Colin Kihnke is prepared to part with a key piece of his South Loop dominion.
His real estate development firm, Chicago-based CMK Companies, has hired Cushman & Wakefield brokers to sell 1400 South Wabash, a 299-unit apartment tower it completed in 2023, a listing shows.
CMK holds significant apartment assets in Chicago, particularly in the South Loop, where it owns towers at 1333 and 1345 South Wabash, among others in the area. Thus, the firm has held substantial sway over rental rates in the neighborhood, which have been on bigger upswings than the rest of downtown.
The 30-story tower listing doesn’t contain a price, but the seller needs to fetch at least $67 million to pay off its construction loan for the asset. CMK in 2021 took out a loan for that amount from Wintrust ahead of breaking ground.
The property is likely worth more than the loan balance, according to a source familiar with the market, but multifamily developers have been dealing with much slimmer profits on their exits from Chicago properties as elevated interest rates since 2022 have eaten into property values. Some significant deals have even resulted in painful financial losses for sellers such as JPMorgan Asset Management, which let go of both a Lake Shore Drive apartment property and a Fulton Market housing tower at big cuts from their last sale prices.
But those deals were for properties that JPMorgan acquired rather than developed — there’s still been strong investor demand for newly built multifamily housing in the Chicago area, although the suburbs tended to outperform the downtown core last year.
CMK didn’t return a request for comment, and the Cushman brokerage team declined to comment. The brokers are Jack Maloney, Brad Smith and Susan Tjarksen.
South Loop rent trends are running in the right direction for CMK, as they’ve been growing faster than the rest of downtown Chicago in recent years after lagging. Since 2015, rents in the South Loop have grown a cumulative 34 percent, the second-most of any downtown Chicago submarket, according to Cushman marketing materials. South Loop rents currently average $284 below other downtown Chicago neighborhoods, and the gap between South Loop rents and other submarkets has decreased 18 percent in the last decade, the Cushman flier shows.
New supply projections for the multifamily market also favor landlords of existing properties. Additions to the supply are expected to drop 31 percent in the next four years compared to the 10-year historical average – with South Loop supply down a dramatic 49 percent, according to Cushman.
Still, CMK is building several more apartment buildings in the South Loop, totaling 296 units across three parcels at 1630, 1700 and 1730 South Wabash. It picked up the development sites at 1630 and 1700 South Wabash for $5.5 million in 2022.
CMK bought the parcel at 1400 South Wabash that it’s now selling for a little under $5.9 million in 2020, when it still held a single-story commercial building, public records show. The seller in that deal was an entity tied to Yisroel Gluck, a well-known investor who once held a stake in the Willis Tower, and his firm American Landmark Properties.
Read more
Commercial
Chicago
CMK buys another South Loop development site for $5.5M
Development
Chicago
CMK to launch sixth South Loop apartment project