Chicago has seen a remarkable boost in multifamily developments over the last several months. These soon-to-be high-rises have accounted for a majority of new 2016 downtown construction.
Due to the constant demand of tenants seeking out living space in the city, more and more apartment towers are being added throughout Chicago’s liveliest and upscale neighborhoods.
And there’s a reason why these highly anticipated buildings are gaining lots of public interest—apart from their premier locations and proximity to all the fine dining and entertainment options the city offers, building owners and managers are providing a unique assortment of amenities and services these days, making the lifestyle easier for today’s busy professionals.
Chicago’s South Loop, River North, West Loop, Gold Coast, Fulton Market and Streeterville neighborhoods have all been some of the city’s hottest locations for new high-rise apartment buildings lately.
And 2016 is expected to be a major year for the multifamily market. Several developments are scheduled for completions in the upcoming months: 1000 S. Clark, scheduled for early 2016 delivery in the South Loop; Block 37 Apartments, scheduled for mid-2016 in the Loop; MILA, scheduled for mid-August 2016 in the Loop; Vue53 Apartments, scheduled for fall 2016 in Hyde Park; Moment, scheduled sometime in 2016 in Streeterville; NEXT, scheduled for third quarter 2016 in River North; and The Parker, scheduled sometime in 2016 in Fulton Market.
According to Marcus & Millichap’s 2016 Multifamily Forecast, the recent passage of the transit-oriented development (TOD) reform ordinance in the City of Chicago will have a major impact on future development around train stations. The firm also said new investors will be entering the Chicago apartment market in 2016 due to the improving operations, potential for higher yields and increased financial liquidity.
Additionally, the 2016 Market Forecast showed that construction will remain elevated. Apartment inventory will expand 1.0 percent as 6,700 units are completed—more than half of that total will be downtown. The surge in apartment deliveries downtown will push effective rents up 6.4 percent to an average of $1,405 per month in 2016. Vacancy is said to fall 20 basis points to 3.4 percent, the lowest rate since 2007.
Luxury class A, high-rise apartment towers will continue to dominate downtown Chicago by the looks of the recently proposed apartment buildings. According to CoStar multifamily research, the latest list as of February 2016, includes:
- South Loop: 48 E Cermak Rd, Draper and Kramer Development Services; 600 S Clark St, Arthur Holmer; 1210 S Indiana Ave, Crescent Height; 1326 S Michigan Ave, Novoste Corporation; 1136-1140 S Wabash Ave, Keith Giles; and 700 S Wells St, CMK Companies.
- The Loop: 201 N Columbus Dr, Magellan Development Group, Ltd.; 215 W Lake St, Next Realty, LLC; and Wanda Tower, Magellan Development Group, Ltd.
- Streeterville: Park at 451 E Grand (condo), The Related Companies; and 465 N Park Dr, MetLife, Inc.
- River North: 353 W Grand Ave, Onni Group; 215 W Hubburd St, Centrum Partners LLC; 3Eleven, John Buck Company; and 640 N Wells St, JDL Development.
- Fulton Market: Gray Cardiff & Co Real Estate’s 347-357 N Halsted St, JDL Development; One South Halsted, F&F Realty, Ltd.; 1055 W Van Buren, Blue Plate; and 1035 W Van Buren St, Greenstone Capital LLC.
“Renters have responded favorably, supporting the development surge,” Brandon Frankel, Chicago market analyst at CoStar Group, said. “However, with a loaded pipeline, expect new apartment completions in 2016 to surpass the totals from each of the past two years.
To get an inside glimpse at what’s to come, Illinois Real Estate Journal spoke to developers of some of today’s latest projects to find out what amenities and services are being offered these days.
In early June 2015, Fifield Cos. first broke ground on NEXT, a 28-story, 310-unit apartment project in Chicago’s River North neighborhood located at 347 W. Chestnut St.
During the ground-breaking ceremony, Randy Fifield, vice chair and principal at Fifield Cos., spoke about the need for additional city housing.
“With more jobs comes the need for additional housing—housing that is more affordable for the next group of Chicagoans who are looking for starter homes near where they work, without forgoing the amenities they’ve become accustomed to.”
Steve Fifield, chairman and CEO of Fifield Companies, LLC, elaborated on concept of affordable housing and explained to IREJ that approximately 85 percent of the units at NEXT will be one-bedroom and convertibles. The units will generally run small so that rent points are within affordable rent—the smallest units starting from $1,400.
Fifield noted that a lot of the money is being put into NEXT’s public amenities and areas like the party room, media room and Arcade. The styles of the apartments will be seeing changes, too. The medium-sized one bedrooms, for example, will have double sinks and larger walk-in closets, allowing a couple to live comfortably in a one-bedroom without having to pay two-bedroom rents. Half the bathrooms will no longer have tubs but instead, will have oversized glass showers.
“The price difference is significant for couples,” Fifield said. “We’re ramping up and trying to psyche out what our tenants and what they want and where they’re going.”
One way is through their efforts of expanding to create more “green” buildings. Rooms will come equipped with “NEST” thermostats that tenants can program themselves by setting timers for when they are not around. The timers will control the heat and air conditioning and by doing so, Fifield said it will not only cut down energy consumption but it will have a significant impact on cost savings in utilities to the tenants.
As for its name, Fifield said NEXT is the next project to be built north in River North.
“This neighborhood is the next dynamic, close in moving neighborhood—just like when we went to Kinzie Street north of the train stations and filled in the neighborhood with 2150 units in five high-rise towers that hadn’t been there before,” he explained. “We see this as the NEXT, hot neighborhood.”
The project, originally slated for delivery in early 2017, has been running ahead of schedule and the expected delivery date is now third quarter 2016.
Fifield Cos. is also working on the development of The Sinclair, which broke ground in December 2015 in Chicago’s Gold Coast neighborhood. The 35-story, 390-unit apartment tower will include a 55,000-square-foot Jewel-Osco grocery store.
The Sinclair will have 50,000 square feet of private amenity space for its residents. Part of what makes this project unique, apart from the Jewel flagship grocery store at its base, is its yoga room with outdoor decks, where residents can enjoy Pilates with views of downtown Chicago. In addition, its media room will include a 7.1 surround sound that can be used to watch games or use the blackout curtains or large closing doors to enjoy the movie experience.
Internet, Fifield said, is significant at The Sinclair. The fiber optic distribution allows for 50bg download and upload speed at minimum. This is roughly 50 to 100 times greater capacity than it was five years ago.
As for its name, Fifield explained that the firm wanted to stay constant with Sandberg Village in naming the buildings after authors.
“Upton Sinclair released a book called ‘The Jungle’ about Chicago stock yards, so we decided on this to keep it consistent,” he explained.
Niche 905, an 18-story, 202-unit apartment tower located at 905 N. Orleans St. in Chicago’s Near North Side neighborhood, broke ground November 2015.
FitzGerald Associates Architects is designing the building, which anticipates LEED certification.
The development will have 1,750 square feet of retail space on the ground level and parking to fit 150 vehicles.
As of January 2016, Niche 905 had all its building permits, foundation construction complete, and about ready to go vertical, according to Mike De Rouin, president at FitzGerald and principal-in-charge of the project. The project is slated for spring 2017.
DebRouin said there are several amenities and services built for the tenant experience, including a grand lobby with a multitude of gathering and work spaces that tenants can enjoy, coupled with a newly re-imagined roof deck and amenity space that occupies the whole top floor.
He also noted that there’s a section for private gardening, where tenants can grow their own fruits and vegetables. De Rouin mentioned the building will also be wired for the best internet experiences.
The firm is also designing Oak Park Station, a 463,000-square-foot development in downtown Oak Park. The building will be comprised of two buildings, made up of 270 apartment units and more than 28,000 square feet of retail space.
A glass and steel bridge will link the two buildings and act as a gateway onto Westgate Street, a retail shopping district. The project is being designed to meet LEED silver certification with a variety of sustainable elements like green roof gardens for residents, native plants, storm water collection and efficient building systems.