Related Midwest Is Betting Big On Chicago While Others Hold Back

Within the last calendar year, Related Midwest, the Chicago-based arm of Related Cos., Stephen Ross’ New York-based real estate titan, has progressed four significant developments across asset classes throughout Chicago, even as conditions for large-scale new builds in the city have remained tight. 

The portfolio is an outlier in Chicago’s development market, with institutional capital largely sitting on the sidelines. Related is making a big bet, with risk spread across asset classes but concentrated within the city limits. 

Other major institutional investors have continued to eschew development in the Windy City amid familiar concerns over its volatile property tax environment and political climate. Broader difficulties with construction costs and financing have also driven would-be developers away from the market. 

Related is behind a pair of megadevelopments: a massive quantum campus on the South Side and the Chicago Fire’s new stadium at The 78. It has also nearly completed a new apartment tower on the lakefront and the first major new office building in the city in several years. 

Reagan Pratt, the director of the Real Estate Center at DePaul University, said Chicago has evolved in his career from a core gateway market for international investors and U.S. pension funds to a market that has been “quasi-redlined by institutional capital.” He said he thinks Related likely has a lower risk premium in Chicago than other firms do and that there is “no shortage of capital” at its parent company. 

“It’s really hard to find equity for a deal … and I’m like, wow, Related’s not having that problem here,” Pratt said. “Each deal stands alone, but they’re confident that they can get the equity they need on whatever these deals are.”

The size and scope of the firm’s active developments in Chicago set it apart from other developers that may not be as willing or able to take risks in the market. 

The company announced in early August that it was starting leasing at 400 Lake Shore Drive, its 72-story multifamily property on the site of the scuttled Spire project along the lakefront. The development is one of the largest new multifamily properties slated to open in recent years. When it is complete, which is expected to be in March 2027, it will add 635 apartments to a multifamily pipeline at historical lows.  

“400 Lake Shore Drive stands where Chicago itself began, at the very point where the river meets the lake and Jean-Baptiste Point DuSable first put down roots,” Related Midwest President Curt Bailey said in a release. “This is more than a residential tower; it is a revitalization of a significant piece of land in Chicago’s history.” 

The developer’s sweep also includes the 128-acre Illinois Quantum and Microelectronics Park at the former U.S. Steel Works Site, a major bet on emerging technology backed by the city and Gov. JB Pritzker in hopes of establishing the area as a hub for the sector. Related and CRG broke ground on the project in October. 

State lawmakers allocated $500M to boost the park’s development when it launched in 2024 alongside anchor tenant PsiQuantum. Some of the top companies in the industry have inked deals at the site since then, including Pasqal, IBM and Diraq.

“You need very talented people that understand each asset class, or just unbelievable people that can understand this works for office and this works for multifamily and this works for stadium and this works for science, that 95% of the population can’t understand,” Stone Real Estate principal John Vance said.

Related also landed Sidley Austin as an anchor tenant for the city’s first major trophy office tower since Salesforce Tower broke ground in April 2020. The law firm committed to “more than half” of the 1M SF high-rise and is expected to move into the Fulton Market building in late 2030.

The proposed tower still needs city approval, and Related shifted to the current plan in 2023, after previously pitching a residential and hotel building for the site.

“I think the deal will work. The lease-up will work,” Pratt said. “They’ve got a big anchor. It’s a good location.” 

Related is also the lead developer for The 78, which it hopes will be the city’s newest neighborhood running along Roosevelt Road, where the Chicago Fire’s new stadium is underway as the area’s anchor tenant.

The stadium broke ground in March and is slated to open in the second quarter of 2028. The 22,000-seat soccer field will be a long-awaited anchor tenant for The 78, which Related struggled to kick-start for years after the University of Illinois in October 2024 ditched its plan for a $285M research and teaching facility that was set to anchor the megadevelopment.

“If you’re good at doing deals and you’ve done some deals, it does get that momentum. We all know from Sterling Bay that that momentum doesn’t last forever,” Pratt said. “That is not my way of saying that I think Related Midwest is like Sterling Bay, but everything has cycles.”