River North project hits crowded apartment market
BY DAVID ROEDER firstname.lastname@example.org October 4, 2011 6:04PM
Artist rendering of a 50-story apartment building to be constructed in River North.
David Roeder reports on real estate at 6:22 p.m. Thursdays on Newsradio 780 and 105.9 FM WBBM. The reports are repeated at 10:22 p.m. Thursday and 7:22 a.m. Sunday.
Updated: January 23, 2012 3:45AM
It’s the real estate version of an arms race. Downtown developers are scrambling to build apartment high-rises because market conditions are pushing people away from condos and toward rentals.
Backers of the latest apartment project to be started downtown hope to compete on amenities and location. AMLI Residential, a nationwide and Chicago-based developer of multi-family housing, is starting construction this month on a 50-story building at the southeast corner of Clark and Hubbard, for years a parking lot.
The River North site is surrounded by bars and restaurants. Stephen Ross, executive vice president at AMLI, said that should draw a younger leasing crowd. “How they spend their time and entertain themselves, it’s all within a block or two of this project,” he said.
The 409-unit building also will have many bonuses on-site, said Jennifer Wolf, AMLI senior vice president. They’ll include an unusual touch: The building will connect to an existing parking garage at Clark and Kinzie. Its roof will become outdoor space for the tenants. Wolf said it’ll have a pool, cabanas and space for grilling.
The bells and whistles won’t come cheap. Rents haven’t been set because the building won’t open until mid-2013, but Ross said they’ll be at the top of the market. It will compete with two high-end buildings being constructed near the lakefront. Ross hopes renters will find his property is closer to work and where they want to hang out after work.
AMLI’s partner in the project is River North investor Albert Friedman of Friedman Properties Ltd., which will market the building’s ground-floor retail space. The architecture is by Solomon Cordwell Buenz.
As part of a general appeal to environmental and health awareness, AMLI will have a no-smoking policy for the building. Tenants can’t light up even at home. Wolf said repeat violators will have to send $250 to the American Lung Association, a policy AMLI instituted when it opened an apartment building at 900 S. Clark in 2008.
AMLI River North is the last building to be started on a patch of Friedman-owned land that was rezoned a few years ago. Hotels and an office building, the home of Mesirow Financial, have been finished in the development area.
BELL RINGER: Farbman Group, the Southfield, Mich.-based owner of the building at the “weather bell corner,” 79 W. Monroe, reports two leases that have cut its vacancy rate down to the 35 percent range. That’s about half what it was when it bought the 13-story building in early 2011.
Columbia Insurance, in a move from the CNA Center, leased 24,000 square feet and S&R Media leased almost 15,000 square feet. Andy Farbman, president of Farbman Group, said the activity shows a demand for relatively inexpensive office space downtown.
Built in 1906, the old Bell Federal Building is known for its “weather bell” sign that changes color with the forecast.
Jones Lang LaSalle Inc. represented Columbia Insurance in the lease talks and Marc Realty represented S&R Media.
THE WARD ROOM: Ald. Michele Smith (43rd) has revived her Lincoln Park community’s Clark Street Task Force to address persistent retail vacancies from Armitage to Diversey. Its first order of business ought to be a visit to California. Jerry Winkler, owner of Los Angeles-based Marwin Properties, controls much of the property and has been known to sit on empty space.
Downtown Ald. Brendan Reilly (42nd) is engaged in what he calls “zoning housekeeping.” He’s backing the end of special zoning districts that were passed for two projects that were never built: a 50-story hotel for 533 N. St. Clair and a hotel and condo tower at 65 E. Huron on land owned by the Episcopal Diocese of Chicago.
BANK DISCOUNT: Baird & Warner Realtor John Irwin, who works the Lakeview-Lincoln Park-Near North circuit, wondered about the impact of bank-owned properties on home values in that affluent market, so he ran some numbers.
He found that over the last two years, the median prices of bank-owned homes have held steady at about 50 percent of the median for non-bank-owned homes. Irwin also said bank-owned properties average at about 10 percent of the for-sale inventory, but that their share of the number of units sold fluctuates greatly.
It was 10 percent in August, but 29 percent last February.
Irwin also said there’s still a large “shadow inventory,” bank-owned homes not on the market.