Quaker Takes Last 78,000 SF at 555 W. Monroe

"This has happened on our last three deals," says Fifield, referring to Zurich Insurance Co. and AT&T taking entire suburban properties as well as Zurich leasing at 550 W. Washington St. "We've kind of dodged the bullet as a firm. But that's been luck."

However, Fifield continues to be a lone ranger in a portion of the West Loop submarket on the west side of the Chicago River. Fifield's $300-million Century Place development includes 550 W. Van Buren St. and 550 W. Adams, which increased in size on the drawing board by 50% to 600,000 sf. Most of his projects are strategically located between the market's two major commuter rail stations—Union Station and the Richard Ogilvie Transportation Center.

"I don't see any of my competition over here," says Fifield, who did get some from Development Resources' and Oaktree Capital Management's Congress Center at 525 W. Van Buren St. "We thought this area seemed to be overlooked."

The subarea has grown from 4.5 million sf of office space in 1998, Fifield says, to 8 million sf today with room to grow to 12 million sf. That would make it larger than the Oakbrook submarket in the East-West Corridor.

Indeed, Fifield has aimed for a suburban product, with smaller scale buildings with single banks of elevators, which result in lower costs. Instead of $300 per sf to develop a taller building on Wacker Drive, Fifield says his costs are in the $200 per sf range. In addition, the lower costs result in lower rents, but he still is able to see a higher yield on his investment.

For example, lease rates in Fifield's newer buildings were $20.50 per sf net a year ago, he says, but should rise to $23 per sf to $25 per sf in the next few years. However, developers of a newer building on Wacker Drive need to get $28 per sf to $30 per sf. In addition, the assessor's office places a relatively lower value on lower-density properties west of the river, resulting in lower operating costs. "At the end of the day, someone leasing 200,000 sf will see yearly rent savings of $1.5 million," Fifield says.

Competition is limited as available land has become scarce. "It's weird to think that in the three years since 550 W. Van Buren was started, that this street is done," Fifield says.

However, Fifield is helping boost population to more than 10,000 in the area with his 32-story, 266-unit Park Alexandria condominiums at 125 S. Jefferson St. as well as the first West Loop multifamily rental project at 180 N. Jefferson St.