Talks Underway on Northbrook Development Site, Still No Offer

September 05, 2012

North Development site A 14-acre development site at Skokie Boulevard and Dundee Road may soon be sold to a local venture that wants to build apartments and retail outlets on the foreclosed real estate in Chicago property that sits just west of the Edens Expressway. The Chicago-based Morningside Group and Schaumburg-based Crossroads Development Partners, LLC are currently in talks over potentially taking over the property, though nothing has been finalized yet.

Morningside group has had a busy year. The company recently completed a 60-unit condo project in Des Plaines and started construction on a 306-unit apartment development in Wheaton. Crossroads Development has also been actively buying property. The company acquired a Rosemont office building for $10.8 million last May.

Originally the site belonged to developer Ed Renko and was supposed to be the spot for a $150 million complex with condominiums, retail outlets and a hotel. When the real estate market crashed, the project never formalized and a South-Dakota based lender filed a $27 million foreclosure suit in 2008. It wasn’t until July 2011 that Bank First took possession of the property through a sheriff’s sale.

Some investors have been picking up failed developments at cheap rates during the past few years, but it is still challenging to obtain financing for projects unless they are in top-notch locations. The only exception to this is apartment construction and many developers have started new residency projects in the Chicago area. According to Appraisal Research Counselors, a Chicago-based consulting firm, nine suburban projects totaling 1,620 units are currently under construction.

Rents at North Shore apartment buildings have risen 12.8 percent in the past year, and the largest gain occurred in suburban submarkets. Currently there is a lot of demand in the Chicago area for more luxury rental housing, especially since many residents aren’t interested in condominiums and need an alternative to more expensive single-family homes. Several proposed developments in the northern suburbs include a 290-unit complex in Glenview and rental properties in Vernon Hills and Wheeling.

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