A big slowdown in apartment construction will soon mean fewer options and higher rents for Chicago renters, but developer Trammell Crow said it is preparing to open a new apartment tower in the heart of Fulton Market, among the city’s most vibrant neighborhoods.
The firm’s residential subsidiary, High Street Residential, broke ground last year on the 368-unit tower at 1114 W. Carroll Ave. and will start signing leases this summer. Called Flora Apartments, the tower will be part of Trammell Crow’s Fulton Park Campus, a collection of up to six high-rises with apartments and laboratory space for life sciences and other research companies totaling more than 2 million square feet, all centered around the neighborhood’s first public park.
“We think we are well positioned for success because we got the project out of the ground when we did,” said John Carlson, principal of Trammell Crow.
The company secured financing in 2022 for Flora Apartments, located one block south of its new life sciences and research tower at 400 N. Aberdeen St., just before rising interest rates and construction costs put a squeeze on new rental development. Twenty percent of the units will be reserved as affordable.
And with only about 900 new downtown Chicago apartments getting delivered in 2025, any new units in Fulton Market are likely to be snapped up, said Ron DeVries, senior managing director of Integra Realty Resources.
“Fulton Market is where everyone wants to live right now, and there’s not going to be any notable new supply, so I think this is a good time to bring a new building to market,” DeVries said.
Even with the slowdown, Trammell Crow isn’t the only developer with an apartment project underway. Earlier this year, Shapack Partners, CRG and KMW Communities started construction on 220 N. Ada St., a 308-unit tower several blocks west of Flora Apartments.
Carlson said years of construction in the neighborhood brought many new apartment and office towers. But residents in community meetings expressed frustration that developers did not add green space for families or workers on lunch breaks, so the company will by autumn open Fulton Park, a public park adjacent to Flora Apartments with an outdoor lawn and other green spaces where residents can attend concerts, farmers markets and fairs.
“It’s a theme we’ve heard for quite some time,” he said. “We want to take down the construction fences and invite the public in.”
It’s a welcome move, said Damone Richardson, a Coldwell Banker broker and Fulton Market resident since 2010.
“In the past there was always a big concern about the lack of public park space,” he said. “We can always use more green space, especially on that side of Fulton Market, because right now it’s barren and industrial looking, although it’s filling up quick.”
Trammell Crow completed two other towers nearby, totaling 725,000 square feet and dedicated to life sciences and lab-based research. The property at 1375 W. Fulton Market, finished in 2020, is 98% leased, Carlson said, and 400 N. Aberdeen St., completed two years later, is more than 30% leased, including deals signed with the Illinois Institute of Technology and Chan Zuckerberg Biohub Chicago.
The life sciences industry did meet headwinds last year, including rising interest rates and a fall-off in venture capital funding for industry startups. Some developers balked at pursuing additional projects, including Mark Goodman & Associates, which planned to develop a 16-story life sciences tower at 400 N. Elizabeth St. in Fulton Market, and now plans to develop apartments.
But the Chan Zuckerberg Initiative’s decision last year to select Chicago as the home of a $250 million biohub, and the Illinois Institute of Technology’s decision to establish itself in Fulton Market, are both signs that local lab and research firms will thrive when interest rates fall and venture capital loosens up, according to Carlson.
“(IIT) is the first university to plant a flag in Fulton Market,” he said.
Trammell Crow is also forging ahead with 1105 W. Carroll, the campus’ fourth building. It will rise 26 stories and include 660,000 square feet of lab and office space for both life sciences and other types of research. The company also plans two additional buildings, one of about 500,000 square feet at 1152 W. Carroll, and another of about 225,000 square feet at 1234 W. Fulton, although it hasn’t decided how to use that space.
“We want to be as flexible as possible,” Trammell Crow Vice President Morgan Baer Blaska said.
