The developer of 795 units in two new South Loop luxury condominium towers overlooking Grant Park is forging ahead despite the turbulence in real estate markets around the country and softening demand in Chicago.
Gerald Fogelson, co-chairman and chief executive of Central Station Development Corp., is seeking final design approval for the project. Fogelson said that if the city and community sign off on the altered design, he hopes to start marketing one of the towers in the first quarter of 2008.
"Of course, we know that overall sales will be less than in the heyday of 2005, 2006, but still there will be many condos sold," Fogelson said. "We'll get a large proportion of a smaller market."
As of midyear, before problematic U.S. housing loans roiled financial markets worldwide, sales of new downtown Chicago condominiums had fallen 35 percent compared with the year-earlier period, and prices were flat, said Gail Lissner, a vice president at Appraisal Research Counselors, a Chicago-based real estate appraisal and research firm.
Fogelson's 73- and 83-story towers are part of the 80-acre Central Station development, whose plans call for 8,000 units. So far, about 5,300 units have gone into development or been completed since 1990, when the city first approved the mix of flats, townhouses, parking and retail that helped revive the South Loop housing market.
"Central Station has been a dominant driver of residential development in the South Loop," Lissner said. "It introduced luxury there that's within the reach of a relatively broad market."
Fogelson this month filed a request asking the city to allow each Grant Park tower to be an extra 100 feet high, not to add square footage or more units but to make the buildings taller and thinner, he explained. Together, the towers will have about 2.2 million square feet.
Luxury developers favor sleek, slender designs because the buildings look more graceful than their boxier predecessors. There's also a business rationale: Fewer units per floor maximizes the views of each condominium, thereby raising their value.
On Oct 4., Fogelson will present the proposed new design at a 2nd Ward community meeting to be held at Roosevelt University starting at 7 p.m.
By the end of the year, he hopes the City Council will give its final OK on the thinner, taller design.
The 73-story high-rise, called Grant Park Tower III, is likely to begin preconstruction sales in the first quarter of 2008.
Prices for the 398 units in the tower, designed by Chicago-based Pappageorge/Haymes Ltd., will range from about $400,000 to $2.3 million, or $475 to $650 a square foot, Fogelson said.
He declined to give construction or total development costs.
The tower will be the third high-rise to be built along the south end of Grant Park by the Central Station team, a joint venture of Chicago-based Fogelson Property LLC, the Enterprise Cos. and Cleveland-based Forest City Enterprises Inc.
Bordered by Roosevelt Road, Michigan Avenue, 13th Street and Indiana Avenue, the high-rises offer views of the lake and proximity to the museum campus and to Michigan Avenue attractions.
By 2009, given appropriate market conditions, preconstruction sales might start for the larger tower, called Grant Park IV, said Fogelson.
INSIDE COMMERCIAL REAL ESTATE