Skyscraper lot near Grant Park for sale

Danny Ecker is a reporter covering commercial real estate for Crain's Chicago Business, with a focus on offices, hotels and megaprojects shaping the local property sector. He joined Crain’s in 2010 and previously covered the business of sports, as well as the city's convention and tourism sector.

The developer of the city's tallest apartment building has put a vacant lot next to it up for sale, an offering that could tee up the development of another residential tower rising just as high, and with as many as 621 units at the southwest corner of Grant Park.

Miami-based Crescent Heights has hired the Chicago office of CBRE to court buyers for the 43,123-square-foot site at 1201 S. Michigan Ave., according to a marketing flyer. The parcel is adjacent to Nema Chicago, the 76-story skyscraper that Crescent Heights completed in 2019 and stands as the tallest all-rental unit building in the city. A new tower at 1201 S. Michigan could rise as high as 900 feet — close to the same height as Nema — under the property's current zoning, the flyer said.

The offering will test how developers feel about a downtown apartment market that has proven to be resilient in the wake of the COVID-19 pandemic. High rents and occupancy at apartment buildings in the urban core have been a bright spot while many commercial properties in the central business district struggle from a lack of regular foot traffic in office buildings.

But keeping that balance of supply and demand will require some moderation from developers, which are already projected to add 3,700 new units downtown in 2024 — the most for a single year since 2017, according to appraisal and consulting firm Integra Realty Resources. Less than two blocks north of Crescent Heights' site, a 73-story, 738-unit apartment tower under construction at 1000 S. Michigan Ave. is expected to get its first tenants next year.

CBRE is playing up the 1201 S. Michigan site as a rare chance to build a residential high-rise overlooking Grant Park. A project could include a single tower or two of them built in phases, the flyer said.

The flyer also points to the success of the 800-unit Nema Chicago next door. Crescent Heights landed a $340 million mortgage from KKR Real Estate Finance Trust to pay off its $328 million construction loan before the tower was completed. Then in 2021, KKR added $65 million in mezzanine debt, underscoring the property's high value.

The flyer does not include an asking price for the 1201 S. Michigan site, which is within the sprawling Central Station project that has been developing with residential buildings south of Roosevelt Road over the past three decades. Crescent Heights has owned the Michigan Avenue property since 2012, when it bought the site along with the adjacent land on which Nema Chicago was built.

That acquisition came a year after the developer bought the apartment tower across the street at 1212 S. Michigan Ave., which it ultimately sold in 2018.

A Crescent Heights spokesman did not respond to a request for comment.

New supply coming to the market hasn't scared off other developers from joining the apartment party. Canadian developer Onni Group recently proposed 2,500 rental units next to the riverfront site where Bally's plans a massive casino and hotel complex. That's on top of the 2,600-unit apartment project Onni plans to begin soon across the Chicago River on the southern tip of Goose Island.

Crescent Heights is looking to sell its Michigan Avenue site as it plans another high-rise in the Fulton Market District. The developer paid $34 million this year for a full-block development site at 420 N. May St., where it has proposed a 52-story apartment tower that would be the tallest building in the trendy former meatpacking corridor.

CBRE Vice President Tom Svoboda is marketing the 1201 S. Michigan site on behalf of Crescent Heights.

Danny Ecker is a reporter covering commercial real estate for Crain's Chicago Business, with a focus on offices, hotels and megaprojects shaping the local property sector. He joined Crain’s in 2010 and previously covered the business of sports, as well as the city's convention and tourism sector.

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