QOZ Development Deal Overview: The Rosie
The Rosie (formerly known as Pilsen Gateway) is a $16.3 million joint venture equity investment with CEDARst, one of Chicago’s largest, fully integrated development firms. This multifamily development is located 1.5 miles from downtown Chicago, in the Pilsen neighborhood. The Rosie is part of our Origin Qualified Opportunity Zone (QOZ) Fund, which is a diversified portfolio of transformational, tax-advantaged development projects.
The Rosie project site was acquired in December 2019 and is currently under construction. The project is expected to be complete in 2021 and will feature 202 units with 7,584 square feet of first floor retail space. The Rosie is an attractive opportunity that provides a uniquely designed product in a fast-growing submarket that’s accompanied by a local, experienced development partner.
Not all opportunity zones are created equal and selecting a site that’s truly in the path of growth requires a deep understanding of local market trends. Pilsen is one of the few transitioning neighborhoods in a Chicago opportunity zone and is consistently recognized as one of the city’s fastest growing neighborhoods. Pilsen has also been listed on numerous occasions as one of the coolest neighborhoods in the world by publications such as Forbes and Time Out. The neighborhood includes award-winning restaurants, museums, art, and is in close proximity to downtown Chicago. Our site is located 1.5 miles from the central business district and is within a 10-minute walk to Chicago’s renowned Medical District.
The Pilsen neighborhood has experienced significant revitalization, but market rents are currently discounted as compared to the more established neighborhoods of Chicago. The neighborhood has a strong demand for rentals but is lacking supply of newly built apartments. The Rosie was designed for the urban renter with an emphasis on building amenities and smaller unit sizes to maintain a level of affordability. The development will feature a Class A product with condo quality finishes while providing an affordable price point for the neighborhood. The average unit size is approximately 616 square feet, taking advantage of efficient floor plans at rents below $2,000 per month. The second floor is set back to allow for an 8,500 square foot outdoor amenity deck on top of the first-floor retail bay. Residents will benefit from additional amenities that include a lounge, fully equipped gym, and ample parking.
Local Development Partner
CEDARst has developed and rehabbed over 5,000 multifamily units with over $1.5 billion in projects over the past five years. The company recently completed a full renovation of an old elevator factory that is within a seven-minute walk of our site. The project was fully stabilized after only eight months, showing the neighborhood’s strong appeal.
The Rosie is currently under construction with the riskiest components of the development behind us. The project has remained on budget and on schedule throughout the COVID-19 pandemic and is expected to be delivered in June 2021. New supply over the next few years will be severely limited due to Chicago’s new Affordable Requirements Ordinance that went into effect on January 1, 2020. This ordinance requires newly developed properties to set aside 30% of their units as affordable housing. This ordinance provides additional upside as the demand for newly built apartments increases as supply is kept in check.