The developer of a 15-story South Loop apartment building scored a nearly $53 million construction loan to finance the project, jumping into a crowded rental market that's showing signs of softness.
A joint venture led by Chicago-based Russland Capital Group is building the 199-unit tower at 1411 S. Michigan Ave., a few blocks west of Soldier Field. The venture borrowed $52.7 million from Square Mile Capital Management, a New York investment firm, to finance the development, according to Colliers International, the brokerage that arranged the financing.
The strange thing about this article was this piece:
Russland Principal Jacob Bletnitsky is confident his project will succeed even though it will face competition from other new buildings. Amid strong job growth in the city, more people are moving downtown, and they’re more interested in renting than buying, he said.
“I don’t think we’re going to have a problem filling the units,” he said. “I think the rental market is going to stay hot for at least five years. But who knows? Nobody expected what happened eight or nine years ago,” when the downtown condominium market crashed.
Now we're not major real estate developers, but a market staying hot for five years doesn't seem like a very long time for an rental building - especially since this project isn't slated to be done until spring 2018.
That being said, the fact that they have a deal in place with Rush hospital seems pretty stable.
Does that statement seem strange to anyone else?