Skip to main content
All Press ReleasesChicago Market

Fifield to Buy, Expand West Loop Apartment Building

By September 13, 2015February 26th, 2021No Comments Categories:  All Press Releases   Chicago Market   

December 26, 2012,  By Alby Gallun, Crain’s Chicago Business – Just days after pulling off the biggest downtown apartment sale of the year, Chicago developer Steven Fifield is pouring some of the proceeds from that deal into his next one: the acquisition and expansion of a 58-unit apartment building in the West Loop.  Mr. Fifield said he is paying $20 million, or about $345,000 a unit, for Mod, a five-story condominium-turned-apartment building at 1222 W. Madison St. The sale includes a parcel next door, where Mr. Fifield plans to build another 44 apartments.  The transaction will generate a fat profit for the seller, a Sam Zell-backed venture that paid $13.3 million for the property about two years ago.  “It gives us an opportunity to keep our money in Chicago in another apartment deal,” Mr. Fifield said. “We believe that multifamily is going to continue to stay strong.”

Mr. Fifield expects to complete the acquisition Thursday, about a week after closing on the $302 million sale of Alta at K Station, an 848-unit apartment complex he developed at 555 W. Kinzie St. The Alta transaction was the biggest apartment sale in downtown Chicago since May 2011. Another Fifield development venture is building K2, a 496-unit tower just west of Alta set to open next April.   Prices of downtown apartment buildings have surged the past two years amid rising occupancies and record-breaking rents, spurring a development wave that will add about 4,700 units to the downtown market over the next two years. While big downtown high-rises have attracted a lot of attention, a boom of smaller projects in the city’s neighborhoods is also under way.

A venture including New York-based private-equity firm Area Property Partners, for instance, has converted a warehouse at 1313 W. Randolph St. into 70 apartments. And Northbrook-based Michigan Avenue Real Estate Group plans a 52-unit apartment building near the United Center and an 81-unit building in the West Loop, about two blocks east of Mod.  Overbuilding isn’t a concern yet because most of the projects are too small to have a major impact on the market, said Ron DeVries, vice-president at Appraisal Research Counselors, a Chicago-based consulting firm.  “It’s competition but it’s on such a small scale,” he said.

Mr. Fifield said he has hired Pappageorge Haymes to design the addition to Mod, which will include a business center and about 3,000 square feet of retail space. He aims to start construction in the spring, with the first residents moving in in summer 2014.  Mr. Fifield is buying Mod from Randolph Street Realty Capital, a Chicago-based investment firm founded in 2009 by two former executives at Equity Residential, the apartment real estate investment trust founded by Mr. Zell. The firm teamed up on the acquisition with the Zell Credit Opportunities Master Fund L.P., an investment fund formed by the billionaire investor in 2009.  A Randolph executive and a Zell spokeswoman did not return calls.