With construction getting underway on Optima Center Chicago, a new premier apartment high-rise will sprout up overlooking Lake Michigan. DeBartolo Development L.L.C. and partner Optima Inc. are building the 332-residence mixed-use multi-family property at a cost of $114 million.
Optima Center will carry the address of 200 E. Illinois St. in downtown Chicago’s tony Streeterville neighborhood near the popular Magnificent Mile shopping corridor. The 42-story tower will have some retail offerings of its own, featuring 22,000 square feet of Class A retail and office space. Designed by architect David Hovey of Optima, the building will also encompass a 235-car parking facility, an 11,600-square-foot two-story amenities package and a green rooftop sky deck. Additionally, Optima Center will qualify for the U.S. Green Building Council’s LEED certification.
The closing of financing for the project ignited the construction process. Draper & Kramer arranged the financing on the developers’ behalf, securing a syndicated construction loan facility through PNC/HSBC Bank and preferred equity from LaSalle Investment Management.
“We’re big fans of Chicago, one of the great 24-hour cities in the United States, and believe it’s arguably one of the strongest multifamily rental markets in the country,” Edward Kobel, president and COO of DeBartolo Development, said. “Strategically, the city has great stability, great demography and a robust economy making it a solid investment market for domestic and international investors.”
The vacancy rate in the Chicago apartment market continues to fall, and is on track to drop to 4.6 percent for 2011, marking a decline of 100 basis points from 2010, according to a third quarter report from Marcus & Millichap Real Estate Investment Services.
With such desirable market conditions, multifamily developers are coming off the sidelines in the Windy City. Among the luxury apartment projects that have recently commenced is Related Midwest’s 500-unit property at 500 Lake Shore Drive. Related is developing the 45-story skyscraper in a joint venture with AFL-CIO Building Investment Trust at a cost approximately $160 million. And just last month, Fifield Cos. and Wood Partners broke ground on K2, a 496-unit high-rise in the West Loop’s K Station master-planned community.
Optima Center is scheduled to deliver its first residences in 15 months.