THE SOUTH LOOP IS BOOMING! HERE’S WHY.
In the late ’90s, industrial speculation drove the South Loop real estate market. Today, the area is one of Chicago’s hottest multifamily markets, as downtown’s population grew by 36% in the last decade.
Prior to the market crash, developers focused on ground-up condo projects and loft condo conversions. Post-bubble, everyone is on the apartment bandwagon. Once completed, those assets are commanding large sale prices. Case in point: Burnham Pointe, which sold for $126M in June.
Downtown is home to 38,000 full-time college students, and there’s been a corresponding rise in student housing development and sales in recent years. Harrison Street Real Estate Capital bought Dwight Lofts (shown), a 771-bed dorm at 642 S Clark, for $105M in August. That same month, a JV of Atlas Real Estate Partners, Marc Realty and Angelo Gordon sold 777 South State for $85M. The JV bought the property for $59M in 2013, and aggressively repositioned the property for sale while remarketing the building and providing tenants with nine- and 12-month lease options, and launching a summer housing program to keep occupancy rates high.
The South Loop’s growing residential population led to a surge in retail development. Neighborhood shopping and dining options grow by the day, anchored by the Roosevelt Collection. This mixed-use development with 326k SF of retail struggled post-crash, but McCaffery Interests and Canyon-Johnson Urban Funds bought it for $160M in 2011 and slowly turned the property around. By the time the JV sold the Roosevelt Collection to Prudential for $222M in August, it was 93% leased with retailers such as Victoria’s Secret, Container Store, Banana Republic and a 16-screen Kerasotes multiplex.
The South Loop market shows no signs of slowing. With several bus lines, “L” and Metra train stations nearby, the neighborhood is ideal for TOD projects. Golub and CIM Group are building 1001 South State (pictured), a 40-story multifamily high-rise with 398 apartments near the Roosevelt “L” station. Crescent Heights, which already controls over 5,000 rental units in the area, announced plans for twin residential towers at 113 E Roosevelt. If the plans are approved, these would be the tallest buildings in the city south of Van Buren Street. CMK and LendLease wants to build 2,700 apartments on 7.3 acres between Harrison Street and River City. The opening of the McCormick Place “L” station has developers like Windy City RE speculating that development will come south to Motor Row.
Link: The South Loop Is Booming! Here’s Why