DAC Development Lands Chicago Multifamily Construction Loan

Another South Loop apartment development is finally moving off the drawing board.

A joint venture of Chicago-based firms DAC Developments and Melrose Ascension Capital landed $69 million in construction financing from BridgeCity Capital to move forward on its long-planned residential tower at 626 South Wabash Avenue, the Commercial Observer reported.

The 19-story, 223,000-square-foot project will include 164 luxury apartments and ground-floor retail. The financing amounts to $418,000 per unit. Construction kicked off in April, two and a half years after the DAC and Melrose venture received its building permits.

The project was greenlit in late 2022 as a joint venture between DAC and Melrose, designed by Antunovich Associates to deliver a mix of studio, two-bedroom, and four-bedroom units.

Marketed largely toward students and young professionals, the apartments will feature rents ranging from $1,700 to $5,000 per month. Planned amenities include a rooftop pool, fitness center, coworking space, basketball court and a lounge, alongside a 73-space parking garage and 100 bicycle spots.

The lender was attracted to the deal based on strong demand for rentals in the South Loop and the track record of DAC president Daniel Rezko, who recently delivered a multifamily project at 808 North Cleveland Avenue in downtown Chicago, along with Melrose’s recent completion of a 17-story multifamily building at 633 South LaSalle Street, said EJ Ehrlich, senior analyst at BridgeCity.

Like Melrose’s LaSalle Street project developed in partnership with Singapore-based Q Investment Partners, the Wabash Street project with DAC will feature some individual bedrooms available for rent within a unit, rather than only offering full unit leases. The units will be a mix between traditional rentals and student housing, and include a total of 368 beds, Melrose said.

The Wabash site, a vacant lot tucked less than half a mile from downtown, sits near the CTA L tracks above South Holden Court and has long been seen as a key infill opportunity in the booming South Loop district.

With BridgeCity’s funding locked in, DAC and Melrose are set to push the project toward completion, joining a growing wave of high-rise residential development reshaping the South Loop skyline.

Rents in the South Loop submarket grew by 2.3 percent year-over-year in December, according to Cushman & Wakefield. Its inventory was at 9,960 units, with 93.8 percent occupancy, just above that of River North and the West Loop but below Streeterville and the New East Side.

Editor’s note: This story was updated to add details about the Wabash Street project.

— Judah Duke