With one condominium tower under construction in the Gold Coast, Chicago developer Jim Letchinger is taking the wraps off another one he wants to build in the West Loop.
A venture including Letchinger, president of JDL Development, has proposed a 94-unit building at the southeast corner of Jefferson and Fulton streets, between the Chicago River and the Kennedy Expressway. The venture will present its plans for the site at a June 21 community meeting, according to an email to constituents from downtown Ald. Brendan Reilly, 42nd, who will host the meeting.
Letchinger is adding the project toJDL's full pipeline of residential developments in the city. In the South Loop, JDL is leasing up a 469-unit apartment tower at 1000 S. Clark St., and he has another 251-unit rental building under construction in River North, on the former site of Ed Debevic's restaurant. In the Gold Coast, he's building a 66-unit luxury condo building at Walton and State streets.
Though the downtown condo market has come back from the bust, most residential developers these days are building apartments because the rental market has been so hot. Letchinger said he initially wanted to build apartments on the West Loop site but switched to condos at the suggestion of Ald. Reilly, who is concerned about the number of rental units being built in his ward.
Given the lack of new condos in the neighborhood, Letchinger thinks that's the right move. The West Loop has also become a popular destination for companies, including McDonald's, whichconfirmed today that it is moving its headquarters to a site about 10 blocks west.
“There's still very little condo product in the city, and it's a unique location surrounded by so much office, so many jobs,” he said.
Through a spokeswoman, Ald. Reilly declined to comment.
Letchinger said he expects the condos to start at about $800,000—the smallest units will be about 1,200 to 1,300 square feet—though penthouses in the project could be priced as high as $3 million. JDL would build the 27-story tower, which is being designed by Hartshorne Plunkard Architecture, on a parking lot just north of the building at 217 N. Jefferson St. A partnership including a Nebraska real estate firm that acquired the lot and building last year will be part of the JDL development venture, Letchinger said.
The venture needs a zoning change from the city for the proposed tower, and the community meeting is a key early step in that process. If Ald. Reilly signs off on the plan, it would still need the approval of the City Council. JDL also will need to obtain a construction loan. Letchinger is not sure yet what the project will cost.
JDL is one of the few downtown residential developers building condos these days. Developers completed just 191 condos and town homes in downtown Chicago in 2015 and are expected to complete 120 this year, according to Appraisal Research Counselors, a Chicago-based consulting firm. Before the condo market crashed, developers easily added more than 2,000 units to the downtown market every year.
The residential market has flipped over since then: After completing nearly 2,600 downtown apartments last year, developers are on pace to add 4,000 this year and 4,400 in 2017, according to Appraisal Research. Before 2008, they rarely built 1,000 units a year.
If an apartment glut is on the horizon, Letchinger isn't seeing it yet. Leasing began in March at his South Loop project, and the building is almost 50 percent leased—such a fast pace “I can't believe it,” he said.
Demand also has been strong for condos in Letchinger's Gold Coast project, some of the most expensive in the city, with an average price of $1,100 per square foot, according to Appraisal Research. He said buyers have signed contracts for 54 of the 66 units in the building, which he expects to complete in late 2017. JDL also is selling 153 condos in a building next door that have been rented out for the past several years.
“I don't think there's demand for thousands of condos, but for hundreds, yes,” he said.
Know more about the real estate advisor – Keith Knutsson:
No comments:
Post a Comment