The South Loop is the historic commercial center of downtown Chicago. It is the seat of government for Cook County as well as the historic theater and shopping district. It includes State Street—“that great street,” in the words of the Frank Sinatra song. In 1993, Mayor Daley moved from the Bridgeport neighborhood he grew up in to the South Loop—at the start of what would become a major housing explosion. Developers flooded into the market, quickly followed by homebuyers, who were eager to move into new high-rises and loft conversions. In 2006, nearly one-half of the condos that were sold in downtown Chicago were reportedly located in the South Loop neighborhood.
We bought the Roosevelt Collection in 2011. It was a completed project on Roosevelt Road in Chicago’s South Loop neighborhood. It consisted of 342 apartments, 391,000 square feet of retail space, and 1,500 parking spaces. Only one tenant, the ShowPlace ICON Theatre, was open in the retail area.
The economy was certainly a factor in the property’s underperformance. There were additional retail leases signed, but the residential portion of the project proved to be a problem. What are now apartments at the Roosevelt Collection were originally designed and financed to be condominiums. The condominiums got caught in the downturn and were not sold in the number required under the financing documents. That spelled trouble for the entire development, resulting in the loan going into default.
It was a perfect fit for us because we specialize in underperforming urban real estate. When I founded the company in 1991, there was a recession similar in context [to] the one we are now experiencing. Almost by default, we turned our attentions to distressed properties and were fortunate enough to acquire one or two. On Chicago’s Michigan Avenue, for example, we converted the former Saks Fifth Avenue department store into Niketown. We’d found our niche.
We’re creative, but we can also sell. Without money you can be as creative as you want, but you’re not going to get much built. In this business, you have to be able to sell your idea. I think my team does a good job of that, in part because we’re believable. When we tell people something is going to cost $12 million, it doesn’t come out costing $14 million.
“We’ve removed the center median elements to create a new, active public plaza, which will include landscaped areas, outdoor cafés, children’s play areas, and wider sidewalks for improved pedestrian access.”
Dan McCaffery, Founder
We’ve already made changes to The Roosevelt Collection. With the assistance of Chicago-based Antunovich Associates, we’ve removed the center median elements to create a new, active public plaza, which will include landscaped areas, outdoor cafés, children’s play areas, and wider sidewalks for improved pedestrian access. We’re also changing the entrance to improve retail visibility, and by the end of this year, we think we’ll be 60–70 percent leased.
I think the project will be an anchor for the South Loop. The neighborhood has undergone a tremendous transformation over the past seven or eight years. There are a lot of residential buildings, but there continues to be a shortage of services and a sense of place. We’re going to try to provide services and a spectacular public space that can be called uniquely South Loop. Local and national retailers and restaurants will make the property a shopping destination for the entire community.
Over time we’ll make The Roosevelt Collection an even larger development. The property will also expand: thus far, only one phase has been completed. ABQ
