OFFERING MEMORANDUM affiliated business disclosure CBRE, Inc. operates within a global family of companies with many subsidiaries and related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times, different Affiliates, including CBRE Global Investors, Inc. or Trammell Crow Company, may have or represent clients who have competing interests in the same transaction. For example, Affiliates or their clients may have or express an interest in the property described in this Memorandum (the “Property”) and may be the successful bidder for the Property. Your receipt of this Memorandum constitutes your acknowledgement of that possibility and your agreement that neither CBRE, Inc. nor any Affiliate has an obligation to disclose to you such Affiliates’ interest or involvement in the sale or purchase of the Property. In all instances, however, CBRE, Inc. and its Affiliates will act in the best interest of their respective client(s), at arm’s length, not in concert, or in a manner detrimental to any third party. CBRE, Inc. and its Affiliates will conduct their respective businesses in a manner consistent with the law and all fiduciary duties owed to their respective client(s). confidentiality agreement Your receipt of this Memorandum constitutes your acknowledgement that (i) it is a confidential Memorandum solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property, (ii) you will hold it in the strictest confidence, (iii) you will not disclose it or its contents to any third party without the prior written authorization of the owner of the Property (“Owner”) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any manner detrimental to the Owner or CBRE, Inc.
If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return it to CBRE, Inc. disclaimer This Memorandum contains select information pertaining to the Property and the Owner, and does not purport to be all-inclusive or contain all or part of the information which prospective investors may require to evaluate a purchase of the Property. The information contained in this Memorandum has been obtained from sources believed to be reliable, but has not been verified for accuracy, completeness, or fitness for any particular purpose. All information is presented “as is” without representation or warranty of any kind. Such information includes estimates based on forward-looking assumptions relating to the general economy, market conditions, competition and other factors which are subject to uncertainty and may not represent the current or future performance of the Property. All references to acreages, square footages, and other measurements are approximations. This Memorandum describes certain documents, including leases and other materials, in summary form. These summaries may not be complete nor accurate descriptions of the full agreements referenced. Additional information and an opportunity to inspect the Property may be made available to qualified prospective purchasers. You are advised to independently verify the accuracy and completeness of all summaries and information contained herein, to consult with independent legal and financial advisors, and carefully investigate the economics of this transaction and Property”s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK.
The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions at any time with or without notice to you. All offers, counteroffers, and negotiations shall be non-binding and neither CBRE, Inc. nor the Owner shall have any legal commitment or obligation except as set forth in a fully executed, definitive purchase and sale agreement delivered by the Owner. PMStudio_September 2018 2 TABLE OF CONTENTS
4 EXECUTIVE SUMMARY 10 PROPERTY DESCRIPTION 17 FINANCIALS 20 COMPS 25 MARKET OVERVIEW
KEELY POLCZYNSKI CHARLIE SCHARF Senior Vice President Client Services Specialist CONTACTS +1 312 861 7870 +1 312 935 1029 [email protected] [email protected]
3 4 CBRE, as exclusive agent, is pleased to announce the opportunity to acquire 1229 West Randolph Street, a two level 6,506 sf building featuring 60 feet of frontage along West Randolph Street. 1229 W Randolph, provides investors a unique opportunity to obtain a corner location on one of the busiest streets within the rapidly expanding Fulton Market neighborhood.
+ FULTON MARKET RENT EXPLOSION + NUMEROUS AWARD-WINNING RESTAURANTS Rents within Fulton Market have increased in most cases by 200- Annual consumer spending on dining in the 300%. Office rents are in the mid $30 psf NNN and retail rents are neighborhood exceeding $135 million. More than 125 $60-70 psf NNN and higher. award-wining restaurants and bars are within walking distance constituting Chicago’s highest concentration + FANTASTIC OWNER/USER OPPORTUNITY of chef-driven restaurants from notable chefs and 1229 W Randolph offers an owner/user a marquee corner, high restauranteurs, including Grant Achatz (Next, Roister, visibility and fantastic signage opportunities including the ability to & The Aviary), Stephanie Izard (Girl and the Goat, construct an awesome roof deck. Duck Duck Goat and Little Goat), Rick Bayless (Lena Brava & Cruz Blanca) and Paul Kahan (Blackbird and + BOOMING RETAIL MARKET Avec). Across the street sits City Winery, a restaurant, music venue and + SOLID PRESENCE OF TODAY’S STRONGEST private event location, that was one of the first high end restaurants GLOBAL BRANDS to enter the Fulton Market neighborhood and recognize its potential. Since 2012 the business has done extremely well, and the property Fulton Market has experienced explosive growth in has doubled in value, within its first 6 years. Other pioneering retailers its scene for food, design, hospitality, art, culture, have been successful in this area including Billy Reid as well as newly technology and business. Brands in the market signed leases with Free People, Lululemon, Anthropologie and a include Soho House, McDonald’s, We Work, Google, Starbucks Cafe Concept called Princi, one of the first of its kind in the Dyson and Uber. United States, flagship location.
5 EXECUTIVE SUMMARY KINZIE KINZIE
BL IND P IG 450 N. MORGAN DISTILLER Y
MORGAN NEALEY MANUFACTURING FOODS ADM MILLING CARROL CARROL
NEALEY HWY 90/HWY 94 LINDA GOOGLE FOODS WARREN
KET ING PROJECTS ADA DYSON MA R AR PENTER GLASSDOOR BERD EEN MAY PEORIA C RACINE GREEN HALSTED SANGAMON MORGAN A AL S LAFLIN SKENDER STAR FOODS NEALEY IZ ABETH PIZZERIA PUNCH BOWL SOCIAL CLIMATE FOODS
EL DEL MERCATO DE AN & DELUCA AESOP FOUR CDT MAT ERI
FULTON FULTON
JUPITER ROISTER RAMEN TAKEYA OUTPOST CEMITAS PUEBLA REVEL 81 EVENTS APARTMENTS LIMITLESS KAVI GUPTA N. PEORIA
LESLIE THE POLENTA BAR HINDMAN HARVEST JUICERY DRIVE- AUCTIONEERS CORNED BEEF FACTORY THROUGH AXELLE + IVY
LAKE LAKE
PLANNED RECENTLY COMPLETED 314 UNIT 263-UNIT MACELLO 236 APARTMENT
VERA SOHO HOUSE LA BOTTOM APARTMENT 175 CHICAGO RISTORANTE APARTMENT FORUM DEVELOPMENT LUCE LOUNGE DEVELOPMENT UNITS APARTMENT YA LIST UNITS FOXTROT COWORKING SMYTH & THE LO HU NTER TANOSHII CHE BAR CHE RONERO THE LUNATIC, LENA BRAVA CRUZ BLANCA STARB UCKS VENUE ONE GRA NGE HALL MAUDE’S NO SH & BOOZE BOMBOBAR BAR SIENA STARB UCKS
SAWTOOTH STUB HUB LONE WOLF BAD AU CHEVAL FUTURE DEV ELOPMENT
RANDOLPH RANDOLPH
WEST LOOP RESIDENTIAL BUILDING KAISER SALUMI EQUINOX
NONNA’S HAYMARKET BREWERY MA NCE TIGER SU SHI DOKKU HOTEL & HI NESE CONDO S GRAZ IANO PERFOR TRAINING SYSTEMS MONTESSORI ACADEMY OF SCIENCES UN C INDUSTRIAL BUILDING NO TRE 2F J.P. GROCERY
EASTMAN EGG GREEN STREET SMOKED MEATS WILLARD GLOBALGLOBAL HEADQUARTERSHEADQUARTERS CIRCA MAS PROPOSED 922 RETAIL/OFFICE BUILDING
HOTEL SUBWAY THE PUBLISHING WASHINGTON WASHINGTON HOUSE B&B
A & A AUTO WISHBONE CHASE HOSPITALITY BUILDING CHICAGO
SERIVCE 94 90/HWY HWY MARIA PINTO PATROLMEN’S DUNKIN DONUTS KAVI GUPTA FEDERAL CREDIT UNION HIGHWAY ACCESS HR OOP AR PENTER T MORGAN LAFLIN LOOMIS ADA ELIZABETH RACINE MAY AB ERDEEN C SANGAMON PEORIA GREEN HALSTED WEIGEL BROADCASTING THREADLESS N PLACE GR ILL CTA MORGAN STATION JOHNNY’S FRESHII MONTEVERDE MB WEST ICE HOUSE END LUXE THE MADISON RESTAURANT MA DISON ABERDEE CROSSROADS BAR &
MADISON MADISON DIVVY STATION THIRD BUTTERFLY OLD FEDEX 901 WEST SCC RAIL SUSHI 5TH STARBUCKS MADISON RESTAURANTS & RETAILERS
PROPERTY SUBMARKET OWNER STATUS DATE STRATEGY FULTON MARKET SNAPSHOTFULTON SNAPSHOTParker Fulton Market Fulton Market TBD On Mkt There is no near Madison at Racine West Loop ARA Sold Mar-17 Long Term Hold term chance to Circa922 West Loop Clarion Sold Jun-15 Long Term Hold CTA MORGAN STATION buy a luxury FUTURE DEVELOPMENT RETAIL/OFFICE BUILDINGArkadia Tower West Loop Prudential Re-Cap Sep-15 Long Term Hold multifamily Gateway West Loop Zurich Sold Mar-16 Long Term Hold building in the RESIDENTIAL BUILDING HOSPITALITY BUILDINGCatalyst WestDIVVY Loop STATION RREEF Re-Cap Sep-15 Long Term Hold West Loop LaSalle Sold Jul-15 Long Term Hold West Loop. The 127% 845+ HOTEL KEYS OVER 1.7M SF OF $132,250 CURRENT 63.2% OF FULTON MARKET West Loop LaSalle Sold Dec-16 Long Term Hold Parker is the ONLY POPULATION GROWTH IN (UNDER CONSTRUCTIONINDUSTRIAL EXISTING/UNDER BUILDING AVERAGE HOUSEHOLD POPULATIONHIGHWAY IS BETWEEN ACCESS RESTAURANTS & RETAILERS THE LAST 15 YEARS OR PLANNED) K2 West Loop Georgetown Sold Jul-14 Long Term Hold luxury asset in 1010 CONSTRUCTION OFFICE INCOME IN FULTON THE AGES OF 25-44 11 Lorem ipsum 1035 West Van Buren West Loop U/C Delivery Mid '17 Long Term Hold Fulton Market. SPACE & 1.8M SF OF MARKET 1 North Halsted West Loop U/C Delivery Late '18 N/A 6 EXECUTIVE SUMMARYPLANNED OFFICE SPACE 94 90
Grand MILLENNIAL DRIVEN OFFICE MARKETFulton
Google 8 Lake 223,067 SF (2015) Uber 9 Intouch Solutions Sandbox 6,058 SF (2012) 12,000 SF (2014) The Mill 23,000 SF (2016) Industries Sage Botanic 20,169 SF (2015) Media Randolph Tastytrade 3,000 SF (2015) Kinzie 11,896 SF (2016)
BrainSurf iCrossing 10 Kennedy Expwy 3,500 SF (2016) 4,615 SF (2016) CH Robinson Phosphor 51,800 SF (2012) Games 7,778 SF (2016) Threadless 14,974 SF (2016) Halsted Mosaic Sales Carroll Green Solutions Morgan 43,411 SF (2016) 94 Carpenter Peoria Uber Madison Skender 19,313 SF (2014) 90 34,000 SF (2017) Sangamon Fulton Aberdeen Glassdoor 51,547 SF (2017) Lake
Elizabeth May 20 Racine
Ogden Ada Randolph McDonald’s 547,483 SF (2018) Product Development Technologies Washington 3,000 SF (2017)
Madison Emerge Media 6,253 SF (2015) Lunar Design 11,800 SF (2017) Monroe INFORMATION INCLUDES: TENANT Echelon Capital LEASED SF 1,825 SF (2016) YEAR LEASE WAS SIGNED Adams
Jackson 94 ROTI 90 1,435 SF (2018)
Grand
MILLENNIAL DRIVEN RETAIL MARKET Fulton
Punch Bowl 30,000 SF (2018) Lake Kuma’s Corner 3,631 SF (2017) Limitless Aesop Coffee 775 SF (2017) 2,550 SF (2017) Blind Barber Cycle Bar Randolph 3,200 (2017) 3,900 SF (2017) Kennedy Expwy Ballast Point 12,308 SF (2017) Kinzie Shake Shack Bad Hunter 3,250 SF (2017) 1,300 SF (2016) Taylor Gourmet Lululemon Quality Italian 1,933 SF (2017) 1,333 SF (2017) 6,720 SF (2018) Do-Rite 1,933 SF (2018) Bonci Pizzeria Federales 1,350 SF (2018) Randolph Halsted 5,051 SF (2017) honeygrow 1,933 (2017) Bluemercury 94 Sweetgreen 1,838 SF (2018) Carroll 2,018 SF (2017) Morgan Starbucks 3,065 SF (2017) Jeni’s Ice Cream 90 Anthropologie 900 SF (2018) May 10,004 SF (2017) Desplaines Green Madison Racine Capriotti’s 2,088 SF (2017) Veggie Grill Fulton 2,542 SF (2018) Lake Aspen Dental 50,000 SF (2018) Elizabeth Carpenter Umami 2,734 SF (2016) Peoria City Winery Sangamon 23,000 SF (2012) Aberdeen Randolph Ada McDonald’s 9,057 SF (2018)
Ogden Free People 8,350 SF (2017)
Washington Gyu-kaku 2,966 SF (2014) Lou Malnati’s 21,650 SF (2018) Madison
Randolph INFORMATION INCLUDES: Monroe TENANT LEASED SF Kaiser Tiger 14,000 SF (2016) YEAR LEASE WAS SIGNED
Adams N WILLARD CT
W RANDOLPH ST
9 AERIAL 10 DYNAMIC/EMERGING & IMPRESSIVE DEMOGRAPHICS TRENDS
POPULATION GROWTH OVER PROPERTY FACTS 12 7 % THE LAST 15 YEARS
ADDRESS 1229 W Randolph St Chicago, IL
HOTEL KEYS UNDER CONTRACT OR COUNTY Cook 845+ PROPOSED LAND AREA 3,250 SF
APARTMENT UNITS UNDER REAL ESTATE TAX PIN 17-08-330-007-0000 3,200 CONSTRUCTION TOTAL 2017 TAX $28,923.40 OR PROPOSED TOTAL 2016 TAX $26,818.26
OVER OF OFFICE RANDOLPH FRONTAGE 60 Feet EXISTING, 3M 3.5 UNDER CONTRACT MSF OR PROPOSED ZONING/FAR C1-3
BUILDING SF 6,506 AVERAGE HOUSEHOLD $134,827 INCOME PARKING 1 Indoor Parking Space
The building can include a roof deck PROPERTY ADDITIONS and with new DX-3 zoning add an OF POPULATION additional 4 stories 63.2 % IS 25-44
11 PROPERTY DESCRIPTION PROJECT DATA ZONING ALL ZONING SHOULD BE REVIEWED BY OWNER’S COUNSEL
TOPIC EXISTING PROPOSED
ZONE C1-3 DX-3
USE Commercial Commercial
SITE AREA 3,484 3,484
FLOOR AREA RATIO (ALLOWED) 3.09 3.09
FLOOR AREA RATIO (ACTUAL) 1.87 5.75
MAX ALLOWABLE AREA, AS PER F.A.R 10,766 20,033
BUILDING GROSS AREA 6,506 6,506
ADDITIONAL BUILDABLE 4,260 13,527
Parking for the Property is provided by one garage space located in the middle eastern side of the building that is accessible for the east side of the building by an overhead aluminum sectional door. The Property building COMMERICAL occupies the entire Property and there are no other parking areas at the Property. Additional Property parking is available along the City of Chicago PARKING streets, or by leasable parking spaces in an adjoining parking lot south of the Property.
A nonresidential use may use up to two vehicle parking spaces BIKE providing bicycle parking.
LOADING - COMMERCIAL 0 for 0-24,999 GSF 0
HC SPACES - COMMERCIAL 1 for 1 to 25 parking spots 0
YARDS - ALL NR 0'
BUILDING HEIGHT 27'5'' 6-stories
12 PROPERTY DESCRIPTION B3-3 M2-3 C3-3 B3-5
KINZIE ST TS RETNEPRAC TS
TS NEEDREBA TS PMD 4
TS YAM TS
EVA ENICAR EVA
TS HTEBAZILE TS
TS NAGROM TS TS NEERG TS
TS AIROEP TS PD 819
ARBOUR PL DS-5 CARROLL AVE B3-3 CARROLL AVE M2-3 2821 DP 2821 C3-3 PD 643 PD 632 CARROLL AVE B3-5
TS SIMOOL TS M2-3 M2-3 WAYMAN ST WAYMAN ST
C1-5KINZIE ST TS RETNEPRAC TS
TS NEEDREBA TS PMD 4
TS YAM TS C3-5 EVA ENICAR EVA PMD 4 HTEBAZILE TS
C1-3 NAGROM TS TS NEERG TS TS AIROEP TS C3-2 PD 819 FULTON ST EVA NOINUDX-5 C2-5 PD240 ARBOUR PL
PAULINA ST PAULINA C3-2
B3-3 C1-1 DS-5 FULTON MARKET TS NOMAGNAS TS
FULTON ST 5-3C M2-3 TS NILFAL TS TS ENITSUJ CARROLL TS AVE M2-3 C3-3 PD B3-5 C3-3 CARROLL AVE 1277 C1-5 PD 2821 DP 2821 PD 643 PD 632 616 WALNUT ST KINZIEB3-3 ST CARROLL AVE RETNEPRAC TS PD 1290 TS NEEDREBA TS PMD 4
TS YAM TS WALNUT ST TS SIMOOL TS EVA ENICAR EVA M2-3 M2-3 TS HTEBAZILE TS C1-3 C1-5 M2-3 WAYMAN ST WAYMAN ST
TS NAGROM TS C3-3 TS NEERG TS PMD 4 B3-5 AIROEP TS C3-5 PD 819 C1-3 C3-2 C2-5 EVA NOINUDX-5 FULTON ST ARBOUR PL KINZIE ST C1-2 PD240 TS RETNEPRAC TS C2-5
TS NEEDREBA TS PMD 4
TS YAM TS EVA ENICAR EVA
PAULINA ST PAULINA C3-2 TS HTEBAZILE TS DS-5 LAKE ST NAGROM TS C1-1
3-SD TS NEERG TS
TS AIROEP TS FULTON MARKET PD 819
3-1C TS NOMAGNAS TS
FULTON ST 5-3C
3821 DP 3821
CARROLL AVE NILFAL TS TS ENITSUJ TS CARROLL AVE ENICAR M2-3EVA C2-5 PD PD ARBOUR PL C3-3 1277 2821 DP 2821 C1-2 PD 643 PD 632 C1-5 1252 PD PD WALNUT ST C1-2 PD 1290 DS-5 616 860 EVA DNALHSA EVA CARROLL AVE WALNUT ST TS SIMOOL TS M2-3 M2-3 CARROLL AVE C1-5 C1-3 WAYMAN ST WAYMAN ST DX-5 COUCH PL DX-7 PMD 4 C3-5 CARROLL AVE C3-1 PD 51 C1-3 C3-2 DP 2821 C2-5 PDPD 643 746 PD 632 FULTON ST C1-2 EVA NOINUDX-5 CARROLL AVE C2-5 PD240PD TS SIMOOL TS M2-3 LAKE ST M2-3 DETSLAH TS PAULINA ST PAULINA C3-2 C1-5 WAYMAN ST WAYMAN ST
3-SD 3-1C
C1-5 C1-3
C1-1 DP 3821 C3-5 FULTON MARKET 1286 C1-3 DX-7
EVA ENICAR EVA TS NOMAGNAS TS
MAYPOLE AVE FULTON ST PMD 4 5-3C C2-5 C1-3 PD TS NILFAL TS TS ENITSUJ TS M2-3 PD C3-2 PD FULTON ST C1-2 1252 EVA NOINUDX-5 C3-3 C1-2 1277 DP 0321 PD240
RANDOLPH ST C1-5 C2-5PD YPXE Y D860 E N N EK EVA DNALHSA EVA WALNUT ST ST PAULINA C3-2 616 COUCH PL
PD 1290 C1-1 DX-5 FULTON MARKET DX-7 TS NOMAGNAS TS
FULTON ST 5-3C WALNUT ST C3-1
C1-3 DRALLIW TC TS NILFAL TS PD 51 ENITSUJ TS PD 746 M2-3 PD PD 1048
C3-3 C2-5 PD 1277 C1-5 PD TS DETSLAH TS POS-1 ADA TS
RM-5 C1-5 C1-3 616 WALNUT ST C1-3 C1-2 YAM TS PD 572 1286 C1-3 DX-7 MAYPOLE AVE PD 1290 DX-7 WALNUT ST COURT PL LAKE ST C1-3DX-3 PD
3-SD
0321 DP 0321
C1-2 3-1C DX-5 YPXE Y D E N N EK
3821 DP 3821 RANDOLPH ST DC-12 EVA ENICAR EVA C2-5 PD C2-5 1005 C1-2 C1-21252 PD DX-5 OGDEN AVE C1-2 DRALLIW TC 860
EVA DNALHSA EVA LAKE ST PD 1048
3-SD
PD 3-1C POS-1 ADA TS COUCH PL RT-4 DP 3821 DX-7
RM-5POHSIB TS TS YAM TS DX-5 EVA ENICAR EVA PD 572 TS SIMOOL TS 729 C1-3 C2-5 C3-1 DX-7 PD COURT PL PD 51 C1-2 C2-3 WASHINGTON BLVD DX-3 PD 746 C1-2 1252 PD PD C1-2 DX-5 1005 DC-12860
EVA DNALHSA EVA PD TS DETSLAH TS COUCH PL C1-5 C1-3 1286 C1-3 PD 862 DX-7DX-5 DX-5 DX-7 MAYPOLE AVE OGDEN AVE DX-5 C3-1 DX-3
RT-4 PD 51 B3-3 PD PD 746 TS POHSIB TS
0321 DP 0321 TS SIMOOL TS RANDOLPH ST 729 YPXE Y D EPD N N EK WARREN BLVD C2-3 WASHINGTON PDBLVD 629 DETSLAH TS C1-5 C1-3 1286 C1-3 PD DX-7 DX-7 PD MAYPOLE AVE DRALLIW TC PDPD 862 1048 DX-3 DX-5 DP 0321 710 B3-3 YPXE Y D E N N EK RM-5 POS-1 B3-3ADA TS RANDOLPH ST 779 B3-3 B2-3 C1-3 YAM TS PD 572 DX-3 WARREN BLVD RM-5 DX-3 PD 629 DX-7 COURT PL PD PD PD 233 C1-2 DRALLIW TC DX-7 DX-5 1005 DC-12 PD 1048 PD RM-5 POS-1 B3-3 ADA TS PD 931 DX-5 DX-5 710DX-7 779 B2-3 B3-5 PD 1246C1-3 YAM TS PD 572 C2-3 OGDEN AVE B3-3 RM-5 C2-3 RM-5 DX-3 DX-3 DX-7 COURT PL RT-4 C1-2 C2-3 PD PD 233PD C1-3 POHSIB TS DX-5 DC-12 PD 118 SIMOOL TS 729 PD 931 DX-7 1005 C2-3 WASHINGTON BLVDB3-5 PD 1246 MADISON ST DX-5 DX-5 C2-3 C2-3 RM-5OGDENC2-3 AVE C1-3 RT-4 PD 118 PD PD 862 DX-5
TS POHSIB TS DX-3 B3-3 SIMOOL TS B3-2 DX-5 729 MADISON ST DX-3 C2-3C2-3 C2-3 WASHINGTON BLVD PD 629 C2-3 DX-5 WARREN BLVD C2-3 B3-2 DX-3 PD PD 862 DX-7 PD C2-3 B3-3 C2-3 DS-3 DX-5 DX-3 B3-3 710 779 B3-3 B2-3 RM-5 DX-3 DR-3PD 629 DS-3 WARREN BLVD PD 700 DR-3 PD 233 PD DX-7 PD C2-2 2-SOP PD 931 PD 700 DX-5 DX-3 DX-7 710 B3-5 B3-3 2-SOP DX-3 RM-5 C2-3 C2-3 RM-5 C2-3 C2-3B3-3 B2-3 C2-2PD 1246 RM-5 DX-3 DX-3 779 C1-3 B3-3 C2-3RM-5 5-MR DX-3 PD 233 PD 118 PD 747 B3-3 PD 747 5-MR M1-3 M1-3 B3-5 C2-5 C2-5 MADISON STPD 929 PD 929 B3-5 PD 820 B3-5 DX-5PD 1246 DX-5PD 931 PD 820 DX-5 DX-7 RM-5C2-3 RM-5C2-3 RM-5 C2-3 DX-5 C1-3 PDC2-3 118 B3-2 DX-3 C2-3 C2-3 MONROE ST MADISON ST DX-5
MONROE ST DR-3 DX-5 Downtown ExpansionDX-5 Areas 3-2B DS-3 ENICAR EVA
TS POORHT TS DX-3DR-3 Downtown Expansion Areas
3-2B EVA ENICAR EVA B3-2 TS POORHT TS C2-3DR-3 C2-3 B3-5 DR-3 PD 700 B3-5 C2-3DR-3 Near West Area C2-2 2-SOP PD 773 DX-3 DS-3 RM-5 C2-3 PD 890 DX-3 Near West Area B3-3 5-MR DR-3 PD 747 PD 773 C2-5 M1-3 PD 929 B3-5 POS-1 PD 700 Map Key PD 890 C2-2DX-5 2-SOP PD 1087 PD 820 DX-3 RM-5 RM-5 C2-3 B3-3 DX-3DS-3 B3-3 B3-3 5-MR C2-3 PD 747 POS-1 C2-5 M1-3 B3-5 DR-3 DX-5 Map Key MONROE ST PD 1087 PD 929DX-5 DX-5 PD 820 Proposed Downtown Expansion Boundary RM-5 B3-3DR-3 Downtown ExpansionDS-3 Areas
B3-3 3-2B EVA ENICAR EVA TS POORHT TS DR-3 DX-5 C2-3 ADAMS ST B3-5 DR-3 MONROE ST DX-5 BoundaryProposed of Existing Downtown Downtown Expansion Zoning Boundary
B3-5 B3-5 Near West Area DR-3 Downtown Expansion Areas
3-2B M1-3 ENICAR EVA PD 890 PD 773 POORHT TS DR-3 TS NILFAL TS PD 103 B3-5 ADAMS ST SIMOOL TS DS-3 NearExisting WeBoundaryst ZoningArea Lines of Existing Downtown Zoning POS-1 PD 773PD 1087 B3-5 Map Key B3-3 RM-5 PD 890 B3-3 B3-5 M1-3 DS-3 C2-3 B3-2 DR-3 DX-5POS-1 RM-5 Proposed Downtown Expansion Boundary Map MetraKey Line & Station TS NILFAL TS PD 103 PD 1087 B3-3 SIMOOL TS DS-3 B3-3 DS-3 Existing Zoning Lines C2-3 DX-3 DR-3 DX-5 Proposed Downtown Expansion Boundary ADAMS ST 3-2C B2-3 B3-5 Boundary of ExistingDR-3 Downtown Zoning CTA Line & Station B3-2 RM-5 B3-5 M1-3 B3-5 M1-3 ADAMS ST RM-5 BoundaryMetra of LineExisting & StationDowntown Zoning TS NILFAL TS B3-5 PD 103 Building Footprints TS SIMOOL TS RM-5 JACKSON BLVD DS-3 B3-5 M1-3 B3-5 Existing Zoning Lines
TS NILFAL TS PD 103 RM-5 SIMOOL TS DX-3 DS-3 Existing Zoning Lines B3-2 3-2C CTA Line & Station RM-5 B2-3 B3-5 5-XD Metra LineDR-3 & Station Water B3-2 RM-5 M1-3 C2-5 DX-3 PD 925 RM-5 Metra Line & Station B3-5 B3-3 3-2C B2-3 B3-5 DR-3 CTA Line & Station Building Footprints RM-5 JACKSON BLVD M1-3 DX-3DS-3 Draft FAR Range Guidelines PD 278 3-2C DR-3 CTA Line & Station B3-5 B2-3 B3-5 Building Footprints RM-5 JACKSON BLVD B3-5 C1-3M1-3 3.0 Base FAR, 5.75 Maximum FAR B3-5 5-XD BuildingWater Footprints RM-5 JACKSON BLVD C2-5 DX-5 5-XD Water C2-5 PD 925 B3-5 5.0 Base FAR, 8.1 Maximum FAR 5-XD Water B3-3 VAN BUREN ST PD 925 C2-5 DS-3 B3-3 DS-3 PD 925 DraftTILDEN FA RST RaPDng 1300e Guidelines Draft FAR Range Guidelines B3-3 PD 278 PD 278 M1-3 DS-3 PD 867 Draft FAR Range Guidelines EISENHOWER EXPY B3-5 C1-3 B3-5 PD 278 C1-3B3-5 3.0 Base FAR, 5.75 Maximum FAR 3.0 Base FAR, 5.75 Maximum FAR DX-5 C1-3 The FAR3.0 Base range FAR, 5.75 guidelines Maximum FAR are for future consideration of B3-5 DX-5 5.0 Base FAR, 8.1 Maximum FARDX-5 C1-3 B3-5 B3-5 VAN BUREN ST PD 1300 5.0 Base5.0 BaseFAR, 8.1 FAR, Maximum 8.1 MaximumFAR FAR VAN BUREN ST VAN BUREN ST TILDEN ST individual applications, not redesignations or rezonings in M1-3 PD 867 PDTILDEN 1300 ST PD 1300 EISENHOWER EXPY M1-3 TILDEN ST PD 867 EISENHOWER EXPY M1-3 CONGRESS PKWY The FAR range guidelinesPD 867 are forand future of themselves. consideration Specific of applications and requests will EISENHOWER EXPY PD 416 B3-2 The FAR range guidelines are for future consideration of C1-3 C1-3 individual applications, not redesignationsbeindividualThe reviewed FAR applications, orrangein rezoningsaccordance guidelines not in redesignationswith applicable are for or standards.futurerezonings consideration in of C1-3 CONGRESS PKWY CONGRESS PKWY and of themselves. Specific applications and requests will PD 416 andindividual of themselves. applications, Specific applications not redesignations and requests will or rezonings in B3-2 PD 416 B3-2 be reviewed in accordance with beapplicable reviewed standards. in accordance with applicable standards. CONGRESS PKWY and of themselves. Specific applications and requests will PD 416 B3-2 be reviewed in accordance with applicable standards. 1ST FLOOR - FLOOR PLAN
14 PROPERTY DESCRIPTION 2ND FLOOR - FLOOR PLAN
15 PROPERTY DESCRIPTION MORGAN (BLUE/PINK LINE)
HQ
RANDOLPH ST HQ
16 AERIAL FACING EAST 17 EXISTING STRUCTURES
RENTS (NNN) TOTAL RENTAL INCOME 1ST FLOOR 3,256 $65 $211,640 2ND FLOOR 3,256 $43 $140,008 TOTAL 6,512 $351,648
NET OPERATING INCOME (LESS 5% VACANCY/CREDIT LOSS) $334,066 Capitalized at 6% $5,567,760
HARD COSTS Tenant Improvement Costs ($125 psf) $814,000 Leasing Commissions(5%) $83,516
Total Hard Costs $897,516
SOFT COSTS Legal $20,000 Carry $28,923 Contingency (20%) $179,503
Total Soft Costs $228,427
TOTAL COSTS $1,125,943 Developer Profit (15%) $835,164 PSF
NET VALUE AS-IS $3,606,653 $553.85
You are solely responsible for independently verifying the information in this Memorandum. ANY RELIANCE ON IT IS SOLELY AT YOUR OWN RISK.
18 FINANCIALS SENSITIVITY ANALYSIS EXISTING STRUCTURE
VARIABLES
RENT NOI CAP RATE VALUE COSTS TOTAL DEVELOPER PROFIT TOTAL TOTAL VALUE
BASE SCENARIO MARKET $334,066 6.00% $5,567,760 MARKET $1,125,943 MARKET $835,164 $3,606,653
UP SCENARIO 2% INC $340,747 5.90% $5,775,371 2% DEC $1,103,424 7.5% DEC $772,527 $3,899,420
DOWN SCENARIO 2% DECR $327,384 6.10% $5,366,956 2% INC $1,148,462 7.5% INC $897,801 $3,320,692
You are solely responsible for independently verifying the information in this Memorandum. ANY RELIANCE ON IT IS SOLELY AT YOUR OWN RISK.
19 FINANCIALS 20 SALE COMPS
NO. ADDRESS SALE DATE SALE PRICE BLDG SF PRICE PER SF LAND SF ZONING
1 800 W Fulton Market 3/5/2018 $12,250,000 25,952 $472.02 8,488 C2-5
2 15 S Aberdeen St 10/14/16 $3,136,000 10,000 $313.60 5,227 DS-3
3 185 N Morgan St 2/2/18 $12,200,000 9,200 $1,326.08 9,918 C1-2
Asking - 4 1100-1108 W Randolph St N/A 10,552 $1,235.50 6,599 C1-3 $13,000,000
5 820 W Lake St 2/1/18 $13,037,780 11,500 $1,133.72 4,800 C1-1
21 COMPS GROUND FLOOR - LEASE COMPS
NO. ADDRESS TENANT SIGNED DATE GROUND FLOOR SF RENT (PSF)
1 900 W Randolph St Bluemercury Jun-2018 1,838 $85.00 NNN
2 911 W Randolph St Veggie Grill Jan-2018 2,542 $83.00 NNN
3 185 N Morgan St Honey grow June-2017 1,933 $70.00 NNN
4 945-955 W Fulton Market Roister Restaurant Jan-17 2,500 $65.00/NNN
5 832-856 W Fulton Market Beatrix May-18 5,684 $70.00/NNN
22 COMPS 2ND FLOOR - LEASE COMPS
NO. DATE TENANT ADDRESS BUILDING SF 2ND FLOOR SF RENT (PSF)
1 10/1/17 Beacon Funding Corp 730 W Randolph St 39,000 6,000 $25.00/NNN
Chicago Oral Surgery 2 10/1/16 1229 W Washington Blvd 34,548 4,950 $27.00/MG & Implant Center
3 6/1/17 Breather 809-813 W Randolph 15,900 2,040 $27.00/NNN
4 4/1/17 Asking Rent 946 W Randolph St 7,052 3,526 $30.00/FG
5 3/1/17 Listen, LLC 401 N Morgan St 87,276 5,000 $26.00/NNN
6 2/2/18 Asking Rent 832-856 W Fulton Market 60,000 7,893 $35.00/NNN
The Lamar Johnson 7 10/1/17 300 N Elizabeth St 121,751 3,803 $34.00/MG Collaborative
23 COMPS MORGAN (BLUE/PINK LINE)
KENNEDY EXPRESSWAY
HQ
HQ
24 AERIAL FACING NORTHEAST 25 A BRIEF HISTORY OF THE FULTON MARKET & MEATPACKING IN CHICAGO
The Union Modern Day Fulton Market Stockyards 1947 Loft Present Day
STABILITY Existing assets in the Fulton Market continue to RESIDENTIAL DEVELOPMENT CURRENT MARKET EXPERIENCES operate as wholesale meatpacking plants serving Existing warehouse structures begin being INCREDIBLE DEMAND, SPURRING both the region and the country transformed into loft residential product DEVELOPMENT Multifamily, Retail, Office & Hotels are on the rise in the area
02 04 06
MID 1800’S - 1930’S 1940’s - 1950’s 1960’s - 1980’s 1980’s - 1990’s EARLY 2000’S 2013 - CURRENT
01 03 05
The Union West View of Restaurant Row Stockyards 1800’s Fulton Market, 1961 Corridor
TREMENDOUS GROWTH A CHANGE IN MEATPACKING DINING & ENTERTAINMENT COMES Chicago’s centralized location and railroad Due to improvements in technology, TO THE NEIGHBORHOOD allow the Union Stockyards located the meatpacking industry moves to a Centered primarily on Randolph, the south of Fulton Market to become the localized model. Many businesses in the market becomes the host of a number of recognized headquarters of meatpacking Fulton Market continue to operate, serving restaurants, which in the future will act as a in the world, as well as a produce market primarily Chicagoland area customers. Union catalyst for development demand. hub. Dozens of buildings are constructed Stockyards are closed in 1971. in the Fulton Market and used for packaging and processing of meat.
26 MARKET OVERVIEW TRANSFORMATIVE CREATIVE LOFT OFFICE MARKETS ACROSS THE UNITED STATES
TIMING: Early 2000’s (slowly DRIVING FORCES: evolving since the 1990’s) • Certain tenants priced out of the financial district and midtown forced to find MEATPACKING accommodating office rents near residential areas of Manhattan DISTRICT RENTS: • Google buys 111 Eighth Avenue, across the street from Chelsea Market (CHELSEA) 2007: $40.00/SF NEW YORK, NY • Dance clubs, mixed-use developments and luxury retail stores replace the 2016: $78.33/SF historic food shopping areas of the far west side • Soho House (opened in 2003); High Line; Apple Store, Hotel Gansevoort
TIMING: Mid 2000’s DRIVING FORCES: • Amazon’s insatiable need for office space SOUTH LAKE RENTS: UNION 2004: $26.91/SF • Passage of the Growth Management Act supported long term vision SEATTLE, WA 2016: $44.26/SF • Seattle Commons Park THE TRANSFORMATION OF THE FULTON TIMING: Mid 2000’s DRIVING FORCES: MARKET INTO A HIP • Designated “Area of Change” in the Blueprint Denver report RINO RENTS: (RIVER NORTH) • Zeppelin Development began constructing the 20-acre TAXI development 2012: $21.00/SF (FSG) 24/7 NEIGHBORHOOD DENVER, CO $34.17/SF (FSG) • Voter passage of FasTracks and the construction of the RiNo Art district RESEMBLES SIMILAR 2016: WELL-KNOWN TRANSFORMATIONS IN TIMING: 2010/2011 DRIVING FORCES: • The ‘Big Dig’ project buried the elevated highway that had cut off the Seaport SEAPORT RENTS OTHER CITIES ACROSS DISTRICT from Boston 2007: $35.18/SF BOSTON, MA • Boston’s Mayor announced a plan to develop area into the ‘Innovation District’ THE COUNTRY. 2016: $59.33/SF • Headline tenant: Vertex Pharmaceuticals
TIMING: 2012 DRIVING FORCES: RENTS: • San Francisco’s Mayor established tax breaks for companies willing to move SOMA into SOMA SAN FRANCISCO, CA 2012: $53.00/S • Unique brick and timber product type along with outstanding access to 2016: $73.06/SF transportation motivated additional relocations • Headline tenants: Twitter, Yelp, Spotify and Zendesk
TIMING: 2012/2013 DRIVING FORCES: • “Restaurant Row” attracts award winning chefs and nightlife FULTON RENTS: MARKET • Soho House as catalyst to create defined neighborhood 2013: $21.74/SF CHICAGO, IL • Google & McDonald’s relocations to the neighborhood bookend ‘Traditional’ 2016: $42.00-44.00/SF and ‘Creative’ demand 27 MARKET OVERVIEW • Zoning changes foster great density RETAIL
Fulton Market currently consists of 470,500 rentable square of retail inventory, comprised almost entirely of ground floor space within the neighborhood’s low and midrise office and residential buildings. As the SKYROCKETING submarket has evolved into the most vibrant office, entertainment and residential neighborhood in all of Chicago, retailers have quickly taken notice. Over the last few years, several prestigious retailers have MARKET RETAIL opened shops in the neighborhood and their success is spurring others to join them. It was the Fall of 2015 when Fulton Market saw several fashion first-mov- RENTS ers into the area. Award Winning Designer Billy Reid opened his first Chicago location at 857 W Randolph. That same Fall, Maria Pinto, the Chicago designer known for outfitting Michelle Obama, set up a studio on Washington Street. Both retailers are reporting ro- bust sales with their Fulton Market locations being top performers in their respective chains. Other national retailers followed suit. In 2017, Free People, contempo- rary clothing brand that tailors to intelligent and cre- 2013 2017 ative women, executed a lease for an 8,000 square- $30.00 NET $90.00 NET foot, two-level store. Shortly thereafter, Anthropologie signed a lease at the corner of Morgan and Randolph for a 10,000 square-foot, two-level store. In that same building, Starbucks announced plans for an upscale, flagship store focused on its reserve coffees, the chain’s first such shop in Chicago. Lululemon plans to open its fifth downtown store in Fulton Market. Na- tional tenant Punch Bowl Socialrecently opened its 300% Rental Growth or 32% doors with a 60,000 square-foot, multipurpose ven- ue, which has been consistently packed. With the in- Compounded Annual Growth Rate (CAGR) creased tenant demand, investors and owners have responded by making significant capital investments to facilitate these growing number of users.
28 MARKET OVERVIEW Fullerton
Belden Janssen Southport Clark Lakewood Sheffield Magnolia Seminary Kenmore Fremont Halsted Clifton Bissell Dayton Racine Wayne
Webster
Dickens
Clybourn
Lincoln
Kingsbury Armitage Cleveland Larrabee Orchard Mohawk Burling Hudson Sedgwick Howe
Wisconsin
menomonee
Willow
Eugenie
North North
Burton Kingsbury
Elston Hudson Mohawk Sedgwick Larrabee Schiller Cleveland Halsted
Evergreen
Goethe
Evergreen Scott
State Scott Wells LaSalle Sandburg Dearborn
Division
Hickory Elm North Branch
Hooker Cedar
Maple Bliss Bellevue
Haines Oak Oak
Walton
Delaware Dewitt Chestnut Mies Van Der Rohe Mies Van Chestnut
Pearson
Milwaukee Halsted AWARD-WINNING BOUTIQUES DINING & RETAIL Lake Shore Drive CHEFS & Chicago & RETAILERS RESTAURANTS Superior
BRENDEN SODIKOFF Huron
Erie Rush State State Clark Wells Wabash LaSalle St Clair Orleans McClurg Franklin Franklin Michigan Dearborn Ontario Fairbanks
GRANT ACHATZ Ohio
Grand Grand
Illinois Hubbard
PAUL KAHAAN Hubbard
Kinzie Kinzie
M O D + ETHIC o Carroll FULTON ST: RETAIL CORRIDOR RICK BAYLESS
Fulton Wacker
Lake LakeLake
STEPHANIE IZARD SKYROCKETING Ogden RANDOLPH ST: RESTAURANT ROW 94 RETAIL RATES Randolph Randolph 90
Washington Washington
TONY PRIOLO Ada May Green Canal Peoria Racine Wacker Clinton Morgan Halsted Franklin Aberdeen Elizabeth Jefferson Sangamon Carpenter DesPlaines
Madison Madison Laflin Racine loomis
$30 PSF $90+ PSF throop 2013 ASKING RENTS 2018 Monroe Monroe State State Clark Wells Wells Wabash Wabash LaSalle Michigan Dearborn Dearborn Lake Shore Drive 29 MARKET OVERVIEW Adams Adams
Jackson Jackson
Van Buren Van Buren
290 Congress
Carroll Fulton
P
Green & Pine Line Station
Lake
Ogden Randolph French Market OGILVIE Washington STATION Ada May Canal Green Peoria Racine Clinton Halsted Morgan Jefferson
Elizabeth Aberdeen Carpenter DesPlaines Sangamon
Madison Monroe AMENITIES Racine
Aberdeen MAP Adams UNION Loomis STATION 2 Jackson Van Buren
30 MARKET OVERVIEW NEIGHBORHOOD MAP
31 MARKET OVERVIEW
DISTRICTS & EXPANSION AREAS Grand
Hubbard
Kinzie
Carroll
Fulton
Lake
Ogden
Randolph 94 90
Washington Ada May Green Canal Peoria Racine Clinton Morgan Halsted Aberdeen Elizabeth Jefferson Sangamon Carpenter DesPlaines
Madison Laflin Racine loomis throop
Monroe
Adams
Jackson
32 PROPERTY DESCRIPTION FULTON MARKET OFFICE RENTAL SUBMARKET TRENDS RATES
HIGHLY LIMITED SUPPLY OF COMPETITIVE NEW CONSTRUCTION OFFICE PRODUCT LOFT OFFICE PRODUCT $29.00 net to $34.00 net ($45.00 gross to $50.00 gross) Fulton Market is Chicago’s most supply-constrained neighborhood for vintage office buildings. Within Fulton Market there are just 15 EXISTING FULTON MARKET VINTAGE LOFT OFFICE existing vintage buildings totaling 1,200,000 SF. With extremely $32.00 gross limited existing supply and continually increasing tenant demand, it’s no surprise that vacancy within this Fulton Market vintage office This spread between new office product rents and existing office product is just 4% currently. product in the submarket illustrates the significant “runway” for future rental rate appreciation before new construction space NEW OFFICE DEVELOPMENT becomes a viable, cost-competitive option for most tenants. As office tenants have flocked to Fulton Market over the last several years, office developers have followed close behind and currently have 15 office projects representing 3,564,739 SF of space recently completed (since 2013), underway or planned.
FULTON MARKET FULTON MARKET VINTAGE OFFICE DEVELOPMENT LOFT OFFICE MARKET BY SINCE 2013 THE NUMBERS 3,564,739 SF
COMPLETED 736,294 SF TOTAL
UNDER CONSTRUCTION 1,028,026 SF
PLANNED/PROPOSED 1,800,419 SF
33 MARKET OVERVIEW Fullerton
Belden Janssen Southport Clark Lakewood Sheffield Magnolia Seminary Kenmore Fremont Halsted Clifton Bissell Dayton Racine Wayne
Webster
Dickens
Clybourn
Lincoln
Kingsbury Armitage Cleveland Larrabee Orchard Mohawk Burling Hudson Sedgwick Howe
Wisconsin
menomonee
Willow
Eugenie
North North
Burton Kingsbury
Elston Hudson Mohawk Sedgwick Larrabee Schiller Cleveland Halsted
Evergreen
Goethe
Evergreen Scott
State Scott Wells LaSalle Sandburg Dearborn
Division
Hickory Elm North Branch
Hooker Cedar
Maple Bliss Bellevue
Haines Oak Oak
Walton
Delaware Dewitt Chestnut Mies Van Der Rohe Mies Van Chestnut
Pearson
Milwaukee Halsted Lake Shore Drive
Chicago
Superior OFFICE TENANTS Huron CO-WORKING OPERATORS Erie Rush State State Clark Wells Wabash LaSalle St Clair Orleans McClurg Franklin Franklin Michigan Dearborn Ontario Fairbanks
Ohio Grand 23,000 SF Grand 70,000 SF PREVIOUS LOCATION: PREVIOUS LOCATION: RIVER NORTH LINCOLN PARK 23,000 SF Illinois PREVIOUS LOCATION: Hubbard 253,000 SF RIVER NORTH PREVIOUS LOCATION: FULTON MARKET/FAR WEST LOOP Hubbard 357,000 SF 38,000 SF PREVIOUS LOCATION: PREVIOUS LOCATION: Kinzie RIVER NORTH WEST LOOP Kinzie
77,000 SF PREVIOUS LOCATION: Carroll NEW REQUIREMENT 40,000 SF PREVIOUS LOCATION: RIVER NORTH Fulton Wacker 43,000 SF 23,000 SF Lake LakeLake PREVIOUS LOCATION: PREVIOUS LOCATION: RIVER NORTH RIVER NORTH
Ogden
Randolph 94 Randolph 19,000 SF NEW REQUIREMENT/ 90 EXPANSION IN MARKET
Washington Washington 45,000 SF
Ada 45,000 SF May Green Canal Peoria Racine Wacker Clinton Morgan Halsted Franklin Aberdeen Elizabeth Jefferson Sangamon Carpenter
21,000 SF DesPlaines PREVIOUS LOCATION: PREVIOUS LOCATION: EXPANSION IN MARKET NEW REQUIREMENT NEW REQUIREMENT Madison Madison 50,000 SF Laflin Racine loomis PREVIOUSthroop LOCATION: NEW REQUIREMENT/OUT OF STATE 52,000 SF Monroe Monroe NEW REQUIREMENT/ EXPANSION IN MARKET StateState Clark Wells Wells Wabash Wabash 12,139 SF LaSalle Michigan Dearborn Dearborn
500,000 SF PREVIOUS LOCATION: Lake Shore Drive Adams NEW REQUIREMENT Adams PREVIOUS LOCATION: OAK BROOK
Jackson Jackson
Van Buren Van Buren
34 MARKET OVERVIEW 290 Congress Fullerton
Belden Janssen Southport Clark Lakewood Sheffield Magnolia Seminary Kenmore Fremont Halsted Clifton Bissell Dayton Racine Wayne
Webster
Dickens
Clybourn
Lincoln
Kingsbury Armitage Cleveland Larrabee Orchard Mohawk Burling Hudson Sedgwick Howe
Wisconsin
menomonee
Willow
Eugenie
North North
Burton Kingsbury
Elston Hudson Mohawk Sedgwick Larrabee Schiller Cleveland Halsted
Evergreen
Goethe
Evergreen Scott
State Scott Wells LaSalle Sandburg Dearborn
Division
Hickory Elm North Branch
Hooker Cedar
Maple Bliss Bellevue
Haines Oak Oak
Walton
Delaware Dewitt Chestnut Mies Van Der Rohe Mies Van Chestnut
Pearson
Milwaukee Halsted Lake Shore Drive
Chicago
FAR WEST LOOP COMPLETED Superior FULTON MARKET CONSTRUCTION Huron 1000 3 5 Erie PLANNED 380,000 SF 175,000 SF OFFICE PLANNED PLANNED Rush State STERLING BAY State Clark STRUCTURED MANAGEMENT Wells Wabash LaSalle St Clair Orleans McClurg Franklin Franklin Michigan Dearborn OPTION (NOT OWNED) Fairbanks Ontario DEVELOPMENT 345 401 190,000SF 87,276 SF Ohio COMPLETED, UNDERWAY & 3 0 PLANNED OPENED 2014 1200 225,000 SF STERLING BAY PLANNED/PROPOSED PLANNED 1,010,000 SF 330 STERLING BAY Grand Grand PLANNED 652,000 SF LAMB PARTNERS PLANNED 310 STERLING BAY 269,697 SF 2,500,000 9 Illinois 1 PLANNED 1330 Hubbard 8 266,112 SF 500,000 SF (PROPOSED FOR 2021 DELIVERY) 11 OPENED 2015 MG&A 2,000,000 7 OPENED 2017 54,356 SF Oce 8,000 SF Retail Hubbard 6 3 1,500,000 25,603 SF 5 Kinzie 2018 360 Kinzie
TOTAL SF TOTAL 4 32 592,000 SF 1,000,000 105,611 SF PLANNED 3 PLANNED STERLING BAY NUMBER OF PROJECTS ASB CAPITAL 2 500,000 Carroll 05 1 77,104 SF 2018 0 0 2014 2015 2016 2017 2018 2019 2020 2021 1325 476,000 SF Fulton 16 20 TOTAL SF NUMBER OF PROJECTS Wacker PLANNED 1034 63,519 SF STERLING BAY 51,500 SF PLANNED PLANNED THOR EQUITIES STERLING BAY 1201 Lake LakeLake 150,000 SF 15 2019 210 220 Ogden 45,869 SF 90,000 SF 1,062,447 SF OPENED 2017 OPENED 2015 Randolph 94 Randolph COMPLETED 16 90 600,000 SF PLANNED SHAPACK PARTNERS Washington Washington 1 1 45,000 SF Ada May Green OPENED 2017 Canal Peoria Racine Wacker Clinton Morgan
1260 Halsted Franklin Aberdeen Elizabeth Jefferson Sangamon Carpenter
1,101,520 SF UNDER DesPlaines 452,000 SF PLANNED Madison Madison CONSTRUCTION JRG CAPITAL 210 160 Vendor Village 24,000 SF 201,938 SF PLANNED Laflin Racine loomis STERLING BAY throop 2019
Monroe Monroe
3,990,665 SF 120 00 State State
520,000 SF Clark Wells Wells Wabash Wabash LaSalle Michigan
500,000 SF 45,000 SF Dearborn PLANNED Dearborn 2018 2018 PLANNED/PROPOSED FARPOINT Lake Shore Drive Adams Adams
6,154,632 SF Jackson Jackson TOTAL Van Buren Van Buren
35 MARKET OVERVIEW 290 Congress HOTEL
Soho House, opened in August 2014, has become a staple in the neighborhood drawing Chicago’s who’s who in art, fashion, and tech world amongst others. Shortly thereaf- ter, luxury branded Nobu Hotel & Restaurant proposed an eight-story boutique hotel, with internationally-acclaimed Nobu Restaurant on the ground floor. The 159-key boutique Ace hotel, completed in 2017, has become a popular gath- ering place in the neighborhood. Hoxton Hotel, a 12-sto- ry boutique hotel, is currently under construction and will consist of 175 keys, a restaurant on the ground floor, two- floors of additional office and a rooftop deck.
SOHO ACE THE NOBU EQUINOX HYATT HOUSE HOTEL HOXTON HOTEL 145 ROOMS EXTENDED 40 ROOMS 159 ROOMS 182 ROOMS 83 ROOMS PLANNED/ STAY HOTEL OPENED 2014 OPENED 2017 PLANNED/ OPENING 2018 PROPOSED 200 ROOMS PROPOSED PROPOSED
36 MARKET OVERVIEW Orleans
HOTELS COMPLETED UNDER Grand CONSTRUCTION
PLANNED
Hubbard 311 N. MORGAN ST. 159 ROOMS
Kinzie 310 28 ROOMS & RESTAURANT Carroll 200 N. GREEN ST. 175 ROOMS
Fulton
725 W. RANDOLPH ST. 165 HOTEL Lake 370 APARTMENTS 113 N. MAY ST.
200 ROOMS 848 W. RANDOLPH ST. Ogden 119 ROOMS Randolph 94 90
Washington Ada May Green Canal Peoria Racine Wacker Clinton Morgan Halsted Aberdeen Elizabeth Jefferson Sangamon Carpenter DesPlaines
Madison 113 N. GREEN ST. 40 ROOMS Laflin Racine loomis throop
Monroe
Adams
37 MARKET OVERVIEW
Jackson RESIDENTIAL
The 2017 calendar year demonstrated how the rental hous- ing market has adapted to growing and shifting demand patterns towards smaller units with big amenities. Newer construction product has continued to elevate the mar- ket and create more options for renters, while also leading owners to compete aggressively on lease-up concessions. Class A and B rents grew 2.8% and 4.1% year-over-year, respectively. The downtown Chicago skyline still contains a notable number of construction cranes as several new high-rise office, hotel and residential towers are trans- forming the built environment. CBRE’s tracked 4,537 new apartment units delivered during 2016, with 7,792 project- ed during 2017, and another 5,362 units currently under construction that are projected to be delivered during 2018-2019. Appraisal Research Counselors still forecasts absorption of 2,800 during 2017 and 3,100 units during 2018. Employment levels are up, and several major employ- ers have chosen to relocate from the suburbs to the down- town market to attract a young, talented workforce who prefers to live and work in a walkable, urban environment.
38 MARKET OVERVIEW Wells Orleans Franklin Franklin
MULTI-FAMILY Grand
COMPLETED Hubbard DEVELOPMENT SITE PREP/UNDER CONSTRUCTION 170 N. GREEN ST. Kinzie 314 UNITS PLANNED 265 PARKING, 35,000 SF
1 2 00 730 W. COUCH PL. 263 UNITS Carroll 122 45 22 CONDO UNITS 227 UNITS MARQUETTE COMPANIES FOCUS DEV./ATLANTIC/CARLYLE 300 UNITS TARIS REAL ESTATE LENNAR DEVELOPER
Fulton 165 N. DESPLAINES ST. 1313 199 UNITS 1313 W. RANDOLPH ST. Lake 166 GERDING EDLEN 74 UNITS 235 UNITS JP MORGAN MCZ DEVELOPMENT Ogden 935 W. WASHINGTON ST. 358 UNITS Randolph 94 ZOM 630 W. WASHINGTON ST. 3-4, 20-22 N. ABERDEEN ST. 223 UNITS 54 UNITS 90 MARQUETTE/URBAN R2 MICHIGAN AVE RE GROUP
Washington 725 W. RANDOLPH ST. Ada May Green Canal Peoria Racine Wacker Clinton Morgan Halsted 165 HOTEL Franklin Aberdeen Elizabeth Jefferson Sangamon Carpenter 370 APARTMEDesPlaines NTS 1222 W. MADISON ST. Madison 2 42 UNITS (EXPANSION) FIFIELD COMPANIES 1 Racine loomis throop 1164 W. MADISON ST. 1050 492 UNITS
216 UNITS 120 UNITS Monroe FOCUS DEV./ATLANTIC/CARLYLE MICHIGAN AVE RE GROUP 20 11 S. GREEN ST. 845 W. MADISON ST. 167 UNITS Wells Wells Laflin 586 UNITS LENNAR/ARES THE JOHN BUCK COMPANY 24 Adams 73 UNITS 765 W ADAMS ST. NEWCASTLE 351 UNITS WHITE OAK/PRUDENTIAL 1515 W. MONROE ST. Jackson TBD UNITS 55 2,273 UNITS NEW COMPLETED 1061 289 UNITS SUPPLY SINCE 2009 601 W. JACKSON BLVD. 411 UNITS 0 Van Buren 190 UNITS 92.3% SUBMARKET OCCUPANCY 148 UNITS MOCERI/ROZAK LOUKAS DEVELOPMENT 1,609 UNITS UNDER CONSTRUCTION 290 1035 W. Van Buren 2,653 UNITS PROPOSED/ 308 UNITS 41 RELATED MIDWEST POTENTIAL SUPPLY 90 UNITS
39 MARKET OVERVIEW MIXED-USE RESIDENTIAL DEVELOPMENT
Over the last several years, the Fulton Market area has been undergoing While several older brick and timber loft buildings were converted to a significant transformation that has and continues to include a wide residential prior to the last recession, larger institutional development array of mixed-use development by both local and national institutional projects did not pick up steam until the past five years. Multifamily developers. As more and more developers have looked to “plant a flag” investors are now focused on the neighborhood to capitalize on in the Fulton Market, land values have skyrocketed, increasing from growing rents and tight occupancy levels. $100/land SF in early 2000’s to $900/land SF in 2016 (representing 14% compounded annual growth). As a result, it will be increasingly difficult TOTAL APARTMENT UNITS DELIVERED BY YEAR, SUBMARKET
to develop in this neighborhood. 4,000
The City of Chicago’s commitment to accommodating, promoting and 3,500 guiding the development of this area is illustrated by the city’s recent adoption and designation of both the Fulton Market Innovation District 3,000
and the Fulton-Randolph Market District, as summarized below: 1,251 2,500 1,859 2018 • DOWNTOWN EXPANSION AREA IN FULTON MARKET – The Chicago 800 216 2017 Downtown Zoning classifications and associated density bonuses have 2,000 444 265 2016 333 2015 been expanded to include part of Fulton Market 274 490 405 2014 1,500 227 1,096 • FULTON MARKET INNOVATION DISTRICT – Adopted by the Chicago DELIVERED UNITS 1,117 490 1,000 1,278 Plan Commission in July 2014, the Fulton Market Innovation District 854 993 plan is designed to coordinate ongoing development in and around the city’s last remaining market district. The plan is intended to coordinate 500 683 363 836 105 191 523 493 398 367 199 99 development patterns that balance the area’s historic role as a center for 198 270 148 71 59 75 82 food production and distribution, along with its more recent evolution EAST PARK PARK as a home to innovative industries, culture, nightlife and housing. This LOOP WICKER
area is generally bound by Hubbard Street, Halsted Street, Randolph LINCOLN LAKEVIEW OLD TOWN WEST LOOP WEST WEST TOWN WEST RIVER LOOP LAKESHORE RIVER WEST
Street and Ogden Avenue, and includes formal land use plans, general LOOP SOUTH GOLD COAST
design guidelines, assorted infrastructure and streetscape projects STREETERVILLE and a historic landmark component. CONDOS The West Loop/Fulton Market district is located within the boundaries • FULTON-RANDOLPH MARKET HISTORIC DISTRICT – The City Council of Chicago designated the Fulton-Randolph Market Historic District for Skinner West, drawing significant demand for larger two, three as a Chicago Landmark by ordinance passed in July 2015 and the and four-bedroom condo units in the neighborhood. Large personal ordinance and the designation became effective in September 2015. investments like this create stability in the neighborhood as owners become personally vested in the community. Skinner West is well The purpose of the designation is to recognize and preserve the regarded as one of the top schools within the Chicago Public Schools historic significance and importance of the Fulton-Randolph Market system and the state, and the only school in the Top 10 to permit District’s historic streetscapes and buildings, as well as to qualify them admittance to those living within the neighborhood boundaries in for historic rehabilitation incentives. There are contributing and non- addition to selective enrollment testing, creating a rare opportunity contributing buildings to landmarks. for parents to guarantee a strong public education in Chicago.
40 MARKET OVERVIEW INCOME & DEMOGRAPHICS
YOUNG, GROWING AND AFFLUENT NEIGHBORHOOD POPULATION The desire to both live and work in close proximity to the amenities available in Fulton Market continues to attract some of Chicago’s brightest and most affluent residents. A deeper dive into the demographics of the neighborhood points to a young and rapidly growing population with an abundance of discretionary income.
POPULATION GROWTH SINCE 2010 130%+ POPULATION GROWTH 3.11% SINCE 2000
OVER 80% 50% OF THE POPULATION HAVE A BETWEEN THE AGES OF BACHELOR’S DEGREE 25 AND 34 OR HIGHER PROJECT POPULATION 10% GROWTH 2016-2020
ALMOST 2,000 ABOVE BUSINESS EMPLOYEE OVER 50%+ $100,00 IN HOUSEHOLD INCOME 25,000 EMPLOYEES
41 MARKET OVERVIEW 53% 21% City of Chicago Other Suburbs
Commuting Patterns To Fulton Market 26% Suburban Cook
Both the Clinton & Morgan 21% GREEN stations are within OTHER SUBURBS LINE BOTH THE CLINTON Morgan minutesAND fromMORGAN CTA CTA Station COMMUTING PATTERNS TO PINK GREEN STATIONS ARE LINE 53% FULTON LINE 942 W Fulton CITY OF CHICAGO MARKET WITHIN MINUTES
PINK FROM 1229 W LINE 26% RANDOLPH SUBERBAN COOK
27
42 MARKET OVERVIEW CHICAGO OVERVIEW
LARGEST RD LARGEST MILLION ND METROPOLITAN 3 CITY IN THE USA 9.7 PEOPLE 22 AREA IN THE WORLD
43 MARKET OVERVIEW 47% CHICAGO 4.3m POPULATION WORKFORCE WITHIN ALMOST UNDER THE 500,000 100,000 BUSINESSES AGE OF 35 PEOPLE EMPLOYED IN THE CBD
34 + FORTUNE 500 400 52 HEADQUARTERS FORTUNE 1000 20TH HEADQUARTERS OF MAJOR HEADQUARTERS IN LARGEST GLOBAL IN CHICAGO OR CORPORATIONS CHICAGO ECONOMY IN THE WORLD NEIGHBORING CITIES
LARGEST US METRO 1ST RD FOR ECONOMIC INTERMODAL CONTAINER DIVERSITY 3HANDLER IN THE WORLD AFTER HONG KONG AND 34MEDIAN AGE – MOODY’S INVESTOR SERVICES SINGAPORE OF CHICAGO
NEARLY % OF THE PERCENT42 OF 40m 218 PEOPLE VISIT “FASTEST GROWING COMPANIES” THE AMERICAN IN THE UNITED STATES POPULATION CHICAGO ANNUALLY
44 MARKET OVERVIEW ECONOMIC OVERVIEW
METRO FOR CORPORATE INVESTMENT IN THE US 600 NEW OR #1 – SITE SELECTION MAGAZINE EXPANDING FACILITIES EITHER ANNOUNCED OR UNDER CONSTRUCTION, REPRESENTING 35 MILLION SQUARE FEET AND $10.5 BILLION IN INVESTMENT MOST IMPORTANT BUSINESS CENTER – GL OBAL BY MASTERCARD CENTERS OF #4 COMMERCE INDEX AMERICA’S BEST DOWNTOWN IN FORBES, CITING INCOMPARABLE MOST ECONOMICALLY ARCHITECTURAL VIEWS, SHOPPING, POWERFUL CITY IN RESTAURANTS, AND RECREATIONAL #4 THE WORLD OPPORTUNITIES – GLOBAL ECONOMIC POWER INDEX – RICHARD FLORDIA/MARTIN PROSPERITY INSTITUTE
MOST IMPORTANT CHICAGO WAS RANKED ONE BUSINESS CENTER OF THE MOST COST-EFFECTIVE CITIES IN THE – GL OBAL BY MASTERCARD CENTERS OF WORLD FOR DOING BUSINESS—AHEAD OF #4 COMMERCE INDEX LONDON, NEW YORK, AND BOSTON – KPMG’S GUIDE TO COMPETITIVE ALTERNATIVES
45 MARKET OVERVIEW CONTACTS KEELY POLCZYNSKI Senior Vice President +1 312 861 7870 [email protected]
CHARLIE SCHARF Client Services Specialist +1 312 935 1029 [email protected]
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