Chicago Conversion Project Gets $90M
A luxury community will take shape at the site of a century-old office landmark.
Partners Mavrek and ACRES Commercial Realty Corp. have secured more than $90 million in financing and are moving ahead with an office-to-residential conversion at 65 E. Wacker Place in Chicago, where they will create 252 luxury units at the historic 24-story building.
The team has also received a full building permit and is set to start interior construction at the property, which will be known as Wacker Place. The Committee on Zoning approved the adaptive reuse project late last year.
McHugh Construction will redevelop the property with a design provided by Pappageorge Haymes Partners. Completion is expected in 2026.
Chris Knight, managing director at JLL Capital Markets, represented the development team for the placement of the debt. The financing includes a $62.4 million senior loan from Derby Lane Partners and $11 million loan from Hoyne Savings Bank. The capital stack also includes more than $17 million in federal and state historic tax credits, which were monetized through PNC Bank.
Adam Piekarski, CEO of Derby Lane Partners, said in prepared remarks the property’s prime location in The Loop combined with its historic character and plans for modern amenities makes the asset well-positioned to capitalize on the strong rental demand. He also pointed to Mavrek’s track record as a developer and stated the firm was excited to continue its relationship with Mavrek and support transformation of the building. In July, a joint venture led by Mavrek refinanced The Saint Gerard, a newly built, 248-class A mixed-use property in the city’s Streeterville submarket with a $106.3 million senior loan provided by Canyon Partners Real Estate, LLC. JLL Capital Markets arranged the refinancing.
Rebuilding a landmark
Originally constructed as the Millinery Mart building in 1928 and later home to the Esquire magazine offices, the plans call for honoring the historic character of the building while introducing modern design elements and resident-focused features. Wacker Place will have a mix of studios, one- and two-bedroom residences with in-unit workspaces and expansive city views.
While the project will have 51 affordable apartments as required by the city, it is not seeking substantial municipal investment in exchange for additional affordable units, according to Chicago Yimby.
Amenities will include a coworking lounge, fitness center and rooftop deck overlooking the Chicago River. Morton’s The Steakhouse will continue to occupy the ground floor. The property is steps from the Chicago Riverwalk, Michigan Avenue, Millenium Park and major transit lines.
Windy City conversions
Wacker Place is one of several office-to-residential conversions taking place in Chicago. Chicago launched the LaSalle Street Reimagined initiative, aimed at repurposing vacant office buildings in its central business district and increasing affordable housing. The city is offering tax-increment financing and other incentives to encourage developers to tackle the adaptive reuse projects.
READ ALSO: Five Prominent Chicago Office-to-Residential Conversions
Five projects, including the first underway at 79 W. Monroe St., will share about $250 million in TIF financing and will add 400 affordable units to the city. The Monroe Street development, for example, will bring 117 apartments, 41 of which will be affordable to households earning up to 60 percent of area median income.
