A team of real estate developers that recently converted an old industrial building into apartments next to the planned Lincoln Yards campus on the city’s North Side have purchased a building a block away where they plan a similar residential conversion.
A venture led by Interra Realty co-founder Jon Morgan and Moline, Ill.-based Heart of America Group paid nearly $15 million for the 140,000-square-foot former Lincoln Park headquarters of Chicago nonprofit Anixter Center at 2032 N. Clybourn Ave., the buyers confirmed. The venture bought the property and a 35,000-square-foot parking lot next to it from Anixter, a 102-year-old operation that offers programming for the developmentally disabled.
The purchase is a bet on the future transformation of the North Branch between Lincoln Park and Bucktown, which developer Sterling Bay aims to turn into Lincoln Yards, a $6 billion, 55-acre campus of offices, apartments and other uses situated among some of the city’s most affluent neighborhoods.
Heart of America Group founder Mike Whalen said the buyers plan to turn the building into 136 apartments and include other commercial uses, such as a food hall.
With Lincoln Yards in the works, “That’s going to be a powerful area over the next 10 to 15 years,” Whalen said, noting his group and Morgan have had plenty of success leasing up Southport Lofts, a four-story building their group redeveloped into apartments and completed last year. Morgan, who leads Chicago-based commercial real estate brokerage Interra, was not immediately available to comment.
The plan for the building has made a good first impression with neighborhood groups, said 2nd Ward Ald. Brian Hopkins, who prioritized that the existing building—made up of several connected three- and four-story buildings—be preserved. He praised the plan to reuse the structure and noted the significance of a developer planning a residential project “in the plume of General Iron,” the controversial scrap metal recycler that ceased operations at the end of 2020 just steps from the Anixter Center building.
“General Iron was sort of a cork in the bottle for development. Once they were gone, we knew this was going to happen,” Hopkins said. “Generally speaking, I think the neighborhood supports it.”
Anixter originally listed the now-vacant property for sale in 2017 after the city opened up to new commercial uses a 760-acre stretch of historically industrial land along the North Branch of the Chicago River. Developers like Sterling Bay were snapping up properties at the time to redevelop the gritty corridor.
Anixter partially cashed out then, selling a 27,000-square-foot office building at 2001 N. Clybourn Ave. to Chicago developer R2, which leased it up to several office tenants. But the main building didn’t trade.
Then Anixter hired Cushman to put it back on the market last fall—even as the COVID-19 pandemic blurred the outlook for most types of commercial properties—with the added selling point that Sterling Bay had won city approval for its megaproject next door.
The sale “helps support Anixter’s mission for years to come and will lead to thoughtful multifamily redevelopment in one of Chicago’s fastest-growing areas,” said Cushman & Wakefield Managing Director Eric Sorensen, who was part of the team of brokers that marketed the property on behalf of Anixter.
Anixter Center CEO Rebecca Clark said in a statement last year that Illinois ranks 47th in the nation by funding for developmental disability services and that the sale of the property would “stabilize our long-term financial plan in a state where there has been a tragic lack of investment in these critical programs.”