The abandoned Spire site gets a neighbor as development interest picks up
Curt Bailey knows that in the frenetic game of Chicago real estate, the focus always is on the next deal.
So Bailey, president of Related Midwest, can’t ease up for long in enjoying the firm’s latest milestone. Related Midwest has opened its 47-story apartment building at 500 N. Lake Shore Drive, a tony address with views that justify rents near the top end of the downtown market. Bailey said early traffic in the leasing office has been strong, but he’s also closely following a site a block south, on the other side of the Ogden Slip.
It’s the place at 400 N. Lake Shore with the giant hole in the ground, the only visual evidence of when architect Santiago Calatrava and developer Garrett Kelleher amused Chicagoans with prerecession plans for a 150-story condo tower called the Chicago Spire. The tapered tower with a seemingly twirling profile looked like a missile in drag.
Aside from the hole, the other evidence of the project is the property’s debt, which has attracted Bailey’s interest. Jones Lang LaSalle is marketing the loan and hence likely control of the property. “We have looked into the property but we just don’t know what the status is,” Bailey said. “It’s been a little bit of an opaque process.” He wouldn’t comment on whether he’s submitted a price. A Jones Lang executive wouldn’t comment.
Two sources said Tampa, Fla.-based DeBartolo Development is pursuing the Spire site intently. DeBartolo, a diverse real estate firm with origins in the late Edward DeBartolo Sr.’s mall empire, has shown a pronounced interest in Chicago lately. It said last month that it bought Poplar Creek Crossing, a shopping center in Hoffman Estates. It’s also an investor with Optima in a two-tower apartment project planned in Streeterville. The first building is due to open this summer at 200 E. Illinois St.
A DeBartolo spokeswoman could not be reached for comment. In announcing the Hoffman Estates deal, DeBartolo President Edward Kobel said: “We like Chicago — it’s not really a market of booms or busts. It has great stability, great demography, and the economy is pretty robust.”
The debt on the Spire site is nearly $93 million. National Asset Management Agency, an agency of Ireland’s government, is marketing the loan while pursuing a foreclosure against Kelleher. The buyer of the loan is in line to get the deed.
Bailey noted that his firm owned the Spire property for a year before selling it in 2005. “It’s a very large property that would take a lot of investment,” he said.
Bailey speculated that any buyer of the 2.2-acre property will scrap Calatrava’s design and go for two towers. “One very large building would be hard to finance,” he said.
In the meantime, he’s counting the leases he’s signing at 500 N. Lake Shore — 30 of them in the first week of marketing. The 500-unit building has studios starting at $1,795 a month, one-bedrooms go from $2,200 to $3,800 per month, and other units range up to $15,000-per-month penthouses.
He said the building, with a concierge, a white-gloved doorman and on-site dog sitting, promises new standards of services for a rental building. Chicago-based Solomon Cordwell Buenz is the architect.
Alongside other projects downtown, it also will test the depth of demand for luxury apartments. Bailey said Related Midwest intends to hold the building and not flip it for condos.
For-sale housing will improve, “but I don’t think we’ll see that pendulum swing all the way back,” he said. “We’ll see people who are renters by choice.”
David Roeder reports on real estate at 6:22 p.m. Thursdays on WBBM-AM (780) and WBBM-FM (105.9). The reports are repeated at 10:22 p.m. Thursday and 7:22 a.m. Sunday.