Author: Alby Gallun, Crain's Chicago
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The developers of a 29-story apartment tower in the Fulton Market neighborhood have put the "For Sale" sign up, even before taking the "For Rent" sign down.
A group led by Chicago-based Shapack Partners has hired CBRE to sell the Parker Fulton Market, a 227-unit tower at the southwest corner of Lake and Halsted streets that opened last summer.
Shapack and its partners, Northfield-based Focus Development and Atlanta-based Atlantic Realty Partners, are cashing out quickly, capitalizing on a downtown apartment market that has been on a roll but is losing momentum due to a historic construction boom that's increasing competition for tenants. Still, the developers are likely to pocket a hefty profit, based on the high prices investors have paid recently for new downtown apartment towers.
"It's a spectacularly designed and executed building," said listing agent John Jaeger, executive vice president in the Chicago office of CBRE. "I'm putting it in the top five assets in the (Chicago) market."
Jaeger declined to say how much he expected the property to fetch. Jeffrey Shapack, founder and CEO of Shapack Partners, declined to comment, referring calls to CBRE.
Other new luxury apartment buildings in downtown Chicago have sold for more than $500,000 a unit, and a few have fetched more than $600,000 a unit. The Parker has the added cachet of being on the edge of Fulton Market, arguably the hottest downtown submarket, with companies like McDonald's and Google moving in, bringing thousands of jobs—and potential renters—to the neighborhood.
Apartment developers have taken notice, with several projects in the greater West Loop either under construction or in the planning phase. But Jaeger pitches the Parker as a rare opportunity for investors, noting there aren't any other big new apartment projects for sale in the neighborhood—or likely to come on the market soon.
"I'm getting a lot of interest" from investors, Jaeger said.
The Parker isn't even full yet—it's 91 percent leased—but it has added tenants fast, at an average rate of 16 units per month, according to a CBRE marketing brochure. The average apartment in the building at 730 W. Couch Place rents for $3.27 per square foot, according to the brochure—high, but not high enough to rank the Parker among the top 10 most expensive downtown buildings.
It's unclear what the Parker cost to build. The tower's developers financed the project with a $57.8 million construction loan from J.P. Morgan Chase, Cook County property records show.
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