The Real Deal Chicago

As developers cash in on Logan Square, one property owner has become the face of gentrification

Mark Fishman isn't the only one renovating apartments and hiking rents, so why is he vilified?
By Alex Nitkin | June 08, 2018 11:30AM

A sign during a rally against a Mark Fishman-owned property. M. Fishman & Co.’s apartment building at 2936 W. Palmer St. (Credit: Duettographics, Pixabay)

Most renters couldn’t identify the owner of their apartment, but for Mark Fishman, there’s no hiding behind a corporation. The landlord and his firm, M. Fishman & Co., have become the face of gentrification in fast-developing Logan Square. With a history of gobbling up properties and sharply lifting rents, he has raised the ire of the local residents who feel they are being priced out and pushed out of their neighborhood. Fishman is so well known that his name is posted on properties that don’t belong to him — and that aren’t even rentals.

“Yet Another Eternally Empty Storefront! … Thanks a lot, Fishman!” reads a sign taped to the window of Dunlay’s, a restaurant that recently closed after 13 years on the south edge of Logan Square’s main intersection. Fishman doesn’t own the building.

M. Fishman & Co. lists 27 Logan Square properties in its portfolio, but records suggest the developer owns many more buildings in the neighborhood, combining for hundreds of residential units. He’s renovated at least eight buildings since 2000, sometimes doubling rents after the work is finished, according to city property records, Real Capital Analytics and interviews with tenants.

His work in the neighborhood accelerated around 2013, when a wave of new interest from renters coincided with a sharp rebound in Near Northwest Side property values. Since then, the developer’s name has become synonymous in some circles with corporatization and displacement, and neighborhood groups have held regular public protests outside his Fullerton Avenue office, sometimes joined by local elected officials.

One rally, organized in October by the Logan Square Neighborhood Association, came after Fishman took over a 35-unit building at 2936 West Palmer Street and told its tenants he wouldn’t offer to renew their monthly leases. Instead, rents would be dramatically increased.

The acquisition “caught many families unprepared,” among them seniors on fixed incomes and students at nearby public schools, a spokesperson for the association told DNAinfo Chicago at the time. Tenants chanted and hoisted signs outside Fishman’s office in the rain. One sign read “Fishman, we need more time.”

Lesley Reynoso, a 21-year-old college student, had lived in the building with her parents for 17 years when they got word that a new owner would be taking over. A week later, a note slipped under their door informed them they would need to be gone by the end of the next month.

“We all knew each other in that building … some of us had been there for years,” Reynoso said. “And suddenly we were just all kicked out. It was heartbreaking.”

The building’s previous owner, an out-of-state property manager, had leased their one-bedroom unit for $550 a month, Reynoso said. After Fishman took over, the family moved to the Irving Park neighborhood, where they now pay about $1,300 in rent for a two-bedroom apartment.

Earlier this year, listings appeared on Fishman’s website showing studio and one-bedroom apartments at 2936 West Palmer, complete with gleaming hardwood floors and freshly-painted walls. Rents start at $1,050.

Reynoso and her family were not invited to rent a rehabbed apartment after the work was finished, she said.

Fishman keeps a low profile in the neighborhood, working from an office guarded by security cameras and rarely speaking to media. He declined to comment for this story.

Democratic state Rep. Will Guzzardi, who has lived in Logan Square for 10 years and represents the neighborhood, joined the rally outside Fishman’s office in October. He has sponsored legislation to overturn Illinois’ ban on rent control, saying public officials “need to step in and protect people from the rapacious greed” of developers like Fishman.

“My impression is that [Fishman] is engaging in a more aggressive and egregious version of what’s happening everywhere in the neighborhood,” Guzzardi said. “He engages in this behavior with little regard for the immediate consequences.”

But Fishman is hardly the only local property owner to make sharp rent increases.

Greg Whalen, a broker with Redfin who owns a two-floor apartment building in Logan Square, said he’s raised rents on his tenants by more than a third since 2011.

“As a personal strategy, I don’t ever try to raise rents on good tenants above what’s in line with the market,” Whalen said. “But that’s just what it was. The market dictates what happens.”

The median rent in the neighborhood shot up by more than 25 percent between April 2012 and April 2016, compared to a 16 percent citywide jump during the same period, according to data compiled by Zillow. At the same time, the median sale price of multifamily residential buildings in the area nearly tripled, from $152,000 to $420,000, according to Redfin.

A rent hike from $550 to $1,050 might give tenants whiplash, but it still may not meet the true value of most Logan Square apartments, according to Steven Livaditis, managing director of Essex Realty Group. Livaditis pegs the average rent for a one-bedroom in the neighborhood “well north of $1,500,” he said.

“For a long time in Logan Square, there were quite a few buildings that had a lot of deferred maintenance, and landlords who weren’t able to do anything about it were just collecting low rent,” Livaditis said. “So for someone to come in and make that improvement, they have to bring their economics up to par.”

Through three decades of acquiring and rehabbing multifamily complexes within walking distance of the Logan Square Blue Line station, Fishman is both riding and shaping one of the starkest transformations of a Chicago neighborhood in memory.

Since the Great Recession, Logan Square’s predominantly Hispanic residents have seen the area’s corner delis and taquerías vanish in favor of brewpubs and record stores, beacons for the city’s growing population of suburban-bred college grads.

“It used to be that when young people got a job in the city, they’d want to live in Wrigleyville,” said Ron DeVries, senior managing director at consulting firm Integra Realty Resources. “But as those areas get less affordable, the market is pushing them north and west.”

And despite a handful of luxury apartment complexes built in the neighborhood since 2016, new housing stock hasn’t caught up to the surge in demand, DeVries added.

In other words, the market is tilted squarely in favor of developers like Fishman, who bought his first property in the neighborhood in 1990.

It’s hard to know just how much equity Fishman has amassed over the decades, but one 45-unit walk-up at 1850 North Humboldt Boulevard offers a clue. Its appraised value more than quadrupled from $1.5 million in 2011 to $6.3 million in 2017, according to Real Capital Analytics.

And records show that Fishman refinanced at least 12 of his Northwest Side properties between October 2017 and February 2018 for a sum of more than $50 million, a potential signal that he’s getting ready to expand again.

Most of the buildings in his existing portfolio — brick courtyard complexes topping out at three or four floors — were built between 1910 and 1930, records show.

“If you’ve got an older building that hasn’t been touched in 20 years or more and somebody goes in and puts in new kitchen cabinets or re-does the floors, you could be looking at rent increases by $250 to $400 a month,” DeVries said. “It’s enough to really motivate developers to put that work in.”

In the past year alone, Fishman’s properties have become canvases for some of the neighborhood’s most visible changes.

An iconic yellow sign advertising “BEEF/PIZZA” was replaced with the sans serif logo of an Italian bistro after the latter moved into the Fishman-owned property at 2715 North Milwaukee Avenue this year. Another business, a celebrated mom-and-pop grocery called Half Italian, closed in March after a legal dispute with Fishman.

Rehabs and sharp rent hikes might be unpopular, but they’re fair game in a city whose housing stock is racing to reach equilibrium with demand, Whalen said.

“As long as jobs keep coming into the city, people are going to keep moving into these neighborhoods, and the people who own properties have the freedom to do what they wish,” Whalen said. “They took the risk of buying them, and if they want to [change] them, it’s going to happen.”

But Reynoso, who finds her childhood home less recognizable each year, said the “hype” driving up property values doesn’t necessarily mean it’s becoming a better place to live.

“They say they’re improving the neighborhood, but who are they improving it for?” Reynoso said. “There was nothing wrong with it before. All they’re doing is making it more expensive.”