One of the busiest developers in Chicago’s fast-changing Fulton Market said it is close to breaking ground on a 433-unit multifamily tower, one of several long-planned projects that are expected to significantly increase the former meatpacking district’s population in the years to come.
Fulton Street Principal Alex Najem said his firm and its investors are close to finalizing construction financing for the 32-story project at 1201 W. Fulton, with plans to start building in June.
Partners in the more than $200 million project include Shanna Collective and Weldon Development.
Najem declined to comment on the lender or the value of the loan, but he said the developers are closing in on financing on a project they initially had hoped to launch by late 2024.
If the project starts soon as expected, it will be one of relatively few major multifamily projects underway in Chicago despite favorable conditions. Chicago’s rent growth has outperformed most of the country amid the historically low development pipeline.
But higher borrowing and construction costs nationally and local challenges such as worries about property taxes have caused many lenders and major investors to stay on the sidelines.
Najem said the project at 1201 W. Fulton is moving forward in large part because of the vision and financial commitment of Shanna Khan, an equity investor in and designer for Fulton Street projects in the neighborhood.
“The issue with development in Chicago has been needing investors to believe in Chicago,” Najem said. “She’s been a big believer in Chicago and Fulton Market. That has allowed us to do deals in an uneasy market.”
Khan is the daughter of Shadid Khan, owner of the NFL’s Jacksonville Jaguars and automotive parts manufacturer Flex-N-Gate.
Busy developers
Her firm’s other projects with Fulton Street include The Fulton, a project that includes a large, ground-up office building at 919 W. Fulton that will connect to a historic former Schwinn bicycle factory at 212 N. Peoria St. That building, which is being converted to modern offices for tenants including Coca-Cola, recently signed Paris-based fashion designer Rick Owens as the neighborhood’s first ultraluxury retailer.
Groundbreaking for the office building at 919 W. Fulton stood out amid a near-standstill of U.S. office development in 2023, after the developers landed $233 million in construction financing. The project is expected to be completed around June, the same time Shanna Collective and Fulton Street hope to kick off the multifamily tower a few blocks to the west.
Real estate investor Harrison Street is moving its headquarters to 919 W. Fulton. Retail tenants will include Gibsons Restaurant Group and the Equinox fitness chain.
Shanna Collective, Fulton Street and Weldon Development also plan a larger, two-tower multifamily project at 1200 W. Fulton in a later development phase.
Fulton Market has undergone major changes over the past decade-plus, with office, hotel and residential towers now commonplace.
The neighborhood emerged as the fastest-growing urban office market in the country in recent years, according to a CoStar analysis, and the roster of retail tenants is expected to broaden in the next few years.
Chicago pipeline
Thousands of residential units are expected to be added in and around Fulton Market in the next few years.
Many multifamily developments underway in Chicago now are conversions of office buildings to residential or smaller ground-up projects than the ones proposed by the Fulton Street ventures.
Last year, local developer and construction firm Focus began building a 19-story, 287-unit apartment tower along the southern edge of Fulton Market along with partners DAC Development and Melrose Ascension Capital.
That project is backed by $95.5 million in construction financing.
Northeast of Fulton Market, Chicago firms Third Coast Real Estate and ZSD recently secured $44.1 million in construction financing for a 149-unit building at 310 W. Huron St. in River North.