Citypads Chicago news
Loop office tower to become largest communal living property ever proposed in Chicago
A Chicago developer plans to bring 505 co-living residents to a 41-story Loop office tower, the largest communal living property ever proposed in the city.
CityPads has a deal to buy the top 31 floors of the 92-year-old Clark Adams Building, with plans to invest $80 million converting the office space into small, shared apartments that will be managed by co-living firm Common, CityPads founder Andy Ahitow said.
It is the largest co-living project planned to date in Chicago, a city where co-living is rapidly expanding.
The redevelopment will create 505 co-living beds in 3- and 4-bedroom shared units. There also will be 159 traditional apartments with a combined 172 beds. The firm also has an option to buy the bottom two floors, which have retail and office space, Ahitow said.
Ahitow and the seller, local real estate investor Musa Tadros, declined to disclose terms of the sale.
The co-living plan comes at a time when office landlords in the Central Loop face a wave of upcoming large vacancies, as tenants relocate to new skyscrapers along the Chicago River and to entirely new office submarkets such as the Fulton Market district.
Some experts have predicted that the trend of older office buildings being converted to new uses such as residential and hotels could accelerate.
“You’ll start to see a lot of these Central Loop buildings being converted to residential,” Ahitow said. “It’s an area that’s transitioning to a residential market. There are close to 20,000 people living in the Loop now, and it continues to grow.”
Chicago already has a number of student housing buildings downtown.
Co-living is a relatively new twist, offering similar accommodations for young professionals at a relatively low price.
Operators such as Common offer small, private bedrooms surrounded by areas shared with roommates, such as bathroom and kitchen spaces.
The concept has been derided as dormitories for adults, but advocates say it’s an easy way to move to a new city without lining up roommates with whom to split the rent.
Rooms are move-in ready, and rents include furnishings, home supplies, utilities, wireless connectivity and weekly cleanings. Co-living buildings also include community spaces such as lounges and roof decks.
“If you’re new to Chicago, people want to be around other people, get to know their neighbors and socialize,” said Sandy Albert, Common’s senior director of real estate. “To have a built-in social network is a positive.”
Chicago is high on Common’s list of cities for expansion, Albert said.
Common’s rents at other Chicago buildings start at $975 per month, and the Loop location will start at $1,400. Leases range from three to 12 months. To be called Common Burnham, the building will open to residents by early 2022, Ahitow said.
Common already has four Chicago locations, with four others under construction or planned. That includes the 223-bed Common Addams project with CityPads in Pilsen that is scheduled to open next year.
Chicago’s largest co-living propertyis the 175-bed Quarters building in the Fulton Market district, run by Germany-based Medici Living Group.
The Burnham Brothers-designed Clark Adams building, completed in 1927, was formerly known as the Bankers Building.
Tadros bought it for $48 million in 2006. He sold floors 3-10, which are occupied by a Club Quarters hotel, to Blackstone Group for almost $18.3 million in 2016, according to Cook County property records. The sale was part of Blackstone’s acquisition of a portfolio of Club Quarters properties throughout the country.
The hotel portion of the building is not part of the sale to CityPads.
Tadros said he’s received several offers for the building in recent years, mainly from residential developers. About half of the office space is now occupied, he said.
CityPads expects the purchase to be completed early next year, Ahitow said.
Major co-living firms such as Common currently manage a combined 575 beds in Chicago, with more than 1,200 in the pipeline, according to commercial real estate brokerage Cushman & Wakefield. That’s up from less than 30 beds in 2015.
Chicago-based Cushman & Wakefield in September announced it had been hired to raise $1 billion in debt and equity for New York-based Six Peak Capital, which invests in Common’s co-living projects throughout the country. Six Peak is an investor in the Loop project.
“Chicago is just getting started,” Ahitow said. “There is not a single active developer in Chicago that’s not talking about co-living or looking at doing a co-living project.”