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Wilson Yard Developer Finding Tough Retail Market

By Lorraine Swanson, Editor, Lake Effect News

With construction of the Wilson Yard development at Montrose and Broadway proceeding at breakneck speed, developer Peter Holsten can finally see the light at the end of the tunnel.

Barring any unforeseen circumstances, including an ongoing lawsuit filed by Fix Wilson Yard, rentals of the affordable senior housing units are targeted for next January, with affordable family housing units expected to open up in February. Smaller retail build-outs are expected to begin in April 2010, followed by the grand opening of the new Target in July 2010.

Artist rendering of Wilson Yard development from 46th Ward website
Artist rendering of Wilson Yard development from 46th Ward website

“I think it will be a nice set of amenities for the neighborhood,” said Holsten, president of Holsten Real Estate Development, the Wilson Yard project’s sole developer.

Holsten said his firm will begin reviewing a waiting list of prospective tenants for the senior and family housing next month. The firm will also start advertising, putting up signs and placing ads.

“We’ll be marketing to Truman College. It will be good to have folks just walking to work,” Holsten said. “We’ll get the word out to Truman and neighborhood groups.”

In an interview with Chicago Journal last December, Holsten said they’ll be looking for tenants “who are working and are good citizens.”  Just how mixed the housing will be in terms of income is still being debated by some community members, who claim that most if not all of the rental units will be below market rate.

Holsten, whose firm has built more than $500 million in affordable, mixed-income and low-income housing developments, as well as commercial developments throughout the city, said they’ll be looking for a balance of tenants with annual household incomes of $20,000, $30,000 and $40,000, with the cutoff being $50,000.

“We’re very management intensive. We’re in people’s faces all the time,” Holsten told Chicago Journal last year. “We’ll screen tenants and do monthly apartment checks for overpopulation, cleanliness, etc.”

The current recession, however, is affecting commercial space rentals. Holsten said the development has 23,000 square feet of commercial storefronts to lease, one-third of which has been leased to an AT&T cellular store, a Subway sandwich shop, a nail salon, and a game’s store.

“This is a very tough retail market,” Holsten said. “Not a lot of retail [companies] are expanding right now.”

Holsten said his firm is talking to and/or in negotiation with prospective national retail and restaurant tenants including Chili’s, Sally’s Beauty Supply and XSport Fitness. Talks are also in progress with the Panera Bread Company to lease the corner space at Broadway and Montrose.

“We don’t have a commitment yet,” Holsten said of Panera Bread, who described Panera as “seriously looking.”

Holsten will also be reaching out to non-profit groups to lease available commercial space. One possibility is an adult daycare provider for the 3,000-square-foot retail space on the ground floor of the senior housing building.

As for other possible non-profit tenants: “The rents may be a little out of reach along Broadway,” Holsten said.

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