Chicago—The grand opening of Chicago’s Luxe on Madison Phase II went off with scarcely a hitch, despite skies opening for a spring deluge at almost exactly the same hour.
Luxe on Madison is a 102-unit luxury rental building at 1222 West Madison Street in the West Loop. Among 125 celebrants at the grand opening were officials of Chicago-based owner Fifield Cos., building residents and community partners. Complete with refreshments and live entertainment, the ceremony was held in the building’s community room.
Luxe on Madison was built in 2009 as a condominium building, and subsequently converted to apartments. Owner Fified Cos. acquired the building three years ago.
Luxe on Madison Phase II improvements, completed this spring, included the addition of 44 units; a 76 percent increase in the building’s apartment stock; a roof deck with dog run; street level landscaping; and additional attached, covered semi-heated parking spaces.
Among the features and finishes of residences are: 10-foot ceilings, oversized windows, plank flooring, quartz countertops, stainless steel appliances, large private patios or balconies and master bedroom walk-in closets in select units. Building amenities include a resident lounge, screening room, computer lab, conference room with presentation screen, fitness center, package room and Wi-Fi in common areas.
“When we bought it, it had 15,000 square feet of excess land that allowed us to add another 44 units, and that was actually one of the reasons we bought the building,” Fifield Cos.’ CEO Steve Fifield told MHN. “When we bought the original building, we paid just a tad over $20 million. And we had several bidders right below us.”
Upon purchasing the property, Fifield Cos. immediately set out to design an addition that would tie directly into the existing building. “We thought if we were going to increase the building to 102 units, we wouldn’t lease the commercial space, but convert it to public space with a theater, board rooms, business center, viewing lounge and management space,” Fifield said. “If we wanted top market rates, we decided, we needed to give people amenities. We wanted to distinguish ourselves from the competition.”
It proved to be a fortuitous move. When Fifield Cos. bought the building, it fetched $2 a square foot in rents. Three years later, it is generating rents of $2.85 per square foot.
Fifield Cos. received a 6.5 percent free-and-clear return on the addition, about what might be expected when building a new addition at cost, Fifield said. He added his company moved a 5 cap rate purchase up to 6.25 with the addition.
One of the hurdles Fifield Cos. faced in creating the addition was having to appeal to three different West Loop neighborhood groups, which were inclined to resist the idea of bringing additional rental units to an enclave that has recently been characterized by condominiums. Another obstacle involved construction. “We found if we were to build five stories, we’d have to do Type I high-rise construction, so we dropped it down to four stories,” Fifield said. “That way, we could do Type III construction, which helped to rationalize our numbers.”
When weighing the decision to incorporate an addition, there were few downsides. “One of the compelling considerations was that when the building was 58 units, we had to have a part-time manager and part-time engineer,” Fifield said. “When we made the building 102 units, it justified moving up to a full-time engineer and full-time manager.”
The outstanding nightlife and dining of Randolph, Fulton and Madison Streets is within steps of Luxe on Madison. Also close by are city parks, grocers, and the CTA’s Green, Pink and Blue Line trains as well as the No. 20 Madison Street bus line. The taste-tempting flavors of Greektown are just about four blocks east, while a few blocks to the west can be found the United Center, home to the Chicago Blackhawks NHL team and Chicago Bulls NBA team.
Luxe on Madison features more than 7,000 square feet of ground-floor retail space, housing Pinot’s Palette, Pure Dental Spa and Talay Chicago.
Rents extend from $1,690 to $3,355 for studios up to three-bedroom units.