CHICAGO | Lincoln Yards

[LouisVanDerWright]

Originally Posted by SamInTheLoop

^ There's gotta be big institutional money behind this, no? Or was there and they split? As mentioned, I've had the feeling there might be major capital partner issues going on. Something about Gloor's Razzie worthy schtick lately/ public B Johnson fluffing/turn to the Chicago Teachers Pension Fund.....it's all just a bit much. And, man, their parting ways with Citadel down in hype cycle land for new hq - ouch.

You kinda answer your own question:

Originally Posted by SamInTheLoop

Well, rule #1 of real estate development is you build with other peoples' money.

The institutional money never existed. As usual Sterling Bay is acting as a pure developer and attempting to generate profits out of thin air by merely tying up the land and entitling it. There probably were institutional players ready to shell out, but changing economic conditions like money no longer being free put the kabosh on that.

So now you have Sterling Bay sitting on entitled land that they acquired with other people's money, but can't begin developing because it's a nasty brownfield with zero infrastructure. The other people in this scenario are understandably not satisfied with the recent headlines from what I hear.

[CaptainJilliams]

Welp, is anyone really surprised?

Chicago Teachers' Pension Fund says no to Lincoln Yards
https://www.chicagobusiness.com/comm...-lincoln-yards

[SamInTheLoop]

^ Good. Glad that's off the table.

[LouisVanDerWright]

Originally Posted by SamInTheLoop

^ Good. Glad that's off the table.

In light of the news that Crescent Heights is on the verge of defaulting on their SF project, I'm starting to think Sterling Bay might be facing some difficulties of their own given their massive exposure to the flagging office and CRE sectors.

[Randomguy34]

^ They've told Crain's in June that they have to start selling some of their buildings due to financial troubles, and are grappling with hundreds of millions in outstanding debt they're struggling to pay off. Some of the buildings they intend to sell include 333 N Green, 311 W Monroe, and 300 N Michigan

Article: https://www.chicagobusiness.com/comm...-lincoln-yards

[CaptainJilliams]

All of this sounds like the original Lincoln Yards vision is becoming a pipe dream.

[mh777]

Originally Posted by CaptainJilliams

All of this sounds like the original Lincoln Yards vision is becoming a pipe dream.

Most definitely. There is absolutely no need for the amount of office space they are proposing.. I seriously don’t get why they wouldn’t try to convince the bears to look at possibly building a new stadium in the area.

[twister244]

Originally Posted by mh777

Most definitely. There is absolutely no need for the amount of office space they are proposing.. I seriously don’t get why they wouldn’t try to convince the bears to look at possibly building a new stadium in the area.

I wouldn't be surprised if there aren't some sort of backroom conversations around this actually happening. The site is large enough to hold a new stadium, and it's a good location transit wise. I'm purely speculating though.

[west-town-brad]

Originally Posted by CaptainJilliams

All of this sounds like the original Lincoln Yards vision is becoming a pipe dream.

Bears aside, the site sits between two perennial in demand residential areas, so it might be easiest to just go pure residential.

[ithakas]

Originally Posted by west-town-brad

Bears aside, the site sits between two perennial in demand residential areas, so it might be easiest to just go pure residential.

Yes, I never loved the original Lincoln Yards plan. To me, a neighborhood that replicates the form of something like Printers Row would be perfect here. Maybe a couple of taller towers in the area closest to North/Clybourn and a sprinkling of boutique office buildings along the river.

[west-town-brad]

Originally Posted by ithakas

Yes, I never loved the original Lincoln Yards plan. To me, a neighborhood that replicates the form of something like Printers Row would be perfect here. Maybe a couple of taller towers in the area closest to North/Clybourn and a sprinkling of boutique office buildings along the river.

I don’t know what the allowance for residential is in the current PD(s) but is think the city could achieve a lot of objectives by going super high density with a high set aside for affordable units.

[Randomguy34]

11 pickleball courts are open up at Lincoln Yards till end of November:
https://blockclubchicago.org/2023/08...ampaign=buffer

[Randomguy34]

Lincoln Yards: Episode IV – A New Hope

Real estate investor mulling plan to kick-start Lincoln Yards

Boca Raton, Fla.-based Kayne Anderson Real Estate is exploring the prospect of becoming a primary financial backer of the planned 53-acre campus and recently met with top Chicago planning officials to discuss the project, according to people familiar with the matter. Sterling Bay has spent much of the past year hunting for a new financial partner for the 14.5 million-square-foot development, which would reshape a swath of the city's North Side between Lincoln Park and Bucktown with high-rises and generate thousands of new jobs.
....
Sterling Bay and Kayne Anderson executives met with city planning officials on Feb. 26 to discuss the Lincoln Yards project, a spokesman for the city's Department of Planning & Development confirmed.

Sources familiar with the meeting said Kayne Anderson was gathering information about Sterling Bay's approved planned development and the nature of the redevelopment agreement the developer struck with the city, which includes details of a tax-increment financing district meant to help back construction of new infrastructure on the site. Kayne Anderson and Sterling Bay did not indicate a partnership or new development was imminent or propose any changes to the plan, sources said.

https://www.chicagobusiness.com/comm...-lincoln-yards

[dreamy-developer]

Sterling Bay Puts 3 Lincoln Yards-Adjacent Properties Up For Sale

The developer listed properties at 1907 N. Mendell St., 1901 N. Elston St. and 1500 W. Cortland Ave., all next to the 53-acre site projected to accommodate 14.5M SF of development, Crain's Chicago Business reports.

Sterling Bay already sold a nearby industrial property at 1854 N. Besly Court over the summer and has also listed a vacant industrial building at 1860 N. Elston Ave.

But the three sites up for sale now are closer to the Lincoln Yards megadevelopment and face approaching loan deadlines, Crain's reported. The buildings are tied to two Signature Bank loans worth more than $8M and have been the subject of multiple extensions. The latest extension in November set a May 2 deadline.

The attempt to cash out comes as Sterling Bay reckons with numerous roadblocks to kick-starting the $6B Lincoln Yards project along the North Branch of the Chicago River between Lincoln Park and Bucktown.

The developer broke ground on Lincoln Yards in 2021, setting an anticipated completion date in 2031. City roadblocks delayed that timeline by three years, Sterling Bay CEO Andy Gloor previously told Bloomberg.

More recently, Sterling Bay has had difficulty sourcing capital to get the project moving. In August, the Chicago Teachers' Pension Fund turned down a pitch to give Lincoln Yards a $300M shot in the arm, citing a bad fit and an overallocation to real estate in its portfolio.

The rejection came as two of Sterling Bay’s key financial backers for the development, J.P. Morgan Asset Management and Lone Star Funds, sought to sell their stakes at significant discounts.

A new potential backer emerged last month when Kayne Anderson Real Estate was reported to be mulling the idea of injecting capital into the dormant project. It isn't clear whether the parties are close to a deal, Crain's reported.

https://www.bisnow.com/chicago/news/...or-sale-123851

[twister244]

Yep, as I posted in the Sox thread - This thing may as well be dead for the time being. Also, as much as SB wants to point fingers at the city, and I fully believe the city was a pain in the ass, this is SB's inability to raise capital to get this thing off the ground.

I'm sure several factors can be blamed, but the office market downturn was probably a big factor. That and combined rising costs/rates is proving to be a huge thorn in the side of any major project.

[urbanpln]

Originally Posted by twister244

Yep, as I posted in the Sox thread - This thing may as well be dead for the time being. Also, as much as SB wants to point fingers at the city, and I fully believe the city was a pain in the ass, this is SB's inability to raise capital to get this thing off the ground.

I'm sure several factors can be blamed, but the office market downturn was probably a big factor. That and combined rising costs/rates is proving to be a huge thorn in the side of any major project.

I saw a news clip that Hudson Yards is struggling to sell condos and complete the build-out.

[MAC123]

Originally Posted by urbanpln

I saw a news clip that Hudson Yards is struggling to sell condos and complete the build-out.

It may be struggling to sell condos, idk but that has nothing to do with the full build out. They are just waiting for the casino license at this point.

[Toasty Joe]

I feel like we'll end up with a better product in the long run

[sentinel]

This all just boils down to two things: 1. Still high interest rates and 2. Continued soft demand for office space post-Covid.

[sammyg]

Sterling Bay must really regret holding out for that TIF. If they had just moved forward without the subsidies in 2018 they'd have completed most of the project.