On a cool, spring Chicago morning, Steven Fifield instinctively sits cross-legged and assumes a meditation pose on a grassy rooftop at Left Bank at K Station, his firm's newest high-rise apartment community. The impromptu gesture surprised the MFE photographer, but actually makes perfect sense to anyone who really knows the developer. Fifield, chairman and CEO of the Fifield Cos., has earned a national reputation for his perceptive abilities to take a step back and foresee the next great real estate deal.
In fact, from the Left Bank rooftop, Fifield can see his latest—and perhaps biggest—vision, K Station: a $750 million, 8-acre mixed-use, master-planned community under way in Chicago's West Loop. The project will feature six high-rise towers (including Left Bank) ranging from 30 to 43 stories, a total of 2,400 luxury rental units, and 40,000 square feet of commercial space. Thanks to his smart market sense, Fifield bought a portion of one of the West Loop's last available tracts of land back in 2003 when the site was still affordable. He anticipated that the industrial park covered with surface parking lots would one day be the city's next hot spot for residential and commercial development.
“Steve is very astute at reading demographics and job growth and understanding where things are going—seeing the future, if you will,” says Scott Sarver, president of DeStefano and Partners, a prominent Chicago-based architecture firm that has worked with Fifield on a number of projects in Chicago and California. In 10 years, Sarver, too, believes that K Station will be the next big neighborhood in downtown Chicago. “K Station is a predominantly older, industrial area [where] most of the existing warehouses have been converted to lofts, and there are a few 5-, 6-, 7-story buildings around,” he says. Fifield's project is “the next step, where the area goes to high-rises and there will be enough mass to define that as a community in and of itself and regenerate the neighborhood.”
Fifield Cos. is no stranger to redevelopment in Chicago's West Loop. The firm, which Fifield founded in 1977 and was called Fifield Palmer until '82, got its start pioneering office development in downtown Chicago and the surrounding suburbs, including the West Loop. Now, with more than 3.9 million square feet of office space either completed or under construction, the company has lured high-profile projects such as the headquarters for The Quaker Oats Co. (now Pepsico) and the Chicago Transit Authority. “Steve was definitely ahead of the curve in terms of recognizing what the West Loop could become,” says Tracy Larrison, a senior vice president for commercial real estate at Cleveland-based National City Bank, which provides financing for both Fifield's residential and office buildings.
Those same commercial operations, however, faced their fair share of challenges. In the early '90s, Fifield, like numerous developers nationwide, temporarily shut down its operations when the national office market tanked. Fifield revived its business in the mid-90s by buying, renovating, and selling half-occupied office buildings as the market strengthened. Most significantly, the firm paid $19 million to purchase office space on top of Chicago's famous Civic Opera building, renovated the space for $16 million, and then sold it to a REIT for a whop-ping $65 million. Using the money from these deals to fuel its rebirth, Fifield decided to diversify its business and develop both residential and commercial products.
Today, Fifield's portfolio is 70 percent residential and 30 percent commercial with a focus on urban centers with high barriers to entry and constrained supply. (The firm's official operating moniker is Fifield Realty Corp.) The forward-thinking merchant developer stays ahead of the curve by keeping a close eye on market opportunities across the country and adapting its strategy as needed. The result? The firm is developing more than 4,700 residential units in key markets—the K Station apartment communities in Chicago; the ultra-luxury 1200 Club View condos in Los Angeles, where units start at $4 million; and the 35-story Allure Waikiki, a condo project five minutes from Honolulu's famous Waikiki Beach.
EXTRAORDINARY VISION A self-described “deal junkie,” Fifield is always on the lookout for a hot real estate opportunity and uses his vast broker and financial connections to get the projects from pen to paper. “Through his voracious appetite for written material about real estate and his incredible high-level network of contacts, he sees trends before they are apparent to most and is able to really analyze how to best exploit these trends,” says Alan Schachtman, a senior vice president at Fifield, who manages its Chicago and Las Vegas developments.
Case in point: Chicago's K Station (formerly Kinzie Station), where the West Loop meets the River North neighborhood. The site was an amazing find for the firm, both in terms of price and location, Fifield says. The initial land acquisition in 2003 cost $9,000 per unit; now the land is worth more than $40,000 per unit.
“If you sat in a helicopter above downtown Chicago, there are only two holes in the market—one near the lake called Lake Shore East and K Station,” he says. “Everything else is filled in with high-rise and mid-rise buildings. There is very little land left.”