The Real Deal New York

Related Midwest and JDL plan four Chicago skyscrapers, Dropbox signs largest lease in San Francisco’s history, and more…

National market report
By Dennis Lynch | November 01, 2017 10:00AM

Chicago: Related and JDL plan four skyscrapers outside Chicago’s Loop

Related Midwest and JDL Development each submitted zoning plans to the city for major towers outside Chicago’s downtown Loop neighborhood, according to the Chicago Tribune. The projects further cement developer confidence in neighborhoods outside the city’s central business district.

The Loop

Related Midwest is planning what would be the two tallest towers in the Fulton Market district: a 58-story residential and hotel tower and a 51-story residential tower on adjacent blocks just west of Interstate 90. Related is applying for 270 residential units, 165 hotel units and 150 parking spaces. Its other building will have 300 residential units, 220 parking spaces and ground-floor retail.

The projects are significant for Fulton Market, which mostly has low-rise former manufacturing buildings. Google moved its Midwest headquarters to the increasingly popular neighborhood  in 2015 and has since been followed by Dyson and McDonald’s.

Meanwhile, Chicago-based JDL Development is planning a 76-story and a 45-story tower connected by a nine-story retail base. The project, One Chicago Square, is being developed on a former Archdiocese of Chicago parking lot north of the Loop. In total, the development will have 45,000 square feet of office space and 659 parking spaces. At 1,011 feet, the 76-story tower would be the sixth-tallest in the Windy City if approved. Altogether, JDL’s project could contain as many as 914 luxury units, according to the Tribune.

The Exchange in San Francisco

San Francisco: Dropbox inks largest lease in city’s history

The cloud storage giant Dropbox inked the largest lease in San Francisco’s history in October, signing a deal for the entirety of a 736,000-square-foot office complex in Mission Bay, according to the San Francisco Chronicle.

The complex, dubbed the Exchange, is being developed by Kilroy Realty Corporation for $570 million and
was marketed toward tech firms from the start. The Exchange is one building, but designed as four masses ranging from five to 12 stories, each with distinct architecture. The space is more than twice the size of Dropbox’s existing footprint in the city, around 297,000 square feet.

Kilroy CEO John Kilroy said it is “exactly what the modern tenants want: bigger floor plates, higher ceilings, lots of light, and rooftop decks everywhere.”

Dropbox is the second massive tenant Kilroy has secured for its many developments in San Francisco this year, which are mostly targeting at the tech sector and located in and around the Mission Hill neighborhood. The firm leased all of its 400,000-square-foot office building at 100 Hooper Street, which is less than a half mile from the Exchange, in February. Software company Adobe Systems took the majority of the space — around 314,000 square feet.

The Exchange is still under construction, and Dropbox will move into the property in three phases starting at the end of 2018, according to the Chronicle.

Chatham Park

Pittsboro: North Carolina developers plan $800M mixed-use community

A small town outside of North Carolina’s capital, Raleigh, is getting a massive $800 million mixed-use, master-planned development, according to the Triad Business Journal.

North Carolina-based firms Montgomery Development and Lee-Moore Capital are planning the Mosaic in Pittsboro. It will be built over three phases and eventually encompass 350 acres as part of the much larger Chatham Park master-planned community, making it one of the largest developments in Chatham County history.

The first phase is a 44-acre, $140 million “entertainment and lifestyle destination” that is scheduled to break ground next spring. There will be 200,000 square feet of retail and restaurants, a 120-key hotel, 335 apartments, 88,000 square feet of office space and public amenities including a 2-acre green space and amphitheater.

As of mid-October, the developers had not secured all of the financing for the project. Lee-Moore CEO Kirk Bradley told the Triad Business Journal there was “no question” the team would have to do “a lot” of preleasing before it can close on financing.

The Mosaic site is about an hour’s drive from Raleigh. The developers are referring to Mosaic as the “gateway” to Preston Development’s 7,100-acre mixed-use Chatham Park project. Chatham Park will altogether encompass 22,000 residences and 22 million square feet of commercial and education space geared toward medical and tech companies. The nearby University of North Carolina was the first to open an outpost there in 2016 with a 25,000 square-foot medical office.

Atlanta: CIM scoops up major downtown redevelopment site

An LLC reportedly connected to CIM Group paid $25 million for the 406,000-square-foot former home of commercial  shipping company Norfolk Southern. It’s one of the largest redevelopment opportunities in downtown Atlanta, the Atlanta Business Chronicle reported.

The site sits on the edge of CIM’s $1 billion mixed-use development around Philips Arena. The stadium, home to the National Basketball Association’s Atlanta Hawks, is undergoing a major renovation. The Norfolk Southern property is also less than half a mile from the Mercedes-Benz Stadium, the new home of the National Football League’s Atlanta Falcons.

CIM co-founder Richard Ressler is the brother of Hawks owner Tony Ressler, who has long talked about redeveloping the downtown area around the stadium, local sources told the Saporta Report. Meanwhile, Falcons owner Arthur Blank is reportedly interested in collaborating with Tony Ressler on the overall redevelopment of downtown around their respective facilities, calling his plan “very aggressive” following a presentation to an elite group of Atlanta’s business leaders in September.

The Norfolk Southern building itself is a slim, 105-year-old eight-story former office building that could be repurposed for a number of uses, although CIM did not return requests for comments on its connection to the purchase or its plans for the building.