The development team of Fifield Companies and Wood Partners broke ground earlier this week on K2, a 34-story apartment tower that will include 496 luxury units, capping off Fifield’s K Station development in Chicago.
Steven Fifield, chairman and CEO of Fifield Cos., Randy Fifield, vice chairman and principal of Fifield Cos., and Patrick Trask, central region director for Wood Partners, were all on hand for the ground breaking ceremony at the corner of W. Kinzie St. and N. Union Avenue in Chicago on Wednesday.
The red hot apartment market has brought a noticeable burst of development back to Chicago, where construction cranes have been practically vacant from the skyline for the past three years.
That’s all changed as apartment fundamentals have given developers and lenders the confidence to break ground on large-scale projects. Joining Fifield and Wood Partners in the high-rise game are Magellan Development, AMLI, and Related Midwest, all of whom are actively constructing new luxury apartment buildings.
Yet just because apartment projects are getting the green light from lenders, it hasn’t been an easy process to make it happen.
“In real estate development, we are dreamers, but it’s not enough just to be a dreamer,” said Steven Fifield. “You have to be a tenacious dreamer.”
Fifield’s tenacity can be seen in the lengths he had to go through to make this deal happen. He has considerable clout in Chicago as a successful developer, but even in a market that favors apartments, it took multiple sources of financing and a co-developer in Wood Patners to pull K2 off.
All told, Fifield pooled capital from five separate banks to make it happen. The PrivateBank Chicago is listed as the leading lender for the project. Other sources of capital came from Comerica Bank, Fifth Third Bank, Cole Taylor Bank, and Bank of the West.
The aptly named K2 refers to the 28,251-foot peak in the Himalayas, one of the most grueling and dangerous climbs in the world. The name simultaneously references the rare air Fifield aspires the development to be in and the ambitious effort it took to pull it off.
Fifield and his wife Randy are no strangers to the neighborhood. The K Station development already has four apartment towers, and with the delivery of K2 in the first quarter of 2013, the total number of units built by Fifield will be 2,145. Combined with the Jewel/Osco store that the Fifields attracted to the site, they have essentially built a small city on Chicago’s near west side.
Building large-scale apartment complexes west of the Chicago River may have seemed like a risk to some, but Fifield’s track record shows that he is not afraid of pushing the city further west than its traditional base in the Loop. He pointed out that his first office project in Chicago, 101 North Wacker Drive, was met with great skepticism in 1978. Commercial real estate veterans did not think that firms would want to office on what was considered a dead block. More than 30 years later, Wacker Drive stands as perhaps the healthiest commercial corridor in the city, with premier office space and easy access to both CTA and Metra transportation centers.
The same skepticism met his office development at 550 W. Washington in 2000. Once again, most thought it was too far west to gain any traction.
The K Station development has been successful as well. Left Bank at K Station, the first tower to go up, was delivered in 2006, followed by Echelon at K Station, and the east and west towers of Alta K Station. Currently, Echelon is 94 perent occupied and Alta is 85 percent.
In an increasingly competitive market, the Fifields plan on K2 offering the most amenities and luxuries of the bunch.
“We are creating a community and a lifestyle,” said Randy Fifield. “Young people moving downtown want to live with the same amenities that they had at their parents’ house.”
It’s hard for a young professional to move downtown and have the means to afford all of the bells and whistles that can come with living at mom and dad’s. However, the Fifields have discovered that if it is scaled properly, young renters can find the perks and luxuries that they seek.
Residents at K2 will have access to a 70-foot lap pool, a modern fitness facility, a theater room, and a business center. In many ways, it will probably be an upgrade from what they had at their parents, but then, parents are welcome too.
Randy Fifield said that many of the inquiries for apartments come from empty nesters looking to move into the city and leave the suburban lifestyle behind.
The development isn’t just a win for the Fifields, but also the city. Randy Fifield pointed out that the development will create 200 jobs during its construction. The revitalization of city living has been occurring for some time. Young professionals want access to public transportation and employers, while empty nesters have targeted the city to downsize their residential space and be closer to cultural amenities.
Steve Fifield credited former mayor Daley for creating the urban environment- one that focused on arts, culture, and green space-that brought so many back to the city.
“Thirty years ago, everyone wrote-off major cities,” said Fifield. “It’s wonderful to see the rebirth, especially in Chicago.”