The Fulton Market District is considered a bright spot in central Chicago’s real estate landscape as commercial tenants and residents have leaked out of the Loop, but a recent transaction revealed shifting land values.
Sulo Development’s $30 million acquisition of a Sterling Bay-owned property in the district has set the stage for a three-tower condominium complex with up to 243 residential units — the largest condo project ever proposed in the area.
The vacant property at 1325 West Fulton Street sold for $400 per square foot, representing a profitable exit for Andy Gloor’s development firm, which acquired the nearly 2-acre site in 2014 at just $30 per square foot. But it’s a dropoff from pre-pandemic days when Fulton Market buyers were willing to pay $500 to $600 per square foot, justified by robust office demand, Crain’s reported.
Fulton Market still has some of the most-valuable land in Chicago, but Sulo’s price for one of the last large development tracts shows how the market has changed. The price is more in line with where land values are, due to interest rates, high construction costs, financing difficulties and carrying costs to get it entitled, said Scott Maesel, a broker with SVN Chicago Commercial who is active in Fulton Market but was not involved in the Sulo deal.
“It’s just reality,” he said.
The decision to sell, rather than develop the site, aligns with Sterling Bay’s divestment of certain Fulton Market holdings as it struggles with its Lincoln Yards development.
The firm is selling off a chunk of land at 1200 West Carroll Avenue, a 33,700-square-foot parcel at 370 North Carpenter Street, and a 48,000-square-foot development site at 345 North Aberdeen Street.
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Sulo is led by Dominic Sulo, who is also a Marcus & Millichap broker. The project would transform a parking lot into a trio of residential buildings rising 538 feet, 438 feet and 301 feet, according to a zoning application.
The project would take shape across the street from the 308-unit property at 220 North Ada Street, where development partners Shapack Partners, CRG and KMW Communities, started construction earlier this year on a 29-story apartment building.
— Andrew Terrell