Sterling Bay’s Lincoln Yards, located just north of downtown Chicago, was greenlit in 2019 with the ambitious goal of developing 14.5 million square feet of office, residential, retail, and entertainment space along the Chicago River. The developer invested $100 million in an old industrial site to create a hub connecting the nearby Lincoln Park, Bucktown, and Wicker Park districts. So far, Sterling Bay has completed a 320,000-square-foot life science center and has made progress on a river walk. The project’s primary financial backers, J.P. Morgan Asset Management from New York and Lone Star Funds from Dallas, are now looking to sell their stakes.
Sterling Bay is currently negotiating with a new investor, Kayne Anderson Real Estate from Los Angeles, and has recently restructured the terms of a $126 million loan from Bank OZK.
The project is influenced by various economic and social trends, as well as local tax rates.
“Lincoln Yards is dealing with the same difficulties as every project in commercial real estate right now. High interest rates, lack of liquidity in the market, property taxes that are among the highest in the country, and reduced demand for office product, resulting from work-from-home post-pandemic, have made even the most attractive developments like those in Fulton Market and Lincoln Yards more difficult to execute,” Sterling Bay Managing Principal Keating Crown told Crain’s.
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