Fifield Closes Echelon Sale to Crescent for $105M

CHICAGO-Steven Fifield announced Thursday night that the $104.5 million sale of the Echelon at K Station apartment tower has been completed. Miami-based Crescent Heights purchased the tower for almost $300,000 per door from Fifield and his joint venture partner, Newport Beach, CA-based Pacific Life Insurance Co.

The 350-unit West Loop tower was offered in conjunction with the East and West tower at Alta at K Station, totaling about 848 units. The package had been offered for about $450 million, but Fifield tells GlobeSt.com that though interest came fast from Crescent, he had to pull the Alta towers off the market. The Alta towers were opened in June 2010 and were still in lease-up at about 87% occupied, he says. “It’s just really hard to sell a building unless you’re meeting that 90% occupied for 90 days threshold that finance institutions insist on these days,” Fifield says.

He says it was startling to see so much competition with other towers such as the Flair and 1212 S. Michigan Ave., the latter which was also purchased by Crescent. “I’ve never seen so many buildings come on the market at the same time,” Fifield says. “It started with the big lift everyone had late last spring, not only in rental demand but in capital sources, the pension funds and insurance companies were racing into the market. It takes a while to get a book to market, and as we were putting this together in May, June and July, we didn’t realize that everyone else was evaluating the same strategy. Then in August and September, bam, four-five buildings come on the market at the same time, right when banks started back-peddling.”

The price for the Echelon, Fifield says, was about what they expected to get for the building, which was started in 2006 and finished in 2008. The property is 95% leased, but doesn’t have the newer amenities offered by the Alta and his new project, the 496-unit K2 tower going up at 365 N. Halsted. “The Echelon has class A amenities,” Fifield says, including a fitness center, outdoor deck with swimming pool, game room and a lounge, as well as unit perks such as granite countertops, and washers and dryers. “At the new projects, we’re putting in 8-foot to 9-foot ceilings, all granite and plank floors.”

The K2 tower is a little ahead of schedule, Fifield says, but still won’t open until April 2013, right when a number of other planned towers are also opening. He says it’s possible that supply will be short this year, but that next year should see the current urban-renter demand start being met. Other projects include the Coast at Lake Shore East, 500 Lake Shore Drive and AMLI River North. “We’re all within about a mile from the CBD, with the walk-to-work crowd becoming more common,” Fifield says.