Month: November 2016

In entrepreneurship, inspiration can strike at any moment, even when you’re sleeping.

So imagine being able to wake up, run to the 3D printer, and create a working prototype in minutes–all from the comfort of your apartment building.

That’s the reality for tenants at 1001 South State, a 397-unit rental building in Chicago’s South Loop neighborhood that just opened in August. The new 40-story building has all your traditional apartment amenities–fitness center, media room, rooftop terrace–but with one high-tech upgrade: a makerspace.

The communal workspace gives residents access to a Nomad 833 Pro CNC milling machine and a Glowforge 3D Laser Printer, allowing entrepreneurs and tinkerers to make jewelry, widgets or other prototypes without leaving the building.

In addition to the maker equipment, the building also offers tech amenities like a co-working space with interactive whiteboard technology, SB ports in the kitchens and bedrooms, a game room and Wi-Fi in the common areas.

“Designed for those who love style and technology, 1001 South State … offers amenities unlike any others available in Chicago,” the building’s website reads.

1001 South State opened in late August with apartments available in studio, one, two and three-bedroom layouts. Developed by Golub & Company and CIM Group, the building also features a bike repair room, automated package and dry cleaning system, and a “living biowall,” a vertical garden that grows fresh herbs.

“1001 is destined to become the place for Chicago’s top innovators to live, work and collaborate,” Golub & Company President and CEO Michael Newman said in a statement when the building opened.

The idea, it seems, is to make 1001 South State a destination for startup and tech folks by providing access to tech equipment, and the chance to bump in to like-minded entrepreneurs in the hallways. A two-bedroom will cost you over $3,000, but hey, at least you don’t have to shell out for a 3D printer.

Link: The Next Hot Apartment Amenity? A Makerspace With 3D Printers

About two years after buying one Gold Coast apartment tower, Golub & Co. likes the neighborhood so much that it acquired another one across the street.

A joint venture between the Chicago-based developer and Alcion Ventures of Boston bought the 306-unit building at 1 E. Delaware Place from Waterton Associates. Golub aims to boost the property’s income by renovating and hiking rents, a strategy that has worked at Chestnut Place, a 30-story building it owns across the street, said Golub CEO Michael Newman.

“We feel like we have a bit of a handle on the location and the market,” Newman said.

He declined to say what the venture paid for One East Delaware, but people familiar with the property estimated it sold in the range of $145 million, or $474,000 a unit. Chicago-based Waterton paid just $91.3 million for the 37-story building in 2006, illustrating how far the downtown apartment market has come over the past decade.

Golub is betting big that the boom will continue. In addition to its two Gold Coast acquisitions, the developer recently completed two big downtown projects, a 396-unit tower in the South Loop and Moment, a 490-unit tower in Streeterville.

Demand for downtown apartments has been high, fueled by strong job growth and a preference among many city residents for renting over owning a condominium. Yet developers are building apartment towers at a record pace—they’re forecast to complete 8,800 units downtown this year and next—and tougher competition for renters will make it harder for landlords to fill their buildings.

The market still is strong, but it’s cooled a bit, Newman said. One result: More developers are relying on concessions to lease their buildings, he said.

“We’ve all been anticipating it,” Newman said. “We’re finding things are leasing. I think the pace is a little slower than it had been a couple years ago.”

He declined to say how many apartments Golub has leased in its two downtown developments. Moment, at 545 N. McClurg Court, was 20 percent leased in August, while the South Loop tower, at 1001 S. State St., was 25 percent leased, according to a report from Appraisal Research Counselors, a Chicago-based consulting firm.

One East Delaware, built in 1988, was 95.4 percent leased, according to the report. As an older building in an A-plus location, it’s considered a strong redevelopment candidate: People are willing to pay up to live in the Gold Coast, but they’ll pay only so much if a building doesn’t have high-end amenities and finishes.

Golub plans a “multimillion dollar” renovation that could include fixing up the building’s common areas, renovating its fitness center and adding new amenities like a fire pit and grills on its sixth-floor patio, Newman said.

“We would like to take it up to another level,” he said.

The firm also is considering a rehab of the building’s apartments, including adding new flooring, lighting, cabinetry and appliances. Golub is using the same playbook that worked at Chestnut Place: The average net rent in the building was $2.64 per square foot in the second quarter, up 16 percent from summer 2014, when Golub bought the property, according to Appraisal Research.

“We’ve been able to get the rents commensurate with what we’ve done,” Newman said.

The average net rent at One East Delaware was $3.10 per square foot in the second quarter, up 1 percent from a year earlier, according to the Appraisal Research report. Rents run from $1,695 a month for a studio to $2,975 for the most expensive two-bedroom unit, the report says.

Waterton, a Chicago-based apartment and hotel investor, sold the building because the Waterton fund that owns it is in its liquidation phase, said Mark Stern, the firm’s senior vice president of multifamily acquisitions. The property also includes retail space occupied by a Starbucks and Potash Market.

Link: Developer Doubles Down on Gold Coast Apartments