Busy North Side apartment developer kicks off Ravenswood project
Cedar Street, one of the most active apartment developers on the North Side, is branching out into a new neighborhood: Ravenswood.
The firm has brought in about $12 million in capital and construction financing to kick off a five-story, 38-unit project that Harrington Brown has been planning for years alongside the Brown Line stop on Montrose Avenue, the Chicago developers said.
Cedar Street already has a large portfolio of buildings it owns and is developing in nearby neighborhoods including Uptown, Edgewater and Andersonville, as well as in other parts of the city. Its apartments are marketed under the Flats brand.
Last year the firm also began cashing in on some of the properties it has developed, including a $67 million sale of six apartment buildings in Uptown and Edgewater and a $7.25 million sale of an office and retail building in Uptown, as Cedar Street looks to take on new projects.
“It’s a natural progression for us, given our current holdings on the North Side,” Cedar Street partner Will Murphy said. “We’ve always identified Ravenswood as a strong neighborhood. We’re excited to get our first one done there.”
Another Chicago developer, Springbank Real Estate Group, plans to redevelop the former Sears store in Ravenswood into apartments and retail.
But unlike downtown Chicago, where there are concerns about overbuilding, North Side neighborhoods like Ravenswood don’t appear headed toward a supply glut, Murphy said.
Harrington Brown has owned the site at 1819 W. Montrose Ave. since buying it from the CTA in 2009, and last year it gained zoning approval to build apartments there. In the meantime, the developer has donated the land to the neighborhood for uses such as a Christmas market and a community garden, as it planned the eventual development of the site, Harrington Brown President David Brown said.
Brown is a Ravenswood resident and a partner at Band of Bohemia, a Michelin-rated brewpub in the neighborhood. His firm’s past real estate deals include the sale of a warehouse at 2050 W. Balmoral Ave. to Half Acre Beer.
“We’re a small company, and it made sense to bring in the capital and construction financing through Cedar Street,” Brown said. “I like their design and branding, and the way they become part of a neighborhood.”
Cedar Street is putting about $3 million in equity to the project, along with an $8.9 million construction loan from Muncie, Ind.-based First Merchants Bank, Murphy said. The development is expected to cost about $12 million, not including Brown’s costs to buy and rezone the land, Murphy said.
Cedar Street closed on the loan and the venture with Harrington Brown on Dec. 28, Murphy said.
Construction is expected to begin in the second or third quarter of this year, with completion scheduled by early 2018, the developers said.
The building will include about 5,500 square feet of ground-floor retail, 31 one-bedroom apartments and seven two-bedroom units, Murphy said.
Separate from the apartment project, Harrington Brown is upgrading about 6,000 square feet of single-story retail space it owns next door at 1825-1835 W. Montrose, Brown said. Scot’s Bar and Los Toritos restaurant are current tenants, and Suvarna Chiropractic has leased another space. A fourth retail space is available for lease, Brown said.
Crain’s Chicago Business | Ryan Ori