This is a surprising case, as apartments stand out as one of Chicago’s strongest real estate sectors, with few visible signs of financial distress. Meanwhile, many office buildings are struggling, especially along LaSalle Street, which has long been the heart of the financial district.In that matter, city officials and many developers Advertisement of office-to-apartment conversion Like that of 29 S. LaSalle as a major strategy to revive the famous street.
But the proponents of the idea cannot cite the project as a success story or as a sign that people are eager to live in the LaSalle Street apartment complex. The property, called Millennium on LaSalle, has an occupancy rate of just 72.2%, according to property data his provider CoStar Group.
“Unfortunately, Loop was hit hard during the pandemic and has not fully recovered,” said Russ Krivor, former CEO of DLC.
Krivor declined to discuss the foreclosure suit. He said he was no longer in charge of the property, but did not disclose who it was, citing a non-disclosure agreement.
Greenberg Traurig attorney Martin Keziola, who represents the development venture, declined to comment. Barings’ attorney, Holland & Knight’s David Fisher, also declined to discuss the foreclosure case.
The lawsuit, which was filed in Cook County Circuit Court in late December, adds to a growing list of foreclosure lawsuits involving buildings on and around LaSalle Street.The lender has applied for a foreclosure on the office property 30 N. Lasalle, 19 S. Lasalle When 105 W. Adams Street Other buildings facing loan problems include: 10 S. Lasalle, 1 N. Lasalle When 135 S. Lasalle. The most prominent symbol of street fighting, the Chicago Board of Trade Building at 141 W. Jackson Blvd. confiscated by the landlord.
The landlord of the LaSalle Street office has been going through difficult times since the pandemic began. Companies there have adopted hybrid work schedules, and some big financial anchors like Bank of America have relocated.
But the downtown condominium market fully recovered Rents hit a record high last year, and the lawsuit against Millennium over LaSalle’s estate has gotten even more unexpected. With the downtown office market facing an uncertain future, Mayor Lori Lightfoot LaSalle is looking to apartments as his street remedy. Last year, the city announced plans to convert the decrepit office buildings on and around the street into housing. The program includes tax-raised loans and other incentives for the developer to secure his 30% of units in converted buildings, making them affordable for low- and middle-income residents.
in December, Developer submitted 9 proposals 7 properties covered by the program. The city is scrutinizing the proposals, which include plans to redevelop the 43-story tower at 30 LaSalle North into 432 apartments and a 1.3 million-square-foot building at 135 LaSalle South for him. includes plans to redevelop 430 units of
When city officials pushed the program forward last fall, they cited LaSalle’s Millennium as an example of a successful conversion to apartments.
Planning and Development Deputy Commissioner Cindy Rubik said in a presentation to developers in October, “From our understanding and discussions with the building owners and the management there, we are leasing very well.
Some see Millennium’s failure at LaSalle as a sign that LaSalle’s apartment renovations aren’t going well, while others scrutinize for mistakes to avoid. DLC believed in the idea Back in 2015, when the building was purchased for $12.9 million. Designed by Jenney & Mundie, 29 S. LaSalle was known as the National Life Building when completed in 1902 and was later named after Barrister Hall.
However, DLC didn’t actually start the project until 2019 after securing a $73.5 million construction loan from Barings, according to the foreclosure complaint. According to the complaint, the load was changed twice, his in October 2020 and his in March 2021, but the documents don’t say how it changed.
Including interest and reserves, the DLC venture owes Barings $73.7 million, the lawsuit says.
Converting an office building into apartments is never an easy task. Cost overruns and construction failures may have contributed to the building’s current financial problems. DLC decided to add a pool and sports court to the roof of the building, but during that planning stage they realized that the building lacked a wind bearing system to support the improvement.
“To do that, we had to reinforce the building, which took a lot of work and money,” Rick Whitney of FitzGerald Associates Architects, the project’s lead architect, told Crain last fall.
Interestingly, the development venture only owns the building and not the land underneath. The lawsuit alleges that the company leases land from its owner, the University of Chicago.
Millennium on LaSalle will open in 2021 and its occupancy rate rose to 88.7% by the end of the year before dropping to 72.2% in the second half of 2022, CoStar said.
Rents for the building range from $1,700 a month for a studio apartment to $4,213 a month for the most expensive two-bedroom unit, according to CoStar. The average apartment rent is $2,382, or $3.18 per square foot. To attract renters, the building’s leasing agency is now offering her one-and-a-half months of free rent to a tenant who signs a lease on a particular unit.
Corrected address for 30 N. LaSalle St.