Sep
13

Block 37 to Get Loop’s Biggest Apartment Tower in Decades

September 13, 2014
A rendering of the planned apartment tower above the Block 37 shopping center.

A rendering of the planned apartment tower above the Block 37 shopping center.

The owner of the Block 37 shopping mall downtown is gearing up to start construction on the biggest apartment tower the Loop has seen in decades, betting the white-hot rental market downtown has room to run.

CIM Group, the Los Angeles-based real estate firm that bought Block 37 two years ago, announced today it has secured initial permits to launch a 34-story, 690-unit apartment tower on top of the four-story mall across the street from the Macy’s department store on State Street.

The statement confirms a Crain’s report from March that CIM was preparing to launch a rental tower at Block 37, long considered one of downtown’s most snake-bitten properties.

Designed by Chicago architecture firm Solomon Cordwell Buenz & Associates Inc., the tower will be the largest apartment building by unit count the central business district has seen in years and the biggest rental structure in the broader downtown market since developer Steve Fifield completed the 848-unit Alta at K Station in 2010.

Apartment projects have been the real estate development industry’s investment of choice in recent years, as professionals and empty-nesters plunk down big sums to live in lavish new buildings close to jobs, nightlife and other amenities.

GLUT WORRY

Yet some observers worry that a glut looms, with 3,700 units expected to be delivered downtown next year and developers looking to add another 5,000 in 2016, according to data from Chicago consultancy Appraisal Research Counselors. With its big project at Block 37, CIM is betting otherwise.

“The residential tower is the last phase of the development program for Block Thirty Seven and helps to fulfill the city’s long-term vision for this pivotal State Street location,” CIM said in the statement. “The tower, positioned on the northern portion of the block, will offer sweeping city views, a fifth-floor amenity deck including an outdoor pool and spa, a rooftop spa and fitness center, and other top-tier resident amenities and services.”

In the Loop, CIM’s tower will compete with Chicago-based Related Midwest LLC’s 504-unit skyscraper at 111 W. Wacker Drive and Chicago developer John Murphy’s plans to convert an office building just north of Block 37 into rentals.

CIM executives were unavailable for comment this morning. A spokeswoman for the company declined to comment beyond the statement announcing the tower.

CIM, which counts big pension funds like the California Public Employees’ Retirement System as its backers, invests in a broad range of commercial real estate, focusing on deals in cities.

In 2012, the firm acquired Block 37 for $84 million and bought the development rights above the mall itself. Since then, CIM has focused on adding retail tenants to the property’s 275,000-square-foot shopping area and kick-starting the apartment tower.

Note: The number of units in the planned apartment tower has been corrected.

This story originally appeared on ChicagoBusiness.com on Sept. 11, 2014.

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