This Week's Chicago Deal Sheet
Aldermen on the Zoning Committee took a big step last week, unanimously approving the city’s plan to reform the Kinzie Industrial Corridor. 27th Ward Alderman Walter Burnett sponsored the move to open up an eastern portion to new retail, restaurants and office developments, in effect extending the burgeoning Fulton Market office hub east from Ogden Avenue to Ashland Avenue.
The measure will go before the full City Council on Wednesday, Sept. 18.
Many real estate developers lobbied the city to open additional sections of the corridor, which stretches for several miles deep into the West Side, but officials opted to preserve the existing Planned Manufacturing District west of Ashland, where manufacturing and industrial services jobs predominate, according to city statistics.
That choice secured the approval of many advocates.
“The bakers, brewers, florists and business services firms that make up modern industry need the small, centrally located building stock our PMD is fortunate to have,” Steve DeBretto, the executive director of the Industrial Council of Nearwest Chicago, wrote in Crain’s Chicago Business last week.
His nonprofit runs Make City, a business incubator in the western section. The four buildings, which total 416K SF, are almost fully leased to a diverse collection of food/beverage, manufacturing, professional services and apparel companies.
“The city’s plan to modernize the PMD will introduce certainty back into the market and encourage people to once again make business decisions based on fundamental business assumptions, and not on real estate speculation,” DeBretto added.
EXECS
Jerry Weber joined Morgan / Harbour Construction as project executive in its Willowbrook, Illinois, headquarters office. The Bradley University graduate worked at Morgan / Harbour as a project manager in the early 2000s. He was previously a vice president for Madison Construction in Orland Park, Illinois.
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Lendlease promoted Theodore T. Weldon III from senior vice president of development to executive general manager of development for Chicago. Weldon previously reported to Tom Weeks, who accepted another position in New York City and will leave the company at the end of the month. Weldon will manage Lendlease’s pipeline of Chicago projects, including Southbank, a 7-acre neighborhood development along the South Branch of the Chicago River, as well as 845 West Madison, a two-tower mixed-use development in the West Loop.
Later this month, Lendlease will break ground on two of three planned residential towers in the Lakeshore East neighborhood: Cirrus, a 47-story, 363-unit condominium tower, and Cascade, a 37-story, 503-unit rental tower.
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Avison Young hired industry veteran Steven Kohn as a Rosemont, Illinois-based principal with the firm’s industrial real estate brokerage practice in Cook County and other markets across Chicagoland. He will specialize in property transactions, including lease negotiations, landlord and tenant representation, acquisitions and dispositions. Most recently, Kohn was an executive vice president with Colliers International.
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HSA Commercial Real Estate promoted Claudette Zoch to regional property manager. Zoch will oversee the firm’s Wisconsin portfolio, which includes more than 2.6M SF of industrial, healthcare, retail and mixed-use properties.
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33 Realty named Sean Connelly as a new principal. A multifamily expert, Connelly joined 33 in 2014 as managing director of investment brokerage, and the investment brokerage team completed more than $100M in sales each year over the past three years, according to company officials.
Connelly’s notable deals include the sale of the 79-unit, 932 Pleasant Street in suburban Oak Park, for $15.2M, and the $38M sale of the Iroquois Club apartment complex in Naperville.
SALES
Greenstone Partners sold 2950 North Oakley Ave., a 42K SF urban infill industrial property in Chicago’s North Center neighborhood, that sits on 100K SF of land fronting the Chicago River. Vosges Haut-Chocolat has a triple net lease for the site. Greenstone officials said Vosges’ below market rent, along with the property's 2.3 acres, gives any owner several potential options to increase value. Greg Dietz and Danny Spitz of Greenstone represented the seller, a Chicago-based partnership, while Greenstone’s Jason St. John procured the family office buyer.
LEASES
PanCor Construction & Development signed 15 new leases and renewals for a total of 78K SF at its Randall Point Executive Center, a 60-acre office campus at the full interchange of Interstate 90 and Randall Road, in northwest suburban Elgin. Mark Smith and Dan Graham of CBRE represented PanCor in the transactions.
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Colliers International | Chicago’s Sven Sykes, Tom Volini and Brent Jacob represented TransNational Payments Inc. in its 26K SF lease at Pointe O’Hare I, 9550 West Higgins Road in suburban Rosemont. The credit card processing services company had been subleasing space at the building for several years.
FINANCING
JLL arranged a $61M refinancing for Hyatt House Fulton Market, a 200-room, newly constructed hotel at 105 North May St. in Chicago’s Fulton Market District. The firm worked on behalf of the borrower, a partnership between Sterling Bay and Wheelock Street Capital, to place the five-year, floating-rate loan with Argentic Real Estate Investments. The partners will use the proceeds to retire the construction loan. JLL’s Timothy Joyce, Steven Klein and Nicole Aguiar led the team representing the borrowers.
CONSTRUCTION AND DEVELOPMENT
The Opus Group completed Ellison Apartments, a 113-unit multifamily market rate development located at 1555 Ellinwood in suburban Des Plaines near O’Hare International Airport. The joint venture with Berkshire Residential Investments is downtown Des Plaines’ first new luxury apartment building in several years, Opus officials said. Opus was the developer, design-builder and structural engineer of record. ESG Architects was the design architect.
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Skender broke ground on a 42K SF supportive housing facility in Chicago’s Uptown neighborhood for Sarah’s Circle. This nonprofit serves homeless women, along with survivors of domestic violence or trauma, and provides food, clothing, housing and clinical services. Located at the intersection of Sheridan and Leland, the six-story steel and precast building will include a basement, 38 units for long-term housing, and emergency overnight space for 50 nonpermanent beds. Skender is collaborating with design firm Perkins and Will and owner’s representative Brinshore Development to complete the project in 14 months.
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PREMIER Design + Build Group completed a new building for Midwest Warehouse & Distribution System at 21157 Walter Strawn Drive in Elwood, Illinois, about 55 miles southwest of Chicago. Built on a 24-acre site, and constructed primarily of precast concrete panels and steel, the new 407K SF structure features 36-foot clear height ceilings. PREMIER’s Bill Malarski served as project manager, and Scott Lebak was superintendent. Cornerstone Architects provided the architectural design, Manhard Consulting did the site engineering, and Structures Unlimited handled structural engineering.
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Krusinski Construction Co. broke ground for Yamazen Inc.’s new headquarters located at 111 Northwest Point Boulevard, in northwest suburban Elk Grove Village. Yamazen, a machine tool distributor and a subsidiary of Yamazen Corp. Japan, will relocate its current Schaumburg-based operations and staff to its new two-story, 138K SF headquarters when it is substantially complete in summer 2020. The project team consists of: Krusinski Construction Co. as general contractors; Ketone Partners as owner representative; Cornerstone Architects as architect; and V3 Cos. as civil engineer.
THIS AND THAT
Despite strong demand, apartment completions nationwide slowed down in 2019, and the Chicago region followed that trend, according to RENTCafé, which just published a study, using Yardi Matrix data, on the numbers of new deliveries in 134 metro areas. Developers in the Chicago area completed about 8,100 new apartments in 2018, and expect to deliver 6,975 this year, a nearly 14% decline. The region will rank 11th on RENTCafé’s list of Top 20 U.S. metros for apartment deliveries, and with 4,465 deliveries, Chicago will rank sixth among the nation’s cities.
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The Zumper Chicago Metro Area Report analyzed active listings in August across 15 cities, and found Downers Grove was the most expensive with one-bedrooms priced at a median of $1,630. Chicago rents dropped 1.4% last month to $1,450, and the city was ranked the second priciest. Wheaton came in third with rent priced at $1,300. Joliet ranked as the most affordable city with one-bedrooms priced at $750, and Elgin had the fastest-growing rent, up 15.5% since this time last year.
