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Optima II Apartment Project Scores $ 160M Construction Loan

Local developer David Hovey landed a $159.5-million construction loan for a 53-story apartment tower he’s building in Streeterville, next door to another residential high-rise he completed in 2013.

Hovey said he and his partner, Tampa, Fla.-based DeBartolo Development, closed last week on the loan for the 490-unit building at 220 E. Illinois St. The development venture borrowed the money for the $225 million project from Bank of America, PNC Bank and Fifth Third Bank, he said.

The venture began work on the site last fall. Construction halted for several months as the development team finished its construction drawings, not because of financing delays, said Hovey, CEO of Optima, a Glencoe-based developer.

Optima Chicago Center II, as the building will be called, features a similar glassy exterior to its sibling to the west, Optima Chicago Center, a 325-unit building the developers finished in 2013. But the second building sits on a larger site, providing room for indoor and outdoor swimming pools, big landscaped terraces on the seventh and eighth floors and an outdoor plaza at street level that faces south.

“It will be similar architectural language but drastically different in massing and volume,” Hovey said.

AMPING UP AMENITIES

The building also will include an indoor basketball court, a golf simulator and theater, examples of how new high-end buildings are trying to use amenities to outdo each other in the battle for tenants.

Amenities are one way for developers to differentiate themselves amid a strong but increasingly crowded downtown apartment market. Developers are expected to complete more than 7,600 apartments downtown in 2015 and 2016, an unprecedented increase in supply, according to Appraisal Research Counselors, a Chicago-based consulting firm. That includes nearly 1,200 apartments in Streeterville, with another 700 in the pipeline, excluding Optima’s new building.

Yet Hovey doesn’t think Optima II will have a hard time attracting tenants when it opens in 2018.

“We think we have a pretty unique product that will stand out,” he said. “It offers people a choice that they can’t get in other places.

( Crains )