Demand for Downtown Chicago apartments continues to sink, but Pacific Reach Properties appears to have high hopes for the future.
The Vancouver-based developer wants to build a two-tower, 1,050-unit apartment complex in the West Loop, which would be the largest project of its kind in three decades, according to Crain’s. The development would rise on a 1.5-acre lot at 601-625 West Monroe Street.
Plans for the Presidential Towers complex consist of a 47-story building and a 40-story building, according to the report, citing an email from Alderman Brendan Reilly to constituents.
While suburban rentals have been in demand — homes sales in Chicago and the ’burbs have also surged since August — the Downtown market has been sputtering. The occupancy rate for Downtown apartments in the third quarter dropped to 87.1 percent from 93.8 percent from the same time last year. To keep tenants in their units and attract new ones, landlords slashed rents between 18 and 23 percent from the third quarter of 2019.
Some landlords are looking to get out. In mid-December, JDL Development and Harlem Living listed a 269-unit luxury rental near Wrigley Field for $125 million. The Lakeview property failed to sell about three years ago, when the duo last had it on the market.
And last month, Multi-Employer Property Trust Fund listed a 1,061-unit rental development in Streeterville, which is expected to trade for over $200 million.
But Pacific Reach is doubling down after acquiring the Monroe Street property in 2018 for $28 million, according to the report. The seller had been a group led by developer Steve Fifield, whose plans to build a 75-story office tower there fizzled. Now, the Downtown office market is in even worse shape than the rental market.
Pacific Reach made its first multifamily purchase in Chicago in late 2018 when it bought the 265-unit Linea apartment tower in the Loop for $121 million.
Its portfolio includes over 1,800 apartment units, 1.4 million square feet of commercial real estate, and 1,215 hotel rooms in Canada, Los Angeles and Phoenix, according to its website. [Crain’s] — Alexi Friedman