Developer secures financing for new Fulton Market tower, a rare event amid economic anxiety
Developer Vista Property said Wednesday that the company is about to break ground on a massive apartment tower in the West Loop's Fulton Market, a rare event ever since soaring costs made many investors leery about supporting such projects.
A tower crane will soon appear at 370 N. Morgan St., the site of the old single-story Fox Deluxe Foods building, where New York-based Vista plans to complete by 2027 a 31-story, mixed-use residential tower with a total of 494 units, including nearly 100 affordable homes.
The building was green lit by the Chicago Plan Commission in 2023, but high interest rates and inflation delayed it and many other approved developments. Vista said it secured a $151 million construction loan from CIBC Bank USA and $22 million in private investment from global investor PGIM Real Estate.
'High interest rates increase the costs of putting deals together,' said Ron DeVries, senior managing director of Integra Realty Resources. 'But it's not surprising this is one of the first developments to go forward after the drought because everyone wants to be in the West Loop, and that's where the biggest rents are.'
Fulton Market is a popular choice for affluent renters attracted to its restaurants, nightlife and easy access to downtown, making Vista's plan appealing, said Shaunak Tanna, executive director at PGIM Real Estate.
'The Chicago multifamily sector remains strong, with Fulton Market standing out as one of the city's most vibrant neighborhoods, attracting both residents and employers,' he said in a prepared statement.
The development at 370 N. Morgan St. is the first phase of the three-tower, $448 million project approved by the Plan Commission in 2023. Vista also proposed building skyscrapers at 400 N. Morgan St. and 401 N. Morgan St. If completed, the development would be one of Chicago's largest recent apartment projects, adding up to 1,450 units.
Designed by Antunovich Associates, 370 N. Morgan St., will include 45,000 square feet of amenities spread across several floors, a rooftop pool deck and co-working stations. A parking podium will offer 192 spaces, most with EV charging capabilities. The builders will also create a new landscaped plaza at the intersection of Kinzie and Morgan streets.
'Fulton Market is experiencing remarkable growth and we are witnessing an increasing demand for spaces that blend living, working, and recreational opportunities within the vibrant core of downtown Chicago,' said Ark Latt, partner and chief development officer at Vista Property, in a statement.
About 10 major apartment developments were completed in Chicago last year, DeVries said, including Flora Apartments, a 34-story tower in Fulton Market with 368 units. But financing for these skyscrapers was mostly complete by 2022, just before inflation and other economic anxieties led the Federal Reserve to start hiking interest rates.
Developers will complete several major apartment projects in Chicago this year, including Straits Row Apartments at 633 S. LaSalle St., and the 12-story Neveseno Apartments at 1717 S. Michigan Ave. Both are smaller-scale developments, each providing fewer than 150 units, and that made it easier for the developers to secure financing, DeVries said.
The Federal Reserve began dropping interest rates last year as inflation cooled, but anxiety about the Trump administration's tariff policies, and the possibility of higher inflation, led Fed officials to hold off on any further cuts so far in 2025.
A few significant apartment projects did score financing and get underway in 2024, most notably Related Midwest's two-tower 400 Lake Shore development in Streeterville. The company plans to complete phase one, the 858-foot-tall North Tower, by early 2027.
'We're hearing that there are a lot of banks that really want to provide construction loans,' DeVries said, but the private investors needed to complete financing for most projects still worry about overall costs and interest rates. 'That's been the challenge of late.'
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