Mike Whalen, the CEO of Heart of America Group, used his banking connections to secure a $48 Million construction loan, paving the way for a significant redevelopment project next to Lincoln Yards.
Whalen's joint venture with local apartment broker Jon Morgan is set to convert a 110-year-old industrial building into 121 apartments at 2032 North Clybourn Avenue. The project involves the renovation of the former headquarters of the Anixter Center, a Chicago non-profit. The venture purchased the 140,000 square foot building and the 35,000-square-foot parking lot for $15 million in 2021.
Whalen and Morgan can finally move forward with their plan nearly two years after the land purchase, thanks to the loan they secured from Iowa-based West Bank. This is a significant win for the developers given the current market conditions such as:
- High interest rates
- Possible recession
- Increased construction costs
All of these conditions have made it difficult for developers to acquire adequate funds. However, apartment demand remains strong in Chicago, providing developers with statistics to show lenders and ease their concerns about issuing new debt.
Whalen was able to take advantage of his established connections with West Bank to secure the loan. Whalen and Morgan have worked together on other redevelopment projects in the past. They converted the 95,000-square-foot former lamp factory at 2065 North Southport Avenue into a mix of 56 apartments and offices, with all of the apartments and 90% of the office space in the building being leased, according to Morgan.
Chicago.org states that the North Clybourn and North Southport properties are both a stone's throw away from Lincoln Yards - a $6 billion megadevelopment led by Sterling Bay that's currently under construction. Whalen believes that Lincoln Yards will be a game-changer when completed. This will be located on 53 acres of mostly vacant land with the North Branch Industrial Corridor in the Lincoln Park and West Town community areas. The project will include:
- 14 million square feet of new commercial and residential construction
- 6,000 residential units with 20 percent affordability requirement
- 21 acres of public open space
- Multiple infrastructure and transportation improvements
- More than $120 million in development fees
Whalen believes that when the megadevelopment finally gets done, it will be a monster game-changer. According to the RDA, $490 million in future increment from the Cortland/Chicago River TIF District will reimburse Sterling Bay for the construction of new public infrastructure such as bridges and roadways identified during the community engagement process.
