Chicago's largest conversion is a $15,600-a-unit land trade

The number that makes the $113 million financing at 500 North Michigan Avenue work sits outside the raise itself: Commonwealth Development Partners and Triangle Capital Group paid $5 million for the 25-story Magnificent Mile office tower in an off-market acquisition in August 2025, and spread across the 320 apartments now planned for the building, that works out to roughly $15,600 a unit of basis.

JLL Capital Markets arranged the raise, securing a $71.5 million non-recourse construction loan through Santander Bank and $41.8 million in joint venture equity from Washington Capital Management on behalf of an institutional client—debt that covers about 63% of the capital JLL placed, with the full $113 million coming to roughly $353,000 for every apartment.

Construction began in May 2026 and completion is expected in March 2028, which puts the financing announcement roughly four months into a 22-month build for what JLL describes as the largest office-to-residential conversion currently underway in Chicago. The pro forma leans on two public programs—the Illinois Affordable Housing Special Assessment Program and federal historic tax credits the project is pursuing.

The risk a construction lender would ordinarily see carried by rents is instead sitting inside two public programs: whatever the state assessment program is worth over the hold and whatever the historic credits fetch in the market, both are policy-dependent in a way that Michigan Avenue leases are not, and debt at roughly two-thirds of the placed capital is priced off the confidence that the incentives survive the schedule. Conversions clear when the entry basis is deep enough to be a land trade, and $15,600 a unit for a Magnificent Mile parcel is why the leverage works here.

Delivery lands in the spring of 2028, at the opening of the supply window patient multifamily capital should be underwriting now. The 2028-29 gap is a construction-financing problem before it is a leasing problem, and Washington Capital's institutional client has just taken 320 units of exposure to it.

The closest comparable is FRP and Woodfield's $81.5 million Estero mixed-use, which broke ground in August: 296 apartments with first homes landing in 2027, leasing into the same stretch of the decade.

Watch the next Magnificent Mile conversion. If a sponsor clears similar leverage on a worse basis, Chicago has an office-to-residential market. If it does not, this one is a purchase price a competitor is unlikely to repeat and an incentive stack doing work the office market would not.