Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CHICAGO-A swiftly changing Downtown multifamily market is forcing at least one developer to switch gears to selling a building as a rental property rather than condominium units. That will be the future for Heartland Partners’ 242-unit second phase of its Kinzie Station development.

The move comes months after Heartland Partners enjoyed financial success from the 163-unit first phase in the 300 block of N. Jefferson St. Almost all of the units have been sold, but pre-sales for the 34-story second phase next door have been sluggish.

“It appears to us there are a significant number of ‘for sale’ high-rise condominium units coming on stream in the downtown Chicago market in the near future,” says Heartland Partners President and CEO Edwin Jacobson. “We are also concerned about a weakening of demand for for-sale housing given current economic and political uncertainties.”

Marcus & Millichap’s Kiser Group is marketing the property in hopes of achieving a “forward sale” transaction. An investor will buy the building for a fixed price when construction is completed in spring of 2002.

Meanwhile, buyers of condominium units in the building will receive the their earnest money back as well as a discount on future Kinzie Station “for sale” projects.

The switch to an apartment building is consistent with existing zoning for the property, Heartland Partners adds. It also could capitalize on a dearth of multifamily rental product on the market.

“Chicago has a shortage of modern rental buildings,” Jacobson says. “By taking our Kinzie Station-Phase II building, which is designed and approved, and offering it as a rental building, we believe we can take provide a missing element in the Chicago housing market.”

Last month, Heartland Partners agreed to sell more than an acre for $5 million to Senco, which will build a 60,000-sf food store in Kinzie Station. Construction is expected to begin after the apartment building is completed.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. APARTMENTS Fall 2021Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.