Construction underway on another Campustown apartment complex

Construction underway on another Campustown apartment complex

CHAMPAIGN — A Rhode Island developer is building a seven-story, 538-bed luxury apartment building near Campustown that it hopes to open in the summer of 2019.

Meanwhile, local developers with student housing projects nearby are worried the market is oversaturated, with Gilbane Development Co.'s project just the latest in a long line of others like it.

"The market's overbuilt. Anybody with half a brain can see that, so you got to pick and choose your spaces really carefully," said Dan Hamelberg, developer of the Midtown Plaza, which has 104 units.

"We got our occupancy permit today and tomorrow, June 1, we're moving our first residential tenants into the building," Hamelberg said. "The buildings are mostly leased."

He's in the process of finalizing leases with two national tenants for the commercial space on the first floor of those two five-floor buildings.

"These are pretty good leases. We're excited about them," Hamelberg said.

Gilbane's building will be located at 210 S. Fourth St., C, the site of the former Marquette School and a couple blocks north of the County Market grocery store.

Gilbane bought much of the block in August 2017 for $6.78 million, according to public property records.

The luxury student housing will include fully furnished student apartments with a private bathroom for each bedroom; in-unit washers and dryers; quartz countertops in fully equipped kitchens with stainless-steel appliances; simulated-wood flooring; and 50-inch flat-screen TVs.

Residents will have access to a heated pool with a hot tub, rooftop terrace, fitness center, business center, computer lab, clubhouse, game room, picnic area, individual and group study rooms, and a coffee bar.

"Rents are TBD," said Stephanie Handfield, marketing manager for Gilbane.

The complex will be called Octave, a reference to Gilbane's "Next Level of Student Housing" program.

"We worked with local marketing consultant Surface 51 to develop the name," Handfield said. "We also found it interesting to learn that Octave Chanute was a famous engineer with ties in the area."

The former Chanute Air Force Base in Rantoul was named after Octave Chanute, an aviation expert who helped inspire the Wright Brothers, according to the National Aviation Hall of Fame.

Several apartment buildings have been built in Campustown and Midtown over the last few years, with more on the way.

Besides Octave and the Midtown Plaza, Minnesota developers are building a 14-story luxury apartment facility at Fourth and John streets, and a Chicago firm is planning a 17-story high-rise at Sixth and Green streets.

And Green Street Realty is putting up a four-story apartment building at Third Street and University Avenue. It's scheduled to open this August, with 93 apartments and commercial space on the first floor.

That area has been popular, owner Chris Saunders said, especially because of how close it is to the University of Illinois and its engineering school.

"That's where there's been available ground. As campus has grown more north, there's just been some opportunities to pick up bigger pieces of land," Saunders said. "It's also very close to the engineering campus and very popular with students. Properties lease pretty well in that general area."

But he agreed with Hamelberg that it might be time for the market to level off.

"We're seeing the tail end of a lot of this," Saunders said. "We have a few more projects scheduled, but I think there's not a lot of available land. There might continue to be some smaller projects."

Hamelberg said local developers are starting to slow things down.

"Local developers and local banks know what's going on," he said. "The time has come for people who are outside of our market to realize that we have a vacancy rate, and it will go higher if you come in with a couple hundred more units."

While Hamelberg thinks there are too many apartments right now, he's still optimistic about the market, as UI enrollment keeps growing.

"We'll get through this, and we've been through these waves before," he said. "With the University of Illinois growing ... over time, the supply-and-demand curve will fall back in line."