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Three Questions for Hines Project Director David Bach

Last month, the Greater Chicago Food Depository hosted its 25th Annual Commercial Real Estate Awards Dinner at the Hyatt Regency. Hines Interests nabbed the evening's Development of the Year title for its 1225 Old Town project, a new apartment community on North Wells (it scored a 2012 Curbed Award too, for Biggest Rental Draw). David Bach, Hines' director on the project, chatted with us on the award and Chicago's development climate:

Curbed: What do you think set the 1225 Old Town development apart enough to be recognized as the best of the year?

It's a frequently cited cliché, but everything in the real estate industry starts with location. Chicagoans love the Old Town neighborhood for its unique charm, restaurants, bars, comedy clubs, and boutique shopping - yet the neighborhood had not seen an apartment development of this size in over two decades. The thesis of the project was that many renters desire condo-quality finishes and amenities, yet would prefer to live in the tree-lined neighborhoods of the city, where there is a real dearth of new supply. In that sense, 1225 Old Town tapped into a source of pent-up demand that helped to fuel a very successful lease-up. The project was 94% leased in just seven months after opening, and is already achieving rental rates that compete with the most successful stabilized properties in the market.

1225 Old Town is the first apartment development that Hines has delivered in Chicago, so there was a tremendous attention to detail and motivation to do everything the right way. Everything from the architectural design to the apartment finishes to the amenity offerings were considered with painstaking detail, and I believe that the rigor of that process is evident in a quality end product. The building also brought a few 'firsts' to the Chicago apartment market, such as quartzite countertops, which are now being implemented in some of the upcoming 2013 deliveries.

In addition to the 250 apartment units, the project had another layer of complexity in the form of 34,000 SF of ground floor retail space, and I believe that our team found the perfect solution to this challenge. We have leased the vast majority of this space to Plum Market, a top-notch boutique grocer from Michigan. The store will focus on providing local, fresh, and organic foods, will have multiple prepared foods stations, and will even have an Intelligentsia coffee shop with separate street access. Not only did this lease take a lot of financial risk off of the table, but it really is the perfect amenity for both our apartment residents and the neighborhood as a whole.

Curbed: What kinds of trends have you and your team seen in residential development in the last year?

Everyone hears about the lingering threats to the global economy, but it is a very exciting time to be living and working in Chicago. The downtown area in particular is experiencing phenomenal job and employment growth relative to the central business districts of other American cities, and an increasing percentage of these new employees want to live in relatively close proximity to their places of employment. These factors have markedly increased demand for apartment units in Chicago, and you can see the evidence both in the escalating market rental rates and the cranes hovering over the city. Developers are engaging in a sort of arms race to deliver the most desirable and novel offerings to attract this growing renter pool. The top class of apartment buildings in Chicago are now equipped with amenities and luxuries that were not present in this market just a few years ago, and I don't see an end to that trend in the near future.

Curbed: Are there any specific amenities or development styles you've found Chicagoans seem to be looking for in particular that you try to incorporate into your developments?

When we designed 1225 Old Town, we knew the options that prospective renters have around the city, and those include some of the enormous 500-unit megaplexes downtown. Even though 1225 Old Town is a relatively boutique project at only 250 units, we felt that in order to compete with the best buildings in the city, we needed to offer an amenity suite that was every bit as fantastic as those supported by bigger buildings. The 11th Floor outdoor deck offers a swimming pool, hot tub, stainless steel grills, and a gas-lit fireplace – all with panoramic views of the city. Indoor amenities include a full fitness center, a demonstration kitchen, internet café, private movie theater room, and social lounge. Residents have the benefit of enjoying a multitude of great public spaces, and when you think about the amenities being shared by a smaller number of people, the offering is even more compelling.

1225 Old Town

1225 North Wells Street, Chicago, IL 60610 Visit Website