As it wraps up an extreme makeover of a drab apartment tower in the Illinois Medical District, a Naperville developer is getting ready to break ground on another big building next door.
Marquette is betting big on the future of the West Side neighborhood, moving forward with plans to develop nearly 700 apartments at Ogden and Harrison streets. In the project’s first phase, the developer has gutted an 18-story high-rise at 1926 W. Harrison and is transforming its façade with floor-to-ceiling windows. Called Atrio, the 272-unit building should open in May, said Marquette President and Chief Investment Officer Darren Sloniger.
In July, Sloniger expects to begin construction of the development’s next phase: a 24-story, 280-unit tower just west of Atrio, along Damen Avenue. Marquette also plans a third building rising nine stories and totaling 120 units just south of Atrio.
The Medical District and surrounding neighborhood has attracted major interest in recent years from real estate developers, wagering that demand for apartments, hotel rooms and commercial space will rise as the heath care sector expands. A redevelopment of the long-vacant old Cook County Hospital wrapped up last year, and a major mixed-use project called Gateway is in the works just west of Marquette’s site, though it has progressed slowly.
With Rush University Medical Center and the University of Illinois-Chicago nearby, Sloniger expects to rent to a lot of students and workers in the area. He also likes his project’s proximity to the Medical District CTA station, which could appeal to downtown commuters, and Malcolm X College, just north of the Eisenhower Expressway.
The market’s “got a lot of depth to it. There are a lot of demand drivers there,” he said. “People want to live there because they can walk to the el and walk to work.”
Many Chicago apartment landlords have suffered over the past year because of the coronavirus pandemic and recession, but demand has held up better the greater the distance from downtown. With vaccinations well underway and optimism about the economy on the rise, 2021 should be a better year for apartment owners.
Marquette is counting on that as it ramps up pre-leasing at Atrio. Asking rents in the building range from $771 per month for a studio to $3,260 for the most-expensive three-bedroom unit, according to real estate information provider CoStar Group. The average apartment rents for $1,835 per month, or $2.57 per square foot.
People who haven’t seen the tower since Marquette bought it might not recognize it anymore. Built in the 1960s, the high-rise had a Soviet-style look, with a dreary façade and small windows. Marquette didn’t change the building’s geometry, but its new glass-and-steel facade would fit in with the many Mies van der Rohe-designed buildings and their copycats in downtown Chicago.
Marquette paid $28 million for 1926 W. Harrison in 2019; Sloniger declined to say how much the redevelopment will cost. The firm is financing the project with a $37.8 million loan from Associated Bank.
“It was a building with a lot of deferred maintenance, and it was just really, really run-down,” Sloniger said. “It’s one of those projects that’s a lot of fricking work, but it’s very satisfying.”
Atrio’s amenities will include a big fitness center, study and work rooms on the ground floor and a penthouse lounge with views of downtown Chicago.
Marquette is in the final planning and approval stages for its next building, the 24-story tower next door, which is allowed under current city zoning. Marquette is teaming up on that project with its equity partner on Atrio, Los Angeles-based Kayne Anderson Capital Partners. The firms still need to secure a construction loan before breaking ground, Sloniger said.
Marquette also has its hands full in the West Loop, where it has completed, is developing or plans more than 1,000 apartments.
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March 03, 2021 at 01:39AM
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