Wednesday, September 6, 2017

Motor Row (aka McCormick Square?): The Hottest Neighborhood You've Never Heard Of

In case you missed this last week, some "positive" news on Motor Row and all of the activity around Cermak (via Crains):
Milan Rubenstein was nervous when he spent $19 million on a slew of mostly vacant properties on the Near South Side three years ago. Historic Motor Row on South Michigan Avenue and the area surrounding the McCormick Place convention center were so plagued by developmental false starts that even a new CTA train stop, 10,387-seat arena, 40-story hotel and a vow from the city of Chicago to transform the neighborhood into an entertainment district were no guarantee that his big bet would pay off.

"I was scared to death," says the partner at Windy City RE, which has historically specialized in buying and selling apartment complexes but splurged on mixed-use properties on and near Motor Row in 2013 and '14. Beyond the money he spent to purchase the properties, he had to spend millions more to fix them up. "Now I'm no longer scared. I'm very excited."

Motivated in part by the addition of Wintrust Arena and the 1,206-room Marriott Marquis Chicago hotel set to open in coming weeks, Rubenstein has in the past 18 months signed more than 15 leases with businesses to fill his retail and office space. His historic properties that once housed auto showrooms but sat empty for years have been filled in recent months with tenants that hint at gentrification: bars, restaurants, a day care, a boutique gym and even a dog grooming business. Residential units above the retail properties are getting snapped up as well, some for 20 percent more than he underwrote them for when he purchased the properties three or four years ago, he says.

These are early signals that the entertainment hot spot he envisions for the area with year-round activity instead of ebbs and flows of traffic from convention-goers may be starting to form—though the road ahead is still long.

It's an interesting read...BUT...still doesn't seem like the neighborhood is that hot yet.  Yes a lot of developers and investors are eating up properties, but we've heard this story before.

I guess we'll see.  We're optimistic, but again we're taking a more cautious approach.  The proof will be in the pudding.

(Hat tip:  AR & AD!)

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