Crain’s Cleveland | Michelle Jarboe | July 17, 2020
Developers forge ahead on apartment plans on Cleveland’s near West Side
Developers are pushing forward on plans for two noteworthy
apartment projects on Cleveland’s near West Side, despite the pandemic and a
recession that has left other real estate deals on rocky footing.
On Friday, July 17, the Cleveland City Planning Commission
gave an initial thumbs-up to Waterford Bluffs, a five-story apartment building
slated for vacant land at West 20th Street and Lorain Avenue, near the western
end of the Hope Memorial Bridge. And on Thursday, July 16, a city design review
committee got its first glimpse of the Viaduct, a 27-story tower that could
rise on the west bank of the Flats.
Developer Stoneleigh Cos. hopes to break ground in September
for Waterford Bluffs, a 241-unit building at the confluence of the Ohio City,
Tremont and Duck Island neighborhoods. The project, with a roughly $60 million
price tag, could be complete in mid-2022.
Plans drawn up by Cleveland-based architecture firm Vocon
show that 99% of the units will be studios and one-bedroom apartments, with an
average size of 583 square feet.
During a phone conversation, Stoneleigh president Rick
Cavenaugh said the small footprints will allow for lower monthly rents. At a
projected average rate of $2.40 per square foot, a midsize apartment might rent
for about $1,400 a month.
“We certainly don’t want to get to $4,000 rents,”
he said, adding that the Illinois-based company expects to attract tenants who
want to live within walking distance of the West Side Market, a Greater
Cleveland Regional Transit Authority Rapid station and downtown.
Friday’s planning approval followed a Thursday vote from a
design review committee that vets projects in downtown Cleveland and close-lying
areas. That committee also gave Waterford Bluffs a nod, though members asked
Stoneleigh and Vocon to keep studying landscaping, materials and site-access
Stoneleigh purchased the 4-acre site, which had been
assembled and cleared by local developers, in late March for $7.6 million,
according to public records.
“This site is a long time coming,” Freddy Collier,
the city’s planning director, said during Friday’s meeting. “I was very
pleased with the fact that this was a mid-rise structure rather than a tower,
that was originally proposed for this particular site.”
Crain’s Chicago | Alby Gallun | July 9, 2020
Suburban hotel-turned-apartments for sale
The developer expects to sell One Arlington for about $75 million.
About six years after converting a Sheraton hotel
in Arlington Heights
into apartments, local developer Rick Cavenaugh has put the property up for sale.
Cavenaugh, president of Barrington-based Stoneleigh, has hired the Chicago office of CBRE to sell One Arlington, a 214-unit building at 3400 W. Stonegate Blvd., just down the street from the Arlington International Racecourse. He expects the property to fetch about $75 million, or about $350,000 per unit.
The once-strong local apartment investment market stalled out several months ago, after the
coronavirus spread to Chicago. Wary of making
a major acquisition during a time of extreme
uncertainty—not to mention traveling to and touring properties during a
pandemic—many investors put big deals on hold.
Cavenaugh had decided
to put One Arlington on the market
in early March,
but that plan “came to a screeching halt” because
of the pandemic, he said.
Four months later, big institutional investors are scouting for deals again,
and they don’t have many options, Cavenaugh said. So CBRE recommended that he put One Arlington
up for sale now. A recent
$54 million sale of a new multifamily complex in Lake Forest and another
property in Highland Park suggest
improved investor demand
for apartments, he said.
at CBRE “were very encouraged by the activity on those,” he said.
Yet One Arlington has lost tenants because of the pandemic. The building is about 93 percent leased today, down from 97 percent in early March, as some tenants lost jobs and others moved away, Cavenaugh said. Traffic at the building’s leasing office is about one-third of normal levels for this time of year.
But rents are still about 8 to 10 percent higher than they were a year ago, he said. The average apartment in the building rents for $1,992, or $2.17 per square foot, according to a CBRE brochure. A higher proportion of tenants also are renewing their leases. “Renewals are off the charts,” Cavenaugh said.
The Sheraton fell victim to the last recession,
closing for good at the end of 2009. Cavenaugh
converted the hotel
into apartments in 2014, part of a larger redevelopment of the property expected to include a 102-room hotel,
rock-climbing gym and 263-unit apartment building developed by Chicago-based CA Ventures, the CBRE brochure says.
The pandemic and recession hasn’t stopped Cavenaugh, who has one multifamily development underway in St. Paul, Minn., and expects to break ground soon on another in Cleveland. He also plans a project in Glenwood Springs, Colo., near Aspen.