CHICAGO-After delays, Structured Development LLC is expected to begin construction in January on its nearly one-million-sf mixed-use New City development. Construction on the project was originally planned to begin during the summer this year, but was held by changes to development plans, which reduced the number of residential units to be built. The development had originally planned to offer 490 residential units, a number which has been cut nearly in half in recent months in response to reduced demand for the space. New City is now being planned to include 280 rental units, 84 of which will be mixed-income units, as mandated by the city of Chicago in its approval of the project earlier this year.
The development has a targeted completion date of mid-2010 for the retail component and late-2010 for the residential portion. Once planned to be around $270 million, estimated project costs have been reduced to around $220 million to reflect the project changes. Chicago-based Structured, in partnership with Wilton, CT-based Commonfund Realty Inc., is developing the project on 8.5 acres at the corner of Halsted Street and Clybourn Avenue – the site of the former New City YMCA – in the North and Clybourn/Lincoln Park submarket.
“We originally envisioned condo uses, but housing market conditions shifted, so we reduced the number of units in total to 280,” Jeff Berta, senior director of real estate development with Structured, tells GlobeSt.com. “We also saw opportunities for hotel and theater entertainment uses, which we began to realize were a good fit with our location. We replaced some of those units with space for those commercial uses.”
The development will also include about 400,000 sf of retail space, 25% of which is now preleased. The company already has letters of intent from tenants for the remaining three-quarters of the space, Berta says. Milwaukee-based Roundy’s Supermarkets Inc., which has a signed a 15-year lease for 80,000 sf, will anchor the retail. The development will offer parking for 850 cars and a central 1-acre plaza.
Asking lease rates for the retail space are around $70 per sf on the ground level to $35 per sf on the second floor, triple net, Berta says. RKF Retail Property Advisors, based in New York City, and Chicago-based Mid-America Real Estate Group are the brokers for the development.
“Over the course of the last 10 to 15 years, many of the top national retailers have located there (in Chicago) and become top in their chains in terms of sales,” Berta says. “This arguably is one of the most desirable pieces of property in the country. It’s a great fit for a significant portion of retail, but also the residential uses.”
Structured is also responsible for the neighboring British School project, which contains the 75,000-sf, 600-student British School of Chicago, as well as 90,000 sf of retail and 70,000 sf of office. The retail is one-third leased, with a 30,000 REI store that just opened. The office is more than 70% leased to medical offices, 30,000 sf of which is already open.