Another Apartment Project Starts Amid Light Chicago Pipeline

A local development team pulled together nearly $100 million to build an apartment tower in the West Loop, one of the few major ground-up projects moving forward in Chicago’s otherwise sluggish multifamily pipeline.

A joint venture of Focus Development, Melrose Ascension Capital and DAC Developments scored $71.6 million in construction financing from CIBC and $23.9 million in preferred equity from Heitman, , Crain’s reported. The partners plan a 19-story, 287-unit building at 1221 West Washington Boulevard, just south of Fulton Market.

The $96 million package is a rare win in a market where high interest rates and rising costs have stalled downtown projects. The development was initially pegged at $100 million when proposed in 2021. Tim Anderson, CEO of Focus, said landing debt and equity wasn’t easy, but he said Chicago’s apartment fundamentals are compelling, as the market has strong demand and a lack of supply.

Designed with smaller-format units, the glass-and-brick tower will target renters priced out of Fulton Market’s luxury stock. Rents are expected to start at $1,800 a month. The project will also include 3,000 square feet of ground-floor retail and is slated for completion in late 2026.

The deal marks only the second major downtown resi development to secure financing in more than a year. Vista Property Group broke that drought in May with $173 million for a 31-story tower at 370 North Morgan Street. With deliveries thin until at least 2027, Class A landlords downtown are enjoying leverage: average net rents jumped 6.4 percent year-over-year in the second quarter, according to Integra Realty Resources.

Focus is a veteran Fulton Market player, having co-developed The Parker apartments and 167 North Green Street’s office tower. Its partners are also busy downtown: DAC and MAC recently started construction on a separate 19-story South Loop rental project with a joint $69 million construction loan.

For the West Loop, the tower adds to a neighborhood buzzing with office-to-residential conversions and corporate relocations. Anderson called Fulton Market “the most desirable neighborhood in Chicago right now,” a claim that lenders and equity partners appear to be warming up to.

— Eric Weilbacher