Mike Whalen used his banking connections to secure a $48 million construction loan amid a rocky lending climate, paving the way for a redevelopment project next to Lincoln Yards.
With the financing in hand, a joint venture between Whalen’s Heart of America Group and local apartment broker Jon Morgan is moving forward with the conversion of a 110-year-old industrial building into 121 apartments at 2032 North Clybourn Avenue, Crain’s reported.
In 2021, the venture paid $15 million for the 140,000 square foot building and the 35,000-square-foot parking lot at the site, which is the former headquarters of the Anixter Center, a Chicago nonprofit.
“It’s fun to take a turd blossom and turn it into something beautiful,” Whalen told the outlet.
Nearly two years after the land purchase, Whalen and Morgan can embark on their plan after attaining the loan from Iowa-based West Bank — a big win given today’s market conditions. High interest rates and a possible recession are making it tough for any developers to acquire adequate funds, as banks are reluctant to even take risks considered moderate a year ago. Increased construction costs have also stalled a number of projects.
Whalen, however, was able to take advantage of already established connections with West Bank to secure the loan. Plus, apartment demand remains strong in Chicago, giving developers statistics to show lenders to ease concerns about issuing new debt.
Whalen and Morgan have worked together on other redevelopment projects in the past. They converted the 95,000-square-foot former lamp factory at 2065 North Southport Avenue into a mix of 56 apartments and offices. All of the apartments and 90 percent of the office space in the building is leased, Morgan said.
The North Clybourn and North Southport properties are both a stone’s throw away from Lincoln Yards — a $6 billion megadevelopment led by Sterling Bay that’s currently under construction.
“I think it’s going to be a monster game-changer when they get it done,” Whalen told the outlet.
— Quinn Donoghue
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