” Nieman said, “but then slowly things changed and things like light and air became important. If you’re on LaSalle, there’s none of that.”
The development of Sears Tower (now Willis Tower) in the ‘70s expanded everyone’s understanding of the Chicago CBD and suddenly Wacker Drive, a wide and airy boulevard, became the new darling of corporate users. Activity in areas like Fulton Market over the last five years or so has shown a willingness to break the leash radiating out from State and Madison.
“Now with the introduction of projects like Lincoln Yards and The 78, all of a sudden you see the fabric of the ‘main and main’ getting stretched in all directions,” said Nieman.
Riverside Investment, which is co-developing the 53-story, $760 million 110 N. Wacker Drive on the former GGP riverfront site, was impelled by tenant demand for amenities that are specific to locations such as those along the river.
“We want to be near transit, we want to be near the neighborhoods, we want light and air, a high-end office experience, technology and good design,” Scacco said. “Zoning [along the river] had specifically precluded development other than industrial. But the 2008 recession disrupted the market, shook loose land that wasn’t available and enhanced discussions of how we want the city to look and behave.”
Much of the current development along the river was jumpstarted by the city’s own initiatives. What had been an odorous, inaccessible feature has been cleaned up and given back to Chicago residents as a new place to gather.
“In the summer, the River Walk is shoulder to shoulder with people,” Simpson said. “Through thoughtful design, they have made it accessible with broad stairways that draw you down. And not just downtown, but also at 312 RiverRun and Ping Tom Park.”
Simpson’s firm, Sterling Bay, is behind one of the most ambitious projects along the Chicago River, the 70-acre master planned Lincoln Yards. The mixed-use development calls for 12.8 million square feet of office, retail, residential and entertainment uses.
“With a 30-foot setback from the river and open space, folks in Lincoln Yards will be able to connect with nature,” Simpson said. “The river is a natural element that is attractive to employees.”
The river is so attractive that developments like Renelle on the River have gone out of their way to give users access to it. Developed by Belgravia Group, the 50-unit luxury condominium building is now under construction on a small footprint atop a working parking garage.
“The river is permanent open space,” said McQueen. “You won’t have someone putting a high-rise next to you.”
Tribune Real Estate Holdings has two assets along the North Branch—700 and 777 W. Chicago Avenue—that they are redeveloping as The River District, an urban, tech-centric neighborhood catering to residents’ hunger for live-work-play locales. The new neighborhood will extend Chicago’s downtown district and establish a natural connection between The Loop, River North, Fulton Market and River West.
“It’s the perfect location. It’s the hole in the donut. Its shovel-ready, locked and loaded,” McQueen said. “And it gives Chicago a real opportunity to develop something great. The talent wants to be in urban areas, that’s why they are coming to Chicago.”
With a new and unknown mayor headed to City Hall, the panel discussed the future of development along the river and in Chicago in general. Would a new regime spell the end of corporate relocations to the city?
“Whether you like him or not, Rahm Emanuel has been a proactive, staunch, pro-development and the most overt recruiter to businesses coming to Chicago,” Nieman said. “He will literally go on pitches with you.”
The general consensus seemed to be that Chicago remains a powerful draw to companies looking for a foothold in the Midwest and hopefully little will change with a new administration. And with developments like Lincoln Yards, The River District, The 78—as well as new building projects like Renelle and those at the confluence such as 110 N. Wacker and the Wolf Point buildings—the stream of development along the river should flow unabated for years to come.