About eight months after securing the city’s approval for a 29-story condominium project in the Gold Coast, a Chicago developer might not build the tower after all.
Lexington Homes hired the Chicago office of HFF to sell the development site at 1022-1028 N. Dearborn Parkway, on a parking lot north of the Ruth Page Center for the Arts. A Lexington venture bought the property only in July, a few months after the City Council signed off on a zoning change to allow the 50-unit project.
Lexington is still weighing its options for the 11,281-square-foot property and could still develop the building if HFF finds a joint venture partner willing to invest in the project on attractive terms, said HFF Managing Director Danny Kaufman.
“It could be a sale of the site,” he said. “It could also be a capital raise.”
Lexington Co-Principal Jeff Benach declined to comment.
Amid a resurgent condo market, especially at the top end, demand for development sites is strong these days. That’s especially true for parcels like Lexington’s that fall under the city’s older affordable-housing regulations. The city approved tougher rules last year that will increase development costs, making the grandfathered properties more attractive to developers.
The Lexington venture paid $16.8 million for the Gold Coast site in July, a price that reflects the higher value based on the property’s new zoning. Considering how much the downtown condo market has risen since Lexington signed its contract to buy the site, it’s likely that the firm could sell the property for more than it paid, said Susan Tjarksen, principal and managing broker at KIG, the Chicago-based brokerage that sold the site to Lexington for the Ruth Page Foundation.
Lexington also bought air rights over the existing low-rise buildings to the south to protect views in that direction, according to an HFF flier.
Story originally from Alby Gallun via Crain’s Chicago Business.