The factors feeding Chicago’s longest development boom this century continue to be low interest rates, strong employment, an improved cityscape and a tight rental market. Virtually no major rental projects have been built in the city during the ’90s, while a steady stream of condo conversions has taken thousands of apartments out of the mix. This has been good news for developers, especially at the affordable end of the spectrum, where many renters have become buyers, fed up with rising rents and lured by low interest rates.

As interest rates have begun to tick upward recently and resales have slowed, some observers have wondered if builders were putting too much product in the pipeline. That should not be an issue during the coming year, according to Charles Huzenis, a principal in Jameson Realty Group, a company that markets many new construction projects.

"I think resales have only slowed down a little because there isn’t as much good stock on the market," Huzenis says. "The demand is still there."

And, he points out, although new construction may be at its peak in Chicago, the number of units being built within the city is still a small fraction of suburban volume.

Conversion king American Invsco both benefited from and contributed to the tight downtown rental market, selling more than 1,000 converted condos during the first eight months of the year and topping the New Homes list, with closings of $193.7 million.

Chairman Nick Gouletas has guided his company through the ups and downs of the market over the last 30 years, converting more than 20,000 units in 40 markets since 1969.

After Invsco, however, the biggest story among condo converters has been the success of DK / Equity, a joint venture of Equity Marketing Services and Draper & Kramer. The builder’s mammoth Grand Ohio conversion, at 211 E. Ohio, sold more than 350 units during its first six months on the market, putting the project at 60 percent sold. The 1985 27-story rental building has been configured with 586 units. The highrise at 401 E. Ontario, another DK / Equity project, is a 48-story tower with nearly 400 units being converted. The company had closed 468 units as of August 31 for revenues of $87.2 million.

Lofts have been a slightly smaller share of the market during 1999 than in 1998, but hundreds of loft units were sold and closed, and several large-scale projects were underway. Loft condos propelled MCZ Development to the number two spot on our list, as the builder closed units at its massive Randolph Place conversion, 165 N. Canal. The company also sold out Clinton Street Lofts in the West Loop and opened the Clinton Complex, a $50 million conversion of six loft buildings and one parking structure at 500 S. Clinton.

With partners Bernard Leviton, a familiar name in Lincoln Park real estate, and Jameson Realty Group, one of the city’s foremost marketers of new construction, MCZ has moved on to bigger and bigger loft projects. The company had sales of $162.8 million and closed on 581 units in 1998. MCZ has closed 300 units, for revenues of $64.5 million so far during 1999. The average price of its loft condos has been around $215,000, with a large number priced under $200,000 - the niche MCZ / Jameson / Leviton have focused on.

At a higher price point and with a "softer" version of the loft, Vilas Development closed a large number of units at its 20-story highrise conversion, 910 S. Michigan. Fewer than 45 units remained for sale in August at the project, which stalled for a number of years after it was first introduced before regaining momentum. Historic Homes also offered a soft loft product, with fully separated rooms, drywalled ceilings and traditional finishes, at City Center Club, closing 75 units for revenues of $18 million in the city. Concord Homes, expanding its presence in the city, opened sales at the adjacent highrise, 208 W. Washington. In addition to the 214-unit Concord at City Centre, the developer is building Renaissance Place, a loft and townhouse project in Hyde Park, and 1000 Adams, a new construction "loft" condo project in the West Loop.

The largest loft deal in the South Loop is Dearborn Tower, a conversion with more than 300 units, including five floors of new construction duplexes and penthouses to be built atop the existing 10-story building. It is the largest deal yet for Frankel & Giles Real Estate, whose fortunes have risen along with those of the South Loop. The company closed $7.9 million during the first eight months of 1999, but with sales of more than 170 units, it is certain to rise in the rankings as it closes many of those loft condos next year.

A number of builders involved in new construction projects that have not closed units yet this year, such as Ogden Partners and CMC Heartland Partners, are not listed here, though they have major deals underway. Other developers, such as LR Development, are launching some of the city’s highest profile projects, but because they are not yet closing units, their numbers don’t necessarily reflect their activity or market share. LR’s Park Tower, a 67-story highrise at 800 N. Michigan Ave., where raw space starts around $600,000, has single condos priced higher than many builders’ annual profits, but the first units will not close for another year. Another project to watch in 2000 is LR’s planned 330-unit condo complex, to be built at Lake Shore Drive and Chestnut, on a Northwestern University parcel.

MCZ Development is likely to maintain its high ranking next year as it gears up for conversion of the old Central Post Office, a 2.4 million-square-foot building that straddles the Eisenhower Expressway. Although planning for the project is at an early state, it could include 600 loft condos, 400,000 square feet of office space and 200,000 square feet of retail.