Development partners Tree Street Group (TSG) and Magellan Development Group, along with Mark Goodman & Associates, have closed on financing for 410 N. Elizabeth, a 33-story tower in Chicago’s Fulton Market neighborhood. The development is being touted as the city’s first all-electric, geothermal multifamily high-rise and is the first phase of a two-tower mixed-use development.
Construction financing is being provided by Bank OZK through a senior loan as well as junior capital from Beach Point Capital and Circle Property Partners.
The high-rise will include 383 residences, with 77 designated as affordable. Upon completion, both phases will bring more than 724 units, with 146 earmarked as affordable, to the neighborhood.
“Closing on financing for 410 N. Elizabeth is a significant milestone for our team, one that dares to achieve what no one else has attempted—Chicago’s first geothermal multifamily high-rise,” said TSG principal Ted Weldon. “Our ability to move forward on this project underscores the faith of the many parties involved that Chicago is a national leader in sustainable development and a premier market for institutional investment.”
According to the developers, 410 N. Elizabeth will be one of the few tower cranes to rise in the city this year, with apartment deliveries coming off a 10-year low. With multifamily development more challenging to pencil in the current environment, the geothermal design and associated energy savings unlocked additional capital for the building.
“Labor and material costs, elevated interest rates—it all contributes to lean profit margins for developers, and without being very creative, these projects just don’t make sense financially,” said TSG principal Rodrigo d’Escoto. “Our firm’s approach benefits from the integration of design, construction, and project management—all of it—under one roof. We call it construction-informed design, and that approach is saving us as much as 15% in costs compared with the traditional design-bid-build projects. That is a significant reason why we were able to secure the necessary capital in an otherwise challenging market.”
The geothermal system was provided by Infinite Energy Partners, which will own and operate it. The system, along with other design features, is expected to reduce energy usage by 60%. As a result of the lower energy use, the building is projected to reduce emissions by 30% and energy cost savings by more than 25%. In addition, the building will feature a triple-glazed window wall system by Reflection Window + Wall that will help reduce noise pollution and enhance resident comfort.
“Our firm has a long-standing commitment to Chicago, and we’re very excited to be partnering with TSG on this project. 410 N. Elizabeth will not only set a new standard for green building but also signal our continued belief in the long-term outlook for Chicago,” added Magellan Development president J.R. Berger.
Partners on the development include Archeo Design Studio as the architect of record, general contractor Clark Construction Group, and Integra X Builders, which is providing construction management and geothermal expertise.
Each tower will feature a gridded façade comprised of metal paneling and glazing with ground-floor retail spaces adjacent to a park with green space.