$72M Apartment Tower Opens at 40% Leased

CHICAGO-Though executives at the Lynd Co. had hoped to open at 100% occupied, the new $72 million EnV apartment tower in the River North neighborhood is finished, but still 60% vacant. Further, the 27,000 square feet of main-floor retail is also empty, two years after the firm hired Cushman & Wakefield to market the space.

David Lynd, COO with the firm, tells GlobeSt.com that the vacancy could be just a matter of timing and pricing. “Our leasing started in July, but because the leasing season begins about three months earlier, we may have missed part of it,” Lynd says.

The 249 units at 161 W. Kinzie are offered at about $2.95 per square foot, the highest rate for apartments in the city. An average unit is about 900 square feet, with penthouses offered at about $4,800 per month.

Lynd says the company can justify the high rents because of the dwindling supply of new multifamily product downtown, as well as the amount of amenities offered at the 29-story tower. The property has bamboo floors, stainless steel appliances, all-glass balconies, wireless Internet, a media room, a smart-phone enabled scheduling package and a rooftop pool.

“We knew when we started the project that we had a good piece of dirt, and we did our research. Renters are underserved in the area, especially at the level we’re at. We thought we could deliver a product that renters would appreciate and pay for,” Lynd says.

As for the retail portion, Lynd says he’s not worried about leasing it up. The company had planned on offering the space for $30 per square foot, but instead has been turning down $10 per square foot deals. “We know what we have there, and we’re not going to be forced to make a retail decision. We have plenty of offers, but not one that fits the economics and is the right user for the space. We’d like to have something that renters will use, such as a restaurant/bar that would deliver to residents, and a fitness facility/spa,” Lynd says. Effective rents in the North retail submarket are at about $23 per square foot.

Lynd says there’s a million new renters in the US thanks to foreclosures, but in Chicago it’s more likely that a tenant can afford a home but doesn’t yet want to take the risk. “Generally, occupancy isn’t a problem, but rents haven’t gone up,” he says. “We will be a beneficiary of supply and demand constraints in the future, as getting financing for new development is virtually non-existent.”