Regency Centers Corporation Breaks Ground on $50M First Phase of Shops on Main

By Gabriel Circiog, Associate Editor

Regency Centers Corporation has broken ground on the first phase of Shops on Main—a 147,851-square-foot community shopping center in Schererville, Ind. The shopping center is located at the intersection of two main arterial roads, U.S. Route 41 and Main Street, in the regional retail hub 25 miles southeast of Chicago. The first phase will cost $50 million, and some of anchors are scheduled to open in spring 2014.

“We appreciate the support of the town of Schererville, which is a proven retail market based upon historical sales,” said Nick Wibbenmeyer, vice president and regional officer for Regency Centers. “We’re excited to become an active member of the community by helping to create jobs. Shops on Main will reflect the key attributes that define a Regency center: market-leading anchors, prime location and enjoyable shopping environment.”

Anchored by leading fashion, footwear and home furnishing retailers, the center will include Gordmans (50,079 square feet), Ross Dress for Less (25,069 square feet), HomeGoods (23,969 square feet) and DSW Designer Shoe Warehouse (18,361 square feet).

In other local real estate news, The Chicago Tribune reports Cedar Street Co. has acquired a three-property industrial and retail portfolio in suburban Downers Grove. The portfolio was purchased for $16.2 million and includes Meadowbrook Shopping Center at 63rd & Woodward Downers Grove, University Plaza Mall at 1201-1213 Butterfield Rd., and 1400 Center Circle Drive.

The portfolio was purchased as part of the Qualteq Inc. bankruptcy case. University Plaza Mall and Meadowbrook Shopping Center will be placed on a long-term commercial mortgage-backed securities loan and primed for future development. On the other hand, 1400 Center Circle Drive has a triple net lease from a strong nationally recognized tenant positioned to secure long-term cash flow opportunities.

New $251M State-of-the-Art Malcolm X College Campus Plans Revealed

By Gabriel Circiog, Associate Editor

Mayor Rahm Emanuel and City Colleges of Chicago Chancellor Cheryl Hyman recently announced plans for the new Malcolm X College campus, a major investment in Chicago’s west side. The state-of-the-art learning facility aims to provide Chicago’s students access to the tools that will enable them to succeed in fast-growing fields, such as health sciences. The Chicago Sun-Times reports the $251 million Malcolm X College will also feature a 1,500 space parking garage.

“Providing our students with a cutting-edge education requires facilities that are up to the task. This investment in Malcolm X is critical to the success of our students in the healthcare careers of tomorrow,” said Mayor Emanuel. “And we are proud that this project will add to the vitality and economic development of the west side as a major investment in our communities.”

The investment is part of a five-year capital plan that supports City Colleges of Chicago’s College to Careers initiative and will create 950 construction jobs through 2016. CCC is also launching a community jobs program that designates up to 120 of the construction jobs for qualified applicants from the community around the new college.

In addition, CCC is also guaranteeing, through City Colleges’ Dawson Technical Institute of Kennedy-King College, 50 free slots in construction training programs for applicants without previous training who live in the communities surrounding the new campus. City Colleges has partnered with HACIA and the Chicago Urban League to recruit all applicants and work with union officials, ensuring minority and female participation in the project.

The nation’s largest African American-owned architectural firm, Moody Nolan, has been contracted by City Colleges to serve as the architect of record on the project. The firm’s Chicago office will be expanded from nine to 14 staff member and will become the largest African American-owned architectural firm in Chicago.

Located in the Eisenhower Corridor, the project is part of Mayor Emanuel’s Chicago Neighborhoods now initiative. The city is leveraging $330 million in public funding with $2.6 billion in private funding to facilitate new economic development and housing, improving the quality of life in seven sections of Chicago. The new college is expected to open in January 2016.

Rendering Courtesy of: www.ccc.edu

KBS REIT II and Hines Announce LEED Platinum Certification of 300 North LaSalle Office Tower

By Gabriel Circiog, Associate Editor

KBS REIT II and Hines recently announced that 300 North LaSalle in Chicago has been awarded Platinum certification under the U.S. Green Building Council’s LEED for Existing Buildings category. The tower had previously received a Gold certification under the LEED for Core & Shell Rating System. Developed by Hines, 300 North LaSalle was completed in 2009 and purchased by KBS REIT II in 2010. The company continues to manage the tower.

Located on the north bank of the Chicago River between the River North District and the Central Business District, the 57-story tower offers 200 feet of frontage along the river, including a large waterfront café and an outdoor plaza with seating. Standing tall at 775 feet, the 1.3 million-square-foot building is amongst the tallest buildings in Chicago.

The 57-story energy efficient office tower was designed by Pickard Chilton and features a façade clad in articulated glass and stainless steel that maximizes the introduction of daylight but also minimizes solar gain.

In order to achieve the goal of Platinum certification, green features including river-water intakes for denser water; a recycling program for paper, glass, aluminum and plastic; a green roof to reduce heat island effect; low-flow water fixtures across the building; and light switches with motion detectors had to be implemented at the property. Hines also offers its Green Office for Tenants program, which assists in giving tenants options to reduce their carbon footprint.

The office building is currently 99 percent leased, and major tenants include The Boston Consulting Group, GTCR, Kirkland & Ellis LLP and Quarles & Brady LLP.

“300 North LaSalle achieving LEED Platinum demonstrates our commitment to the environment, as well as our sustainability efforts to our tenants and community. This tower adds stature and prominence to Chicago’s great skyline while respecting our mission in sustainable design,” said Hines Vice President of Property Management Lance Knez.

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NY Developer Plans Boutique Gay-Friendly Hotel in Boystown

By Gabriel Circiog, Associate Editor

New York-based Parkview Developers LLC plans to open a gay-friendly hotel in the heart of Boystown. The approximately 112-room hotel would be located on the 3300 block of North Halsted Street and would be called Out Chicago, according to Ian Reisner, managing partner of the development firm.

ChicagoRealEstateDaily.com reports the new hotel would be modeled after the Out NYC, which opened just over a year ago in New York, and would include an enclosed atrium that would feature event space, a spa and gym, a rooftop bar, restaurant and retail space.

The scope of the project is to offer an environment where members of the lesbian, gay, bisexual and transgender community, as well as their friends and family, can feel at home when visiting Chicago. Mr. Reisner, for the same source, said the project was pitched to Alderman Tom Tunney last summer and that he now plans to deliberate with the community residents at a Triangle Neighbors Association meeting.

This information has been confirmed by John Becvar, vice president of the association, who posted an announcement of the proposal on the neighborhood association’s Facebook page: “There’s a proposal for a very large development on the 3300 N. block of Halsted to build ‘The Out Chicago’ that will include 100-plus hotel rooms. The developer is trying to rush this through and hasn’t attended Triangle meetings but is having a joint neighborhood meeting on Thursday, April 11th at 7PM at the 19th District Police Station Community Room. Everyone should definitely attend.”

Ian Reisner said his company is negotiating to acquire the land for the project across from Roscoe’s Tavern and that the firm could partner with Minibar for a bar concept in the hotel. The hotel, which would cater to members of the LGBT community, does not market itself as a gay hotel but more as a straight-friendly urban resort, with straight guests representing almost a third of the hotel business at the New York location.

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Illustration Courtesy of John Becvar via Facebook.

Loews Hotels & Resorts Breaks Ground on 400-room Hotel

By Gabriel Circiog, Associate Editor

Loews Hotels & Resorts recently held a groundbreaking ceremony on the site where it will open the Loews Chicago Hotel in 2015. Company officials, including Chairman Jonathan M. Tisch and President and CEO Paul Whetsell, were joined by Donald R. Wilson, Jr.— founder and CEO of DRW Trading Group—and Mayor of Chicago Rahm Emanuel at the ceremony.

“Even with Chicago’s hotel occupancy at a record high last year, companies continue to build more hotel stock as more and more tourists, business travelers and conventions are flocking to Chicago,” said Mayor Emanuel. “I am pleased to see this hotel rise from the ground, creating hundreds of jobs and setting up Chicago to continue its growth as one of the premiere destinations in the entire United States.”

Designed by the architectural firm Solomon Cordwell Buenz and developed by DRW, the Loews Chicago Hotel will be part of a 52-story tower that will also include 398 luxury residential apartments. The hotel will feature 400 guestrooms, including 36 suites. The new construction will also include a signature restaurant, over 25,000 square feet of meeting space, outdoor terraces, an outdoor rooftop including a swimming pool, and a spa/fitness center.

Donald R. Wilson, Jr. said: “We are excited to partner with Loews in designing and delivering a hotel and residential product. The apartment and hotel combination will be a benefit to one another, offering amenities to residents that set us apart from the current market.”

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Photo Courtesy of: Loews Hotels & Resorts via Facebook.

BEMT Invests in 24-Story Mixed-Use Luxury Rental Community

By Gabriel Circiog, Associate Editor

Bluerock Enhanced Multifamily Trust has recently announced its investment in MDA City Apartments, a mixed-use luxury rental community in downtown Chicago. The New York-based non-traded real estate investment trust has partnered with Village Green, the owner of the 24-story building. Village Green is an owner/operator with a portfolio of around 40,000 units in 13 states.

“MDA presented a unique, off-market opportunity to purchase an interest in a stable, well-occupied, core urban infill project in a primary market with a top partner,” said James Babb, Bluerock senior managing director and chief investment officer. “By recapitalizing and streamlining what had been a fairly complex capital structure, we were able to seize on a valuable opportunity at below-market cost.”

MDA City Apartments features 190 residential dwellings and 8,238 square feet of storefront retail space. The property was completed by designer Daniel Burnham Jr. in 1927 and underwent a major $45 million conversion in 2006. The historic Medical and Dental Arts Building was transformed into a Class A, LEED-certified mixed-use development.

Residents at MDA City Aparments have access to various amenities including a rooftop Sky Club, 24/7 concierge, business/conference center, fitness facility and free wireless internet in the common areas.

The property’s downtown Chicago submarket has seen vacancy rates fall since 2008 and, based on research from REIS, the rates are forecast to remain at the current level of 5 percent for the near-to-mid-term. Additionally, another important factor in BEMT’s decision to invest in MDA City Apartments was the submarket’s effective rents, which have been growing since 2010.

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Photo Courtesy of: www.villagegreen.com

Duke Realty Corporation Expands Portfolio in Chicago with Purchase of 288,000 SF Industrial Building

By Gabriel Circiog, Associate Editor

Duke Realty Corporation recently announced the acquisition of 335 W. Crossroads—a 288,000-square-foot industrial building in the I-55 submarket, which is Chicago’s second-largest industrial market. The real estate investment trust, which specializes in the ownership, management and development of bulk industrial facilities, also announced it has leased 190,080 square feet in the building to RTC Industries.

Located in Crossroads Business Park, the Class A industrial property increases Duke Realty’s industrial portfolio in the business park, where the REIT already owns 3.3 million square feet of industrial space in 10 fully leased buildings. The acquisition increases Duke Realty’s overall Chicago-area portfolio to over 10.6 million square feet and helps the REIT to meet the expansion needs of RTC, which also leases the 503,200-square-foot Crossroads V building.

“RTC has been an excellent tenant with solid growth since becoming a Duke Realty tenant,” said Steve Schnur, senior vice president of Duke Realty’s Chicago operations. “The acquisition of 335 W. Crossroads allows us to provide RTC with the additional space it needs and complements our strategy of increasing our investment in quality industrial buildings in strong distribution markets.”

The seller of 35 W. Crossroads Parkway was represented by Jeff Kapcheck with Colliers International. Bill Frain, Todd Lippmann and Jim Whalen with CBRE represented RTC Industries in their lease.

According to a recent report released by CBRE Global Research and Consulting, net absorption in the Chicago industrial market has increased to 16.9 million square feet compared to 2.4 million in 2010 and 15.7 million in 2011.

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Photo Courtesy of: www.dukerealty.com

Chart Courtesy of: CBRE Global Research and Consulting

ST Residential LLC Puts 326-unit Lex up for Sale

By Gabriel Circiog, Associate Editor

Chicago-based ST Residential LLC has hired brokers Holliday Fenoglio Fowler and Eastdil Secured to manage the sale of a 13-property portfolio with an estimated value of close to $1 billion. The multifamily properties, which were part of the failed Corus Bank condominium portfolio acquired by the venture, are located in Atlanta, Chicago, Houston, Las Vegas, Los Angeles, Phoenix, Stamford and Tampa.

ChicagoRealEstateDaily.com reports that the portfolio includes the Lex—a 326-unit condo-turned-apartment tower located in the South Loop at 2138 S. Indiana St. The 35-story tower was built by Chieftain Group Ltd., and by the time the project was completed in 2009, the condo boom had ended—leaving the developer with dozens of unsold units.

Chieftain was unable to pay off a construction loan to Corus Bank and relinquished the property to ST Residential LLC in 2011, which converted the high-rise to apartments. According to a report by Chicago-based consulting firm Appraisal Research Counselors quoted by the same source, the Lex was 75 percent leased at the end of the third quarter. ST Residential is a manager of properties owned by a public-private partnership between the FDIC and a group of leading U.S. private real estate investors.

Barry Sternlicht, chairman and CEO of Starwood Capital Group and chairman of ST Residential, said: “The Corus Bank transaction has performed extremely well for the FDIC and our private investor group. The partnership has repaid $1.3 billion of FDIC purchase money notes and has more than $1 billion of cash in hand. More than 32 loans were paid off at par, and we have sold 60 percent of the condo inventory we acquired at ever-escalating prices.”

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Photo Courtesy of: www.stresidential.com

Construction Begins on 45-Story West Loop Office Tower

By Veronica Grecu, Associate Editor

Chicago’s largest commercial real estate project in five years kicked off on January 15 in a $400 million joint venture between Canada-based Ivanhoé Cambridge—the real estate arm of Quebec pension fund manager Caisse de dépôt et placement du Québec, developer Hines of Houston and local business leader Larry Levy. An earlier report on the story by PERE News revealed that the Canadian real estate investment company secured 75 percent of the capital, while Hines covered the remaining $100 million.

The 45-story River Point tower is under development at 444 West Lake Street in the West Loop, Chicago’s financial district, on a parcel owned by Larry Levy. Designed by prominent architectural firm Pickard Chilton, the Class A office tower will include 900,000 square feet of leasable office space ready for delivery in 2016. According to a press release from Ivanhoé Cambridge, the building is pre-certified LEED Gold by the U.S. Green Building Council.

Additionally, the project includes a 1.5-acre public park that will be developed on top of the existing rail infrastructure to encourage pedestrian activity along the Chicago River.

“River Point will be a striking addition to Chicago’s skyline and the first in a new generation of office buildings.  There is significant interest from major corporate tenants,” said C. Kevin Shannahan, CEO of Hines’ Midwest and Southeast regions, at the groundbreaking ceremony.

According to Mayor Rahm Emanuel’s press office, the project will create around 1,000 construction jobs and house 3,400 permanent office jobs.

Two days after groundbreaking, River Point landed an anchor tenant, Crain’s Chicago Business reports. While developer Hine is still on the hunt for tenants, law firm McDermott Will & Emery LLP—the fifth-largest firm in Chicago—signed a letter of intent to lease 225,000 square feet of space in the tower. If the deal is closed, McDermott is expected to relocate its offices at 227 West Monroe St. in 2017, when its current lease expires.

Renderings of River Point via Pickard Chilton Architecture

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Closed Hotel to be Reintroduced to Market as Le Meridien Chicago at Oak Brook

By Veronica Grecu, Associate Editor

A shuttered Renaissance-branded hotel next to the Oakbrook Center mall in Chicago’s Oak Brook suburb will reopen in early 2014 under the Le Meridien banner. The announcement was made last week by Starwood Hotels & Resorts Worldwide Inc., who teamed up with real estate investment firm RockBridge Partners of Columbus, Ohio to transform the closed facility into an upscale hotel for both business and leisure travelers.

The 10-story Renaissance Hotel building (pictured) located at 2100 Spring Rd. was sold by General Growth Properties Inc. to RockBridge Partners for an undisclosed amount in October 2012. The property is undergoing a complex $20 million renovation that will culminate with a grand opening ceremony in January 2014.

“The comprehensive renovation and re-branding of the hotel, coupled with the strength of the Starwood system, will position Le Meridien Chicago–Oakbrook Center as the premier hotel in the market,” said Jim Merkel, president and CEO of RockBridge, as quoted in a press release by Starwood Hotels.

The hotel’s 172 guest rooms and suites will be completely refurbished and feature the signature Le Meridien Bed designed by artist Nick Dine, who is one of the members listed in Le Meridien’s “LM 100” list of design experts and consultants. A proprietary new bar and restaurant with meeting spaces will be created on the building’s ninth floor, and guests will have access to a state-of-the art fitness center and rooftop terrace.

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Image of former Renaissance Hotel via hotelsharbor.com