Quest Realty Group owned a rare empty lot on Chicago’s North Side for almost seven years, even gaining approval from the city to advance on plans for a five-story apartment building in 2021. Then Tuesday, the local developer sold it for $5 million before construction took place.
So, who bought it? And what will come of Quest’s project proposal?
Jason Vondrachek of Quest was privately marketing parts of the lot at 5950 North Sheridan Road last year before he listed the whole site publicly on behalf of his firm Tuesday, according to brokerage websites and public listing information.
The 0.7-acre site sold for $5 million — about $166 per square foot — the same day, according to Redfin. Vondrachek represented both the seller — his development firm — and the buyer. The buyer hasn’t been identified.
The property has partial views of the lake and is a rare empty lot on the increasingly built-up North Side. Neighbors believe the site, which is near Kathy Osterman Beach in Edgewater, has been empty for at least 30 years, and possibly more, Vondrachek told Crain’s back in 2019.
Vondrachek and Quest Realty did not respond to requests for comment Wednesday.
The sale comes at a time when some builders have walked away from multifamily development plans due to financing challenges — interest rates remain high, and lenders consider construction loans riskier than mortgages.
The seller’s entitlements would have been a huge selling point. When landowners have already gone through the work of planning, zoning and community meetings, it makes the site more valuable. Buyers who want to skip this process can purchase the site and even specific, greenlighted project proposals along with it.
Given that several years have passed since the city approved the previous owner’s development plans, the buyer may have to hurry to avoid going through the process again. Typically, developers have six years from the time of city approval to line up construction financing and break ground, until having to re-submit development applications to the city.
Quest Realty went through this whole process with its proposal to build a five-story apartment building, which it called Loft Lago, on the Edgewater site, according to a report from local pro-development group Chicago YIMBY. It partnered with Hanna Architects on plans for a 59-unit building and got approval from the Chicago Plan Commission in early 2021. The building was to offer a mix of one-, two- and three-bedroom apartments as well as a rooftop deck with unobstructed views of the lake.
Vondrachek’s marketing highlighted the lot’s residential multi-unit zoning, saying the site was “perfect for condos.” The listing also stated that the “seller may be willing to finance acquisition at 60 percent (loan-to-value).”
It’s unclear why Quest decided to sell, but a construction loan hasn’t been taken out on the site, property records indicate. A legal entity headed by Vondrachek bought the site for $2.9 million in 2018. Since then, two mortgages have been taken out on the property: one for $2 million in 2018 and another for $1.75 million in 2019.
The firm bought the property from a private Jewish school that planned to build there before deciding on a different site, Crain’s previously reported.
Another reason developers may opt to sell off shovel-ready sites is the high cost of construction materials. This is expected to worsen as President Donald Trump threatens to impose sweeping tariffs and pushes for the mass deportation of suspected undocumented immigrants, affecting the cost of materials and labor supply in construction-related fields. Trump postponed tariffs on Canada and Mexico for 30 days on Monday, but a 10 percent tariff on all Chinese imports took effect Tuesday, Reuters reported.
“This is something everyone in the development and construction community is thinking about,” Rosie Tilley, head of development at New York-based Charney Companies, told Real Tactics Pro.
“How do you underwrite uncertainty?” she added. “That’s a really challenging point of risk to reckon with.”
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