Pearlmark Invests $22M in Luxury Chicago Project

The company provided the preferred to a well-known national developer for an upcoming mixed-use project.
A rendering of Related Midwest's 1035 West Van Buren in Chicago

A rendering of Related Midwest’s 1035 West Van Buren in Chicago

Chicago–Local investment firm Pearlmark has completed a $22 million preferred equity investment for the development of a luxury residential and retail project in the West Loop submarket of downtown Chicago.

The 30-story mixed-use development, to be known as 1035 West Van Buren, will be the work of Related Midwest, and will include 300 apartment units and 20,000 square feet of amenities, 12,800 square feet of which will be retail. In February 2015, it was announced that Related acquired the site and New York-based architect Morris Adjmi revealed the tower’s design, but the project just broke ground this April.

Pearlmark Real Estate originated the investment in the property on behalf of Pearlmark Mezzanine Realty Partners IV (Mezz IV) and Newport Beach-based insurance company Pacific Life. Mezz IV, the firm’s exclusive investment vehicle, announced its initial closing in June 2015, and provides borrowers mezzanine debt solutions for refinancings, recapitalizations, acquisitions and selective development projects.

This development particularly attracted Pearlmark because the West Loop is “one of the most popular downtown neighborhoods in Chicago, with an ideal location relative to the Loop and a variety of amenities,” said Mark Witt, managing director of Pearlmark who arranged the transaction. He added that, “this project offers us the opportunity to invest in a new apartment project with a strong sponsor in an ideal location that is continuing to attract young professionals who want to live and work downtown.”

In addition to this transaction, Mezz IV is targeting a wide range of U.S. commercial real estate assets, seeking to generate a 10 to 12 percent net internal rate of return to limited partners over a three- to five-year investment holding period.

1035 West Van Buren is in close proximity to several major employers, including the University of Illinois-Chicago, Rush University Medical Center, and the new Google regional headquarters in the nearby Fulton River district.

Related Midwest is certainly keeping busy in the Windy City, with its recent appointment as the master developer of a 62-acre site in Chicago’s South Loop.

Rendering courtesy of Related Midwest/Morris Adjmi