X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CHICAGO-Smithfield Properties is building flexibility into its $65-million multifamily tower at 151 N. State St., which will include 37,000 sf of retail space on the first two floors. While the ninth through 32nd floors of the building at the northeast corner of State and Randolph streets will be 124 condominiums, the third through eighth floors will likely begin life as 66 multifamily units.

However, that could change, just as the Downtown multifamily rental market has in recent years.

“The apartment rental market has changed for the worse,” says Smithfield Properties partner Robert Buono, whose company is buying the property on the opposite corner of Block 37 for $9.58 million. “Greater flexibility is required for the middle part of the building.”

While the market has been on the skids since Smithfield Properties was one of three developers to answer the city’s request for proposals in July 2001, the Central Loop site is next to a parking garage, which would likely hinder the marketability of condominiums on the third through eighth floors. And if the multifamily rental market fails to improve by 2005, architect Lucien LaGrange’s design allows Smithfield Properties to turn the proposed apartments into offices or hotel rooms.

The city, which owns the two-story retail building that includes a Walgreen drug store operating under a month-to-month lease, was hoping to get $7.9 million for the property. Smithfield Properties bid $10 million, but the price was reduced when the developer agreed to make a portion of the retail space available to a local “mom and pop” retailer at a reduced rental rate. The city’s department of planning and development calculated the value of that discount at $420,000.

Some members of the community development commission, which recommended city council approval of the land sale and project Tuesday, thought some of the condominiums and rental units should have been set aside at affordable prices. However, department of planning and development officials say their focus was on affordable retail space.

“They’re paying more than what we paid for the property,” says department of planning and development commissioner Alicia Berg. “They’re requesting no tax increment financing assistance. There’s no land write-down.”

Had their been city financial assistance, the project might have fallen under a new affordable housing ordinance, requiring up to 20% of the units set aside for buyers and renters earning less than the area median income.

Buono says Smithfield Properties is setting aside $1.2 million for tenant improvements. He adds a coffee shop, grocery and florist are among potential “mom and pop” retailers eyeing the retail space.

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
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

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 © 2020 ALM Media Properties, LLC. All Rights Reserved.