Developer gets loan: 'It was like wrestling down a greased pig'

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Developer gets loan: 'It was like wrestling down a greased pig'

By: Alby Gallun
Crain's Chicago Business
A rendering of the project.

A joint venture led by the Marquette Cos. has broken ground on a 223-unit apartment tower in the West Loop after landing a construction loan for the project.

J. P. Morgan Chase & Co. provided a roughly $46 million loan to finance Catalyst, a 19-story tower at 630 W. Washington St., said Darren Sloniger, managing director of acquisitions for Naperville-based Marquette. The loan closed Tuesday and construction crews began foundation work Wednesday, he said.

Marquette is the latest apartment investor to ride a development wave that’s projected to add more than 5,200 units to the downtown market by the end of next year. All the construction has sparked concern about a potential glut, but Mr. Sloniger doesn’t think Catalyst is vulnerable, saying most development so far has been in other parts of downtown.

“Generically, it competes with us, but I think we have a unique location,” he said. The project’s proximity to West Loop office towers will give it an edge in attracting people who want to live close to where they work, he said.

Marquette is developing the building in a joint venture with El Paso, Texas-based Hunt Cos. and Armonk, N.Y.-based Kayne Anderson Capital Advisors L.P., Mr. Sloniger said. He declined to disclose much the project will cost but said rents will be around $2.70 a square foot. That’s high but well below levels at the city’s most expensive buildings. Rents at several downtown towers opening this year and next are likely to exceed $3 a square foot.

Catalyst will include an amenity deck with outdoor pool on the building’s 19th floor. It also includes about 15,000 square feet of ground-floor retail space that will be occupied by a Walgreens store.

Marquette has been one of the busiest apartment investors in the Chicago market the past few years, paying about $70 million in 2012 for a 278-unit South Loop high-rise. The firm also broke ground last year on a 220-unit apartment complex in Algonquin and plans a development in downtown Naperville that will include a hotel and retail and office space.

Though real estate lending has come back since the crash, many lenders remain wary of financing development because it’s riskier than financing an established property that’s generating income. Getting a construction loan is still a lot more difficult than it was, Mr. Sloniger said.

“It was like wrestling down a greased pig, but we did it,” he said.