Last year was one for the record books in Chicago multifamily real estate. Apartment sales downtown and in the suburbs set records for volume. This year, downtown multifamily struggled with new inventory resulting in flat rent growth, declining lease retention rates and developers of newer assets struggling to find buyers. It is a completely different story in the suburbs, where investor demand is growing and deal volume is outpacing downtown this year.
Stofflet said value-add is the primary driver for suburban investor activity. The trend is strong throughout the suburbs, but markets that stand out are Elk Grove Village, Deer Valley, the North Shore and Lake Bluff. The spread between average area rents and Class-A rents make value-add the strongest play for investors. KIG Senior Director Jason Stevens said institutional money is chasing opportunities near highly rated schools, lifestyle centers and grocers. Stofflet said institutional partners working with KIG even created a scoring system for target neighborhoods, prior to entering any acquisition criteria.
Developers in the burbs are following rail lines and building transit-oriented developments near the downtown cores of villages. This activity is dominated by larger apartment projects, with a smaller amount of low-rise condos, mirroring downtown trends. One area of activity that stands out is along Metra's BNSF line, running from Union Station to Aurora. Nine developments are under construction or have been delivered between Western Springs and Naperville. These projects range from Marq on Main, a $50M, 202-unit TOD that Marquette Cos. will deliver in spring 2018, and Uptown LaGrange, a 254-unit TOD that Opus Development delivered last August. And there are smaller low-rise condo developments like Foxford Communities' Foxford Station, a 28-unit luxury condominium development in downtown Western Springs, which broke ground last July. Foxford Communities Managing Director John McFarland said Foxford Station was originally intended to be a 52-unit apartment project during the entitlement process, but the company decided to build larger condos after seeing the flood of new apartments being built along the BNSF line. He believes there will be solid interest in Foxford Station from empty nesters making the move down market, and the apartments Foxford originally planned were too small.
Proposed units would be aimed at ‘high-end’ renters
By Marney Simon | Enterprise Staff
Village leaders got a first look at a proposal to turn vacant land into high-end apartments near Plainfield’s downtown area.
On Nov. 27, trustees were shown the concept plan for Cedarlake Village, a 288-unit apartment development proposed to sit west of the current American House Cedarlake senior residential community along Van Dyke Road.
The applicant, Buckingham Properties, is proposing units that sit along Wallin Drive.
The original plan to develop the property called for 422 units added to the American House subdivision. The site is now being proposed to hold an upscale, market-rate apartment development of 288 units.
Buckingham Properties President and CEO Christopher Coleman gave a rundown of the plan during a meeting of the Committee of the Whole. Coleman said the concept plan mirrors the Tapestry of Naperville apartment homes, as well as other high-end apartment complexes in neighboring areas.
“Those places are built to a very high standard, and that’s what we’re talking about here,” Coleman said. “They fill up immediately. There are people today who would love to live in that kind of a lifestyle, that kind of a community, but they simply don’t have the opportunity to stay in Plainfield. So, what do that have to do, they have to go to surrounding communities to find something like that. We think if we build that here, we will tap in to an unserved market of people who want to stay in Plainfield, of people who want to move to Plainfield, and take advantage of everything that makes Plainfield great.”
Coleman said the units would likely attract two renter demographics: Couples aged 20 to 30, and singles/couples between 40 and 55.
The site would include high-end apartment homes with designer finishes, a community center, pool, fitness center, cyber café, game room and business center.
The apartments would be three-story buildings with integrated garage parking, plus surface and detached garage parking.
Concept architecture has yet to be finalized, but will include a mixture of siding with stone and brick accents.
Floorplans will consist of one-, two-, and three-bedroom apartments, with rent at approximately $1,300 to $1,900 per month.
Village trustees had a smattering of differing opinions on the proposal.
“As a broker… the biggest feedback I get is, there’s nothing for rent in Plainfield, but I can’t afford $2,000 a month, I’m going through a divorce. That’s probably half of my clients,” said Trustee Cally Larson. “It’s a very unfortunate real circumstance that we deal with every day in real estate. And there is a need for it… I’m not opposed to this, but I have a lot of reservations about stability.”
Some village trustees had issues with the location for the proposed apartment complex. While the surrounding areas already contain residential uses, trustees said they expect Route 30 to become a commercial corridor, and high-end apartments may not be the preferred use.
“This is a great concept, but I would love for you to find another place for it,” said Trustee Larry Newton.
Trustee Margie Bonuchi added concerns that the units could create too much density in one spot.
“I like the idea, I think what you’re putting in is beautiful… but I don’t agree with that many units all in one place. I think it’s going to be taxing on additional services that we need,” Bonuchi said.
Trustee Edward O’Rourke said he was in favor of adding apartment options to the village.
“I think what we’re lacking is a balance between different housing types in our community,” O’Rourke said. “I think we’ve done a great job building single family homes, different two-story houses, but try to find an affordable ranch in our town or a condo, I don’t even think we have any condos with elevator services and ground parking for people that desire that aspect. So, apartments, we have some, but we certainly don’t have what I would describe as a surplus, so I think we’re probably underserved… and I think the location fits very well.”
Trustees provided the developers of the site with feedback. A date for further discussion or more complete concept plans will be determined at a future date.
Chris Coleman, VP of Development at Wingspan, periodically shares his thoughts and observations on property development news.