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Condos gain downtown, but apartments still reign
Crain's Chicago Business, Dennis Rodkin, 8/12/14
"... said Gail Lissner, a vice president of Chicago-based Appraisal Research Counselors."
If apartment builders are the speedy rabbit racing out ahead to build thousands of downtown units in the next few years, condominium developers are the tortoise, moving ahead at a deliberate pace. “It's slow and steady,” said Gail Lissner, a vice president of Chicago-based consulting firm Appraisal Research Counselors. “But at least it's moving.” Just a few years ago the turtle had withdrawn into its shell, overwhelmed by a backlog of 6,000 unsold condos left over from the boom years. But with unsold condo and town home inventory slimmed down to 397 units by mid-2014 and demand for both types of for-sale housing returning, “it's not such a one-sided market anymore,” Ms. Lissner said. “It's not all rentals” being built. Rentals are still the leader by far, with at least 4,700 new apartments expected to be completed in 2014 and 2015 in the greater downtown, compared to just 381 condos and townhomes, according to Appraisal Research....
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Gold Coast apartment tower sells for $80.5 million
Crain's Chicago Business, Ryan Ori, 8/1/14
"... according to Appraisal Research Counselors."
Amid the city's apartment development boom, a venture of Golub & Co. and USAA Real Estate Co. paid $80.5 million for a 1980s tower in the Gold Coast that it plans to spruce up. The venture bought the 30-story Chestnut Place tower at 850 N. State St. last week, paying $287,500 per unit, according to Cook County records. In their first deal together, Chicago-based Golub and San Antonio-based USAA plan to spend about $5 million to upgrade the 280-unit tower's apartments, common areas and retail, said Golub President and CEO Michael Newman. The tower is at State and Chestnut streets, near Loyola University Chicago's downtown campus and across the street from a 35-story apartment tower Chicago-based Newcastle Ltd. is constructing at 845 N. State St. That is part of a wave of about 6,800 rental units expected to hit the market this year and in 2015, according to Chicago-based Appraisal Research Counselors....
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A 'holy cow' price: Gold Coast site fetches $70 million
Crain's Chicago Business, Alby Gallun, 7/16/14
"... said Gail Lissner, vice president at Appraisal Research Counselors..."
As if he weren't busy enough, Chicago developer Jim Letchinger is drawing up plans for an ultra-luxury condominium tower in the heart of the Gold Coast. A venture led by Mr. Letchinger has agreed to pay about $70 million for a parcel at the southwest corner of State and Walton Streets, according to people familiar with the transaction. The hefty price — about $4,075 per square foot for the 17,180-square-foot parcel — reflects Mr. Letchinger's faith in the high-end condo market and represents another major step in its recovery from the crash....
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Look for empty River North warehouse to become Chicago's latest luxury condos
Crain's Chicago Business, Micah Maidenberg, 7/10/14
"... according to a report from Appraisal Research Counselors."
About nine months after buying an empty former warehouse in River North, Marc Realty Residential LLC plans to sell it to a developer that may convert it into condominiums. A trust associated Chicago-based Marc will sell the five-story building at 678 N. Kingsbury St. to LG Development Group, one person familiar with the deal said. Chicago-based LG is considering transforming it into 39 luxury condominiums, according to comments that a principal at the company, Brian Goldberg, recently posted on the website Everyblock.com. The former warehouse has long been eyed for condos, and LG's potential resurrection of a for-sale development there is another example of how the downtown condominium market is swinging back to life after its long post-crash hibernation. While apartments remain residential developers' asset of choice, low supply and robust demand is nudging builders to consider condos once again. Developers had 505 unsold condos on hand at downtown projects at the end of the first quarter, vs. 1,649 at the end of 2011 and 3,694 at the end of 2009, according to a report from Chicago-based consultancy Appraisal Research Counselors,...
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Here come another 959 apartments downtown
Crain's Chicago Business, Alby Gallun, 7/8/14
"... according to Appraisal Research Counselors."
Two more downtown apartment developments have moved from the “proposed” column to “under construction” after landing big loans. In the South Loop, a joint venture between Chicago-based JDL Development Corp. and iStar Financial Inc. of New York secured a $79.7 million construction loan for a 28-story, 469-unit high-end apartment tower at 1000 S. Clark St. The venture has begun preparing the site for construction and is awaiting a foundation permit from the city, said...
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After fall of Cabrini towers, 240 apartments going up across the street
Crain's Chicago Business, Micah Maidenberg, 7/7/14
"... according to Appraisal Research Counselors."
A West Coast real estate developer is digging deeper into the Chicago apartment boom, reeling in a $45.3 million loan to build a tower south of the new Target Corp. store on Division Street. A venture of Portland, Oregon-based Gerding Edlen Development Inc. took out the construction loan late last month from Pittsburgh-based PNC Bank N.A., according to Cook County property records. The firm plans to build the 240-unit tower at 625 W. Division St. Gerding's project comes amid an apartment construction boom that shows little sign of slowing down, raising fears of a glut. Developers are expected to finish more than 6,300 new apartments downtown this year and next, according to Chicago consultancy Appraisal Research Counselors....
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What Millennium Park did for condo developers
Crain's Chicago Business, Dennis Rodkin, 7/3/14
"... according to Gail Lissner, vice president of Appraisal Research Counselors."
In the early 2000s, when the city was building Millennium Park, condominium developer Jim Hanson underestimated its impact on the 57-story tower his firm was building a block away. Views of the park would be nice, “but we thought it wouldn't be that much different from looking west, at one of the most beautiful skylines in the world, and the sunset,” said Mr. Hanson, principal of Chicago-based Mesa Development LLC. As it turned out, buyers were willing to pay up for park views in the 356-unit building, called the Heritage at Millennium Park. By the time the building sold out in 2005, condos with park views were selling for 25 to 30 percent more than those looking west. “I had no idea that the Millennium Park effect was going to be so dramatic,” Mr. Hanson said....
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Appeals court upholds $36 million judgment against water district
Crain's Chicago Business, Micah Maidenberg, 6/11/14
"... according to a report from Appraisal Research Counselors."
The Metropolitan Water Reclamation District of Greater Chicago failed to persuade the Illinois Appellate Court to take its side in a long-running dispute with the developer of the Ritz-Carlton Residences, putting Cook County taxpayers on the hook for $35.8 million. In a ruling June 9, the court unanimously upheld a judgment that a venture of Chicago-based Prism Development Co. won against the water agency last year in Cook County Circuit Court. “We're obviously pleased with the result and we certainly hope this brings the matter to an end,” said David Gustman, partner and head of the litigation practice group at Chicagobased Freeborn & Peters LLP who represented the Prism venture. Jon Rodgers, a principal at the development firm, declined to comment. The ruling is the latest turn in a nasty legal fight now in its eighth year. The primary issue in the dispute concerns an alley between the 89-unit Ritz tower, 664 N. Michigan Ave., and the water district headquarters, 100 E. Erie St., just west of the high-rise....
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Lincoln Park condo project slated to start
Crain's Chicago Business, David Lee Matthews, 6/3/14
"... said Gail Lissner, vice president of Appraisal Research Counselors...
Sandz Development Co. thinks the time is right to sell condominiums at the former Lincoln Park Hospital. This summer a venture led by the Chicago-based developer will start marketing the final — and biggest — phase of the 600,000-square-foot Webster Square project at Lincoln and Webster avenues, aiming to capitalize on resurgent condo demand and lack of competition from other builders in the wealthy neighborhood. Sandz already has converted two former hospital buildings into apartments and a grocery store. Now, they plan to covert a 12-story brick structure on the campus into about 100 condos. It would be the largest condo project conceived since the crash in Lincoln Park, a traditionally strong housing market where big sites rarely come available to developers. “This is the natural progression,” said Sandz partner David Goldman. “It's been a nice milestone for us and it's got us feeling good about the overall program at Webster Square.” The Sandz venture took control of the hospital site at 550 W. Webster Ave. in 2009 and started leasing apartments there this yearafter a lengthyzoning fight with neighbors....
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Slow, steady growth drives suburban apartment rents to another high
Crain's Chicago Business, Alby Gallun, 6/2/14
"... said Appraisal Research Vice President Ron DeVries."
The suburban apartment market keeps marching higher, one small step at a time. The median suburban net rent rose to a record $1.24 per square foot in the first quarter, up about 1 percent from the fourth quarter and 2.6 percent from a year earlier, according to a report from Appraisal Research Counselors, a Chicago-based consulting firm. The suburban occupancy rate was 95.4 percent, up from 95.1 percent in both the fourth and first quarter of 2013. Slow and steady works for suburban landlords, who have been gradually hiking rents since the market bottomed out five years ago and are having few problems filling their buildings. “It's kind of like golf — hitting the ball down the middle of the fairway can be boring, but that's how you tend to score well,” said Appraisal Research Vice President Ron DeVries....
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Conlon plans 40 condos near Cabrini-Green
Crain's Chicago Business, Micah Maidenberg, 5/30/14
"... according to a recent report from Appraisal Research Counselors."
Real estate developer Sean Conlon plans a 40-unit condominium project near the Cabrini-Green housing development, joining a small wave of real estate firms trying to kick off new condo buildings downtown. A venture of Conlon & Co. wants to develop the building on a property at 873 N. Sedgwick St. owned by the Archdiocese of Chicago, a couple blocks north of Chicago Avenue, confirmed Benjamin “Benjie” Burford, CEO of the Chicago-based company. He said there's a shortage of new condos in downtown Chicago and likes the site's location near tech jobs and the busy River North neighborhood....
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Onni's Chicago deals keep Vancouver native busy
Crain's Chicago Business, Micah Maidenberg, 5/29/14
"... according to Appraisal Research Counselors."
Kevin Carpenter got his start in real estate as investors in Hong Kong were pouring money into properties in his native Vancouver, British Columbia. Now he's the one hunting for deals in foreign lands — Chicago among them. Mr. Carpenter, 47, works as senior vice president of acquisitions for Onni Group of Cos., a position he's held for 11 years. Perhaps best known in Canada as a condominium developer, the Vancouver-based real estate firm has bought a Loop office tower here and is accumulating downtown development sites, betting the residential boom has room to run. “Quite often our deals are more asset-specific than they are city-specific,” said Mr. Carpenter, who's based in Vancouver. “If it's a major metropolitan city and it's in a core location, generally we would have an interest in the property if there's an opportunity to add value to it.” A relative newcomer to the United States, Onni started looking for commercial real estate deals in the country in 2008 and made its first investment two years later, when it began buying apartments in Phoenix. In 2012, Onni paid $101 million for the 30-story office tower at 200 N. LaSalle St. Later that year, it paid $17.8 million for two residential development sites in River North. Next month, the company will acquire Atrium Village, a 309-unit apartment complex at the southwest corner of Division and Wells streets, where it could build 1,500 new residential units....
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Is downtown Chicago running out of condos?
Crain's Chicago Business, David Lee Matthews, 5/27/14
"... said Appraisal Research Vice President Gail Lissner."
Amid rising demand and falling supply, the downtown condominium market has reached a turning point. The downtown market has gone from glut to shortage over the past year or so, as projects started before the crash have sold out and construction of new high-rises has yet to pick up to meet increasing demand. With so few new condos for sale downtown, developers actually sold fewer units in the first quarter than they did a year earlier or in first-quarter 2012, according to a report from Appraisal Research Counselors, a Chicago-based consulting firm....
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New York investor to buy Wheaton apartments
Crain's Chicago Business, Alby Gallun, 5/21/14
"... said Appraisal Research Vice President Ron DeVries."
A New York investment firm is buying a 758-unit apartment complex in Wheaton, the largest suburban multifamily property to change hands in nearly eight years. Edge Principal Advisors LLC is acquiring Wheaton Center Apartments in the west suburb's downtown from a venture led by Stamford, Conn.-based GE Asset Management, according to people familiar with the transaction. Edge's only other apartment property in the Chicago area is also in Wheaton: the 295-unit Retreat at Danada Farms. Apartment sales — and prices — have jumped the past few years, fueled by low interest rates and rising occupancies and rents. Investors spent $1.05 billion on apartments in suburban Chicago last year, the biggest annual figure since 2007, when sales totaled $1.17 billion, according to a report by Appraisal Research Counselors, a Chicago-based consulting firm....
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Downtown apartment market 'on fire' in first quarter
Crain's Chicago Business, Alby Gallun, 5/19/14
"... said Appraisal Research Vice President Ron DeVries."
Downtown landlords worried about a potential apartment glut can breathe easier, at least for a little while. Demand for apartments surged in the first quarter, boosting rents and occupancies at high-end downtown buildings after worrisome declines in the previous two quarters, according to a report from Appraisal Research Counselors, a Chicago-based consulting firm. The report suggests that the downtown market so far is holding up amid the biggest apartment building boom in decades. Effective rents at top-tier Class A buildings rose to a record high of $2.70 per square foot, up 7.6 percent from fourth-quarter 2013 and 2.7 percent from a year earlier, according to the report. Effective rents include the impact of concessions such as free rent. “The market was on fire,” said Appraisal Research Vice President Ron DeVries. “It was pretty spectacular.” The downtown Class A occupancy rate rose to 95.1 percent in the first quarter, up from 92.6 percent in the fourth quarter but down from 95.3 percent a year earlier. The most stunning statistic was net absorption, or the change in the number of leased apartments in the quarter. Net absorption totaled 1,013 units, the biggest quarterly figure since at least 2011, according to Appraisal Research....
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Related Midwest recruits Robert Stern to design next tower By Alby
Crain's Chicago Business, Alby Gallun, 5/7/14
"... said Gail Lissner, vice-president at Appraisal Research Counselors..."
Related Midwest LLC has looked beyond Chicago for the designer of its next downtown development, picking renowned New York architect Robert A.M. Stern to draw up plans for a residential tower in Streeterville, his largest commission here by far. Chicago-based Related Midwest is getting ready to submit plans with the city for a Stern-designed high-rise at the southwest corner of Peshtigo Court and Grand Avenue, according to people familiar with the project. It's unclear what the developer plans to build on the site — which sits just west of a new Related Midwest apartment building — but it has considered a tower that would include both apartments and condominiums, according to the people. Mr. Stern, 74, who founded Robert A.M. Stern Architects LLP in 1969, is one of the most prominent U.S. post-war architects, a postmodernist pioneer who is known for looking to the past for inspiration. He has served as the dean of the Yale School of Architecture since 1998, written several books on architecture and designed everything from high-end homes to Walt Disney World hotels....
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DLA to face off with developer in malpractice case
Crain's Chicago Business, David Lee Matthews, 5/6/14
"... according to Appraisal Research Counselors."
The owner of a Loop apartment tower is heading to trial against DLA Piper U.S. LLP, blaming the law firm for the loss of more than $18 million after a dispute with the project's general contractor. A venture led by Farmington Hills, Mich.-based Village Green Cos. accuses DLA Piper of legal malpractice, including six conflicts of interest as it represented the developer in a legal fight with Chicago-based Walsh Construction Co., also a client of the law firm, according to a complaint filed in Cook County Circuit Court. The Village Green venture hired DLA Piper – the nation's largest law firm last year by revenue – in 2003 to negotiate a construction contract with Walsh as it began converting a 24-story vintage office building at 63 E. Lake St. to 190 apartments. The developer and contractor parted ways after delays at the project, MDA City Apartments, with Village Green blaming Walsh for missing deadlines and other problems, and Walsh accusing the developer of not paying its bills. An arbitrator ruled in Walsh's favor in 2007, awarding the contractor more than $8 million. DLA represented Village Green in the arbitration, but a judge dismissed DLA six weeks before the arbitrator's final ruling, saying the law firm had a conflict of interest because it had performed prior work for Walsh. That left the developer with little time to bring a new law firm up to speed on the case, one reason Walsh won its $8 million award, according to the lawsuit. But the financial hit added up to more than $18 million because Village Green had been seeking $9 million against Walsh and had to pay its new law firm $1.2 million, the lawsuit says....
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San Francisco investor pays $47 million for Schaumburg apartments
Crain's Chicago Business, Alby Gallun, 4/23/14
"... according to Appraisal Research Counselors."
San Francisco apartment investor Morton Friedkin keeps coming back for more in the Chicago suburbs. An affiliate of Friedkin Realty Group paid $46.6 million, or about $118,000 a unit, for Fieldpointe of Schaumburg, a 396-unit apartment complex in northwest suburban Schaumburg, according to Cook County property records. With the acquisition, Friedkin owns 10 properties with 3,441 units in the Chicago suburbs, most of them acquired in the past three years. The suburbs have been popular for apartment investors, attracted by the area's steady, if unspectacular, rent growth: The median net suburban rent rose 3.6 percent last year, according to Chicago-based consulting firm Appraisal Research Counselors....
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Related pockets big sum in $175 million apartment refinancing
Crain's Chicago Business, Alby Gallun, 4/16/14
"... said Appraisal Research Vice President Ron DeVries."
Less than a year after completing its 500-unit apartment tower on Lake Shore Drive, developer Related Midwest LLC and its partner have gotten their original investment back and then some. And they didn't even have to sell the building. A venture led by Chicago-based Related Midwest refinanced the new 45-story highrise at 500 N. Lake Shore Drive with a $175 million loan from Massachusetts Mutual Life Insurance Co., according to Cook County property records. The new debt allows Related Midwest and its partner, the AFL-CIO Building Investment Trust, to pay off a $100 million construction loan and pocket about $75 million at the same time. The deal represents a hefty return for the venture, which invested $57 million in equity in the project back in September 2011. The big payout highlights the rewards awaiting apartment developers who started downtown projects a few years ago. Rising rents and property values have created a compelling cash-out opportunity for many landlords, whether it's by selling out or refinancing. Because apartment buildings are worth more than they were a few years ago, developers can borrow more against them and just pocket the difference between the new loan and the old one. Yet it's unclear whether the opportunity can get any better given a development boom — downtown Chicago could get more 6,000 new apartments in 2014 and 2015 — that is already depressing rents at the high end of the market. Class A downtown apartment rents fell 2.7 percent last year, according to Chicago-based Appraisal Research Counselors....
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Why rents are rising on the North Side
Crain's Chicago Business, Alby Gallun, 4/14/14
"... according to Appraisal Research Counselors."
As more construction cranes sprout in downtown Chicago, they remain rarer in neighborhoods such as Lincoln Park and Lakeview. Stuart Handler likes it that way. With few apartment developments going up in North Side neighborhoods, landlords like Mr. Handler have more freedom to raise rents than do owners of downtown high-rises, which are starting to feel the impact of a major construction boom that shows few signs of ebbing. For all the ebullience about the downtown renaissance, Mr. Handler is happy most of his buildings are elsewhere. “I stayed away from those areas” in downtown Chicago, says Mr. Handler, CEO of Chicago-based TLC Management Co., which owns 35 buildings from Evanston to South Shore. “I didn't want to battle it out with new high-rises.” ...
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K2 apartment tower developers mull sale
Crain's Chicago Business, Micah Maidenberg, 4/8/14
"... according to a recent report from Appraisal Research Counselors."
The development group that built the K2 apartment tower hired a brokerage as it mulls a potential sale of the 34-story building. A group led by Fifield Cos. hired Chicago-based Moran & Co. to help it decide what to do with the 496-unit tower at 365 N. Halsted St., according to a person familiar with the building. The potential sale of K2 would test investor appetite for new rental buildings going up as part of a wave of development across downtown. Builders are expected to deliver more than 6,000 new units downtown this year and next, generating worries in some quarters about a glut. Yet recent new-construction rental building sales have priced out well. Last summer, an affiliate of Chicago real estate investment firm Heitman LLC paid $156.9 million for the 250-unit building at 1225 N. Wells St. in Old Town, or nearly $628,000 a unit. That sale also included about 33,000 square feet of retail space, inflating the per-unit value. Last summer, when it was just half occupied, K2 was appraised at about $200 million, or $403,000 a unit. Now, tenants have leased 70 percent of the building, according to a recent report from Chicago consultancy Appraisal Research Counselors. Effective rents at K2 were $2.91 per square foot, according to the report, the ninth-highest rate downtown...
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Developer pitches residential building in West Town
Crain's Chicago Business, Micah Maidenberg, 4/7/14
"... according to Appraisal Research Counselors."
Chicago real estate firm Akara Partners LLC wants to build a residential project in West Town, another example of how developers are looking for deals in Northwest Side neighborhoods close to downtown. An Akara venture proposes demolishing a one-story commercial structure at 822-834 N. Milwaukee Ave. and replacing it with a six-story building with 45 units and 3,156 square feet of retail space, according to plans the venture submitted to the city. While the plans do not specify what kind of residences Akara wants to build at the site., it's likely the firm will choose apartments, the development industry's preferred asset in recent years. According to the plans, Akara also may build fewer parking spaces than units, aiming to attract young renters who don't want to own cars. Known for its thriving restaurant and nightlife scenes, near Northwest Side neighborhoods are attracting a flock of companies looking to develop new apartment projects, especially near the CTA's Blue Line, which offers a relatively quick trip to offices in the Loop. Besides the 99-unit building at 1611 W. Division St., little in the way of new-construction units have been delivered in neighborhoods like Wicker Park or Bucktown of late, but more firms are trying to kick-start deals. Chicago-based LG Development Group, for example, pitched a 51-unit project near Milwaukee and North avenues, while Fifield Cos. is seeking support for a rental complex on Chicago Avenue, near Wood Street. In southeast Logan Square, local developer Spearhead Properties LLC wants to develop a 78-unit apartment complex near Armitage and Western avenues....
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Developers' mojo could bring down River North Hojo's
Crain's Chicago Business, Micah Maidenberg, 4/2/14
"... according to Appraisal Research Counselors..."
A development venture wants to tear down the Howard Johnson Inn in River North and build 298 residential units in its place. The venture between Chicago-based firms Mac Management Co. and Magellan Development Group LLC has submitted a zoning-change application with the city for the tower at 720 N. LaSalle St., which is being designed by bKL Architecture LLC. The application is expected to be introduced into the City Council at its meeting today. It's likely the Mac-Magellan venture will build apartments there, since the condominium market isn't considered strong enough to add nearly 300 units at once, pushing developers to focus on smaller for-sale deals. Apartments, meanwhile, have been the development industry's favored asset since the real estate crash. Builders are expected to deliver more than 6,000 new rental units downtown this year and next, according to Chicago-based consultancy Appraisal Research Counselors, raising concerns about a potential glut. Amid the supply surge, rents at top-tier buildings fell 2.7 percent last year, according to Appraisal Research....
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Wheeling apartment complex on the market
Crain's Chicago Business, 4/1/14
"... according to Appraisal Research Counselors..."
The owner of Woodland Creek, a 640-unit apartment complex in north suburban Wheeling, has put the property up for sale. The owner, a joint venture between New York-based J.P. Morgan Chase & Co. and Houston-based Finger Cos., has hired Moran & Co. to sell the property at 333 Wood Creek Road, according to marketing materials on Moran's website. The 52-acre property, which was developed in the 1980s and includes eight five-story buildings, is being offered without an asking price. It sold for $95 million, or about $148,000 a unit, in 2007, according to a report from Chicago-based Appraisal Research Counselors. Woodland Creek was 89.1 percent occupied at the end of 2013, with rents, including concessions, ranging from $1,163 to $1,946 a month, according to the report. Finger spent about $17,000 a unit, or $10.9 million, renovating the complex, including adding new kitchens, said Peter Evans, a partner at Moran, a Chicago-based brokerage. A buyer could boost the value of the property further by fixing up its leasing office and club house, he said. Offers are due April 16. Finger Chairman, President and CEO Marvy Finger declined to comment....
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Another apartment development brewing in West Loop
Crain's Chicago Business, Alby Gallun, 3/26/14
"...said Ron DeVries, vice president of Appraisal Research Counselors..."
With one West Loop apartment project winding down later this year, Focus Development Inc. and an Atlanta investor have found a site for their next one just a few blocks away. A joint venture including Northfield-based Focus, Atlanta-based Atlantic Realty Partners and Chicago developer Jeffrey Shapack paid $4.7 million for a pair of properties at the southwest corner of Lake and Halsted streets, according to Cook County records. The group plans a mixed-use project with apartments but isn't saying yet how big it will be. The development would be on the edge of the booming Fulton/Randolph corridor, an area receiving a lot of attention from developers and technology companies since Google Inc. decided to move its Chicago offices there. It's familiar turf for Focus and Atlantic, which are developing 104 apartments a few blocks southwest. They expect to wrap up the project at 922 W. Washington St., called Circa 922, in the fourth quarter, said Atlantic Realty President Richard Aaronson....
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Here's real proof that downtown doesn't need TIFs
Crain's Chicago Business, Joe Cahill, 3/19/14
"...says Gail Lissner, vice president at Appraisal Research Counselors..."
At first glance, there's nothing surprising about the surge in development on Michigan Avenue between Wacker Drive and Millennium Park. After all, the stretch forms a nexus between downtown office towers, Mag Mile shopping and a glittering tourist attraction. And it's got plenty of drab low-rise buildings ripe for redevelopment. It seems only natural that developers would grab sites for high-end hotels and apartment buildings, while restaurants pop up to serve nearby office workers, residents and tourists strolling Michigan Avenue. The surprise is what's missing: government subsidies through tax-increment financing or other breaks.You read that right — development is taking off without a dime of municipal support. That's noteworthy in downtown Chicago, most of which has been part of a TIF district at some point over the past couple of decades. Today, the LaSalle-Central Loop TIF covers a big chunk of downtown, while other TIFs encompass booming neighborhoods to the west, south and north....
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ProjectPerson.ProjectPersonTypeID IN (2,3,17,18,19)
Crain's Chicago Business, Micah Maidenberg, 3/18/14
"... according to Appraisal Research Counselors..."
The owner of Block 37 is forging ahead with ambitious plans to build more than 600 apartments atop the Loop shopping mall, hiring an architect and project manager for the development. Los Angeles-based CIM Group hired Chicago-based Golub & Co. to manage the project and Chicago architecture firm Solomon Cordwell Buenz & Associates Inc. to design the tower, according to a person familiar with CIM's plans. The development team is expected to share its plans for the 600-plusunit building at a March 20 meeting with Ald. Brendan Reilly (42nd), whose ward includes the development at State and Randolph streets, the person said. Crain's reported CIM's plans earlier this month. If built, the building would be the biggest apartment building in the Loop in at least a decade....
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Next at Block 37? An apartment tower
Crain's Chicago Business, Alby Gallun, 3/10/14
"... according to Appraisal Research Counselors..."
More than eight years after breaking ground on Block 37, construction crews could be returning soon to build hundreds of apartments atop the Loop shopping center. The owner of the mall across State Street from Macy's department store, Los Angeles-based CIM Group, is in advanced preparations for the next phase of the development, an apartment tower with more than 500 units, according to people familiar with CIM's plans. The project would mark an important milestone for Block 37, a development that was stuck in the planning process for so long that many people thought it would never get built—and then wound up in foreclosure after the real estate crash. It also would add momentum to the Loop's emergence as a residential neighborhood, fueled first by the condominium boom of the prior decade and now by a surge in apartment development. The number of condos, townhouses and apartments in the Loop has more than tripled since 1995 to more than 14,000 units, according to Appraisal Research Counselors, a Chicago-based consulting firm....
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Chicago investor buys 238 apartments in west suburbs
Crain's Chicago Business, Micah Maidenberg, 3/10/14
"... according to Appraisal Research Counselors..."
A Chicago apartment investor that has focused on buying distressed buildings in the city is taking another swing in the suburbs, paying nearly $13 million for 238 apartments in Glen Ellyn and Addison. Ventures of Windy City RE LLC paid about $6.9 million for the 120-unit Parkside complex at 16- 24 Parkside Ave. in Glen Ellyn and $5.8 million for 118 units in seven out of the 13 buildings at the Villa Brook Apartments at 107 S. Villa Ave. in Addison, said Milan Rubenstein, a Windy City principal. The firm plans to fix up the properties and raise rents. The suburbs offer “solid but unspectacular” returns for apartment investors, and the prices for the best suburban properties are increasing, said Scott Gould, vice president at Deerfieldbased Sherman Residential, which owns two multifamily properties here. That's drawing investors like Windy City to so-called value-add properties, which need renovation but can offer attractive returns due to the rent hikes that follow....
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Gold Coast apartment tower sells for $19 million
Crain's Chicago Business, Alby Gallun, 3/3/14
"... according to Appraisal Research Counselors..."
Village Green Cos., a Michigan apartment developer that owns three buildings in Chicago, added a fourth, paying nearly $19 million for a 21-story high-rise in the Gold Coast. Village Green said it acquired the 147-unit building at 860 N. DeWitt Place and plans a major renovation of the 1960s-era building, including a new lobby and fitness center and spruced-up kitchens and bathrooms in its apartments. The Farmington Hills, Mich.- based company acquired the building from a trust affiliated with Chicago-based real estate firm Supera Asset Management Inc....
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Suburban apartment landlords poised for more gains in 2014
Crain's Chicago Business, Alby Gallun, 3/3/14
"Appraisal Research Vice President Ron DeVries expects..."
The suburban apartment market is not too hot and not too cold — just right for many landlords who have full buildings and are hiking rents at steady pace. The median suburban net rent was $1.23 a square foot in the fourth quarter, flat with the third quarter but up 3.6 percent from a year earlier, according to a report from Appraisal Research Counselors, a Chicago-based consulting firm. It was the fourth straight year of rising rents. The suburban occupancy rate was 95.1 percent, down from 95.2 percent in the second quarter but up from 94.9 percent a year earlier....
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Buck scores $89 million loan to build Michigan Avenue apartment tower
Crain's Chicago Business, Ryan Ori, 2/28/14
"... according to Appraisal Research Counselors..."
A venture of John Buck Co. landed an $89 million construction loan to finance a 42- story apartment tower it plans to build just north of Millennium Park. The Chicago-based developer plans a 402-unit apartment building at 200-214 N. Michigan Ave. that will include 24,900 square feet of retail on the bottom two floors, said Buck Senior Vice President Rich DeLeo. Construction of the tower will begin by early in the second quarter with completion expected by early 2016, he said. The Buck venture obtained the loan on Feb. 24 from Cincinnati-based Fifth Third Bank, according to Cook County records. Buck's partners in the deal are Zug, Switzerland-based investment manager Partners Group A.G. and Grosse Pointe, Mich.-based Becker Ventures LLC, according to county records....
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From condo glut to developer strut
Crain's Chicago Business, Dennis Rodkin, 2/27/14
"...said Gail Lissner, vice president at Appraisal Research Counselors..."
Just a few years ago, a list of the downtown condominium buildings with the most unsold units was tantamount to pointing out which developers were struggling the most under the condo glut. This year, it looks more like a list of who stands to benefit the most from a rising market. The almost total shutdown of construction during the worst recessionary years means the supply of newly built condominiums has tapered to a point where “buyers who want new have almost no choices, so if you've got something, they're coming to you,” said Gail Lissner, vice president of Appraisal Research Counselors. “Having inventory to sell is definitely not a black eye this year.” For developers with a lot of unsold condos, the mood has shifted from dread a few years ago to ebullience today. Six downtown condo projects had 60 or more unsold units at the end of the year, according to a recent report by Chicago-based Appraisal Research....
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Fred Latsko wants to build 98 apartments in the Gold Coast
Crain's Chicago Business, Micah Maidenberg, 2/26/14
"... according to Appraisal Research Counselors..."
Fred Latsko wants to build as many as 98 apartments in the Gold Coast, adding to the swelling pipeline of downtown multifamily projects. Mr. Latsko, principal at Chicagobased Structure Management Midwest LLC, said he plans to add five floors to a four-story office building his firm owns at 1201 N. Clark St., creating enough space for 98 units. To the west, Fifield Cos. wants to build a 37-story, 413-unit rental building with an expanded Jewel- Osco grocery store....
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Trump to sign maker: You're hired!
Crain's Chicago Business, Micah Maidenberg and Ryan Ori, 2/21/14
"... according to Appraisal Research Counselors..."
Never one to shy from publicity, celebrity developer Donald Trump is set to stamp his name in 20-foot letters on Chicago's second-tallest skyscraper. Shiny, illuminated letters spelling “TRUMP” will be added “very shortly” to the south, riverfacing side of the 92-story Trump International Hotel & Tower, Mr. Trump confirmed today. The stainless-steel letters will be 20 feet tall — slightly less than half the size of the 45-foottall letters on the famous Hollywood sign — and will be back-lit with white LED lighting, according to the sign permit application approved by the city. Mr. Trump said workers will install them just below the 16th-floor terrace of the hotel and condominium tower at 401 N. Wabash Ave., which was completed in 2008....
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Chicago's condo comeback strongest in River North, Gold Coast
Crain's Chicago Business, Alby Gallun, 2/18/14
"...Appraisal Research Vice President Gail Lissner said."
The rising condominium market is lifting many downtown condo owners, but residents of River North are riding the highest. A recent survey of 65 large downtown condo buildings found that resale prices on a square-foot basis in the second half of 2013 were just 6.3 percent below their peak in 2008. Prices in River North came back the most, at just 5.1 percent below their 2007 peak, followed by the Gold Coast, where prices were 6.3 percent below their 2007 peak, according to the survey by Appraisal Research Counselors, a Chicago-based consulting firm....
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Building boom depresses downtown apartment rents
Crain's Chicago Business, Alby Gallun, 2/13/14
"...according to Ron DeVries, vice president at Appraisal Research Counselors..."
Rents at high-end downtown apartments slipped last year as demand failed to keep up with supply, an imbalance that could continue amid a building boom that shows few signs of abating. Net rents at Class A apartment buildings in downtown Chicago fell to $2.51 per square foot last year, down 2.7 percent from 2012, according to Ron DeVries, vice president at Appraisal Research Counselors, a Chicago-based consulting firm. Many landlords are losing their pricing power amid competition from new high-rises with luxury amenities and fancy finishes. The downtown market has weakened after three unusually strong years — Class A net rents rose 7.5 percent annually from 2009 to 2012 — powered by a shift in the housing market away from condominiums and into apartments. Many would-be buyers decided to rent, either because they were worried that condo prices would fall or because they couldn't get a mortgage. Developers responded by building new downtown rental towers, completing about 2,700 units in 2013, the most in one year since at least 1999, according to Appraisal Research. They will add more than 2,000 apartments this year and possibly more than 4,000 in 2015, according to the firm. New buildings on track to open this year include a 332-unit tower at 73 E. Lake St. and a 504-unit building at 111 W. Wacker Drive....
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West Loop apartments fetch $32.5 million
Crain's Chicago Business, Alby Gallun, 2/12/14
"...said Ron DeVries, vice president of Appraisal Research Counselors..."
A development venture that converted a West Loop warehouse into 74 high-end apartments sold the property for $32.5 million, another sign that investors are taking note of the neighborhood's renaissance. The joint venture between and Los Angeles-based Ares Management LLC and local investor Seth Martin sold 1313 Randolph Street lofts, a building at 1313 W. Randolph St., to an affiliate of J.P. Morgan Investment Management Inc. last month, Cook County property records show. The price is so high — about $439,000 a unit — partly because the building includes about 31,000 square feet of retail space, but it also reflects the increased investor demand for properties around West Randolph and Fulton streets. The neighborhood has become one of the hottest in the city, known best for its trendy restaurants but more recently as the future Chicago home of Google Inc. “After (the Google) announcement, we've seen a multiplier effect,” said Ron DeVries, vice president of Appraisal Research Counselors, a Chicago-based consulting firm. “Everybody's scrambling to stake out their space there.” The buyer, a unit of New York-based JP Morgan Chase & Co., the largest U.S. bank, also shows that the neighborhood is starting to attract the interest of big investors that normally don't stray too far beyond downtown Chicago or the safest suburbs....
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South Loop apartment tower goes up for sale
Crain's Chicago Business, Alby Gallun, 2/11/14
"... according to Appraisal Research Counselors..."
About four years after buying a 29-story apartment tower in the South Loop, a Texas investment firm is ready to cash out. Behringer Harvard Multifamily REIT I Inc. hired CBRE Inc. to sell Burnham Pointe, a 298-unit building at 730 S. Clark St. completed in 2008, according to CBRE marketing materials. The sale will test investor demand for downtown apartment buildings amid a construction boom that has fueled worries about a potential glut. Yet it is likely to generate a big gain for Behringer Harvard, a Dallas-based real estate investment trust that acquired the tower in mid-2010, when the real estate market was in the early stages of recovering from the crash of 2008-2009. Based on recent downtown apartment sales, Burnham Pointe is likely to fetch more than $400,000 a unit, or $119 million, said one apartment expert. That's 35 percent more than the $88 million Behringer Harvard paid for the property, a gain that stems from increased investor demand for apartments and higher income at the building due to rent and occupancy increases....
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After Gold Coast high-rise sale, could a condo conversion be in the offing?
Crain's Chicago Business, Alby Gallun, 2/5/14
"...said Ron DeVries, vice president of Appraisal Research Counselors..."
A Miami developer is buying 160 rental condominiums in a Gold Coast high-rise that was caught in the crash, another potential sign of the condo market's comeback. Crescent Heights Inc. is buying the condos in the Walton on the Park tower, at 2 W. Delaware St., and a development site next door, according to people familiar with the transaction. The developer is acquiring the properties from the Dart family of Michigan, which swooped in on them in 2011, just as their lenders were preparing to repossess them....
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Failed West Loop condo project to generate big profit for seller
Crain's Chicago Business, Alby Gallun, 1/29/14
"... according to Appraisal Research Counselors..."
An investor group that bought a failed West Loop condominium tower in 2010 is cashing out for a big gain, the latest in a series of lucrative sales involving distressed downtown condo developments. A joint venture of Naperville-based Marquette Cos. and Boston-based AEW Capital Management L.P. is selling Trio, a 22-story tower at 670 W. Wayman St., to Abacus Capital Group LLC, a New Yorkbased apartment investor, according to people familiar with the transaction. A sale price could not be determined but was estimated at about $40 million. Marquette and AEW took over the 100- unit condo tower and 21 units in an adjoining building in 2010 from its developer, Robert Mosky. The venture sold some of the 21 condos and rented out the tower, capitalizing on the strong apartment market. The apartments are 91 percent occupied, according to Appraisal Research Counselors, a Chicago-based real estate consulting firm....
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Developers forgetting lessons of the bubble
Crain's Chicago Business, Joe Cahill, 1/29/14
"... says Ron DeVries, vice president at Appraisal Research."
What is this, 2006? New hotels, apartment buildings and shopping centers are going up around Chicago faster than the market can absorb them. A few examples from the past week: Albert Friedman and White Lodging Services Corp. are on to another Gold Coast hotel project just seven months after completing their last one. William Smith of Smithfield Properties LLC is building a 295-unit apartment tower at LaSalle Street and Chicago Avenue, just half a mile from a 367-unit project by Newcastle Ltd. And new shopping-center construction is set to rise 16 percent this year. If only the rising tide of development were driven by surging demand for apartments, hotel rooms and stores. But it's not. Supply is losing touch with demand, just as it did in the mid-2000s and the late 1980s, to name the most recent outbreaks of a recurring real estate syndrome....
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Lender to unload failed suburban condo project
Crain's Chicago Business, David Lee Matthews, 1/7/14
"... according to Appraisal Research."
The hangover isn't over yet for lenders that financed failed boomera suburban condominium projects. Wintrust Financial Corp. hired broker ACO Commercial to sell 89 units in a so-called fractured condo conversion in north suburban Wildwood, according to marketing materials circulated by the broker. The Rosemont-based lender has positioned the Willows of Grayslake as a rental property, counting on demand from yield-hungry investors. The development was called Royal Oak Condominiums when an affiliate of the Inland Group Inc. converted the 180-unit apartment complex to condos. Records show the venture sold about half of the units, a mix of one- and two-bedroom condos sprawling over 17 acres, before defaulting on a $10 million loan issued in 2007 and a $8.7 million loan from 2010 by now-defunct First Chicago Bank & Trust. First Chicago failed in 2011 and its assets were assumed by Wintrust subsidiary Northbrook Bank & Trust....
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