While COVID, crime, fiscal instability and rising property taxes have made many real estate investors reluctant to funnel cash into the heart of the city, Onni expects big returns from downtown and its surroundings. The family-owned business is moving forward with plans to transform the southern tip of Goose Island with a mixed-use complex comprising nearly 2,700 apartments and revamp a mostly vacant 31-story office building in the Loop, a pair of projects that will likely cost close to $1 billion combined.

Meanwhile, he’s building a new 373-unit apartment tower in River West and paid around $63 million in January for the Ace Hotel in the Fulton Market neighborhood, which he rebranded as the first of a national chain of boutique inns. The company is also drawing up plans to develop another mixed-use building at 357 N. Green St. in Fulton Market that could be nearly 700,000 square feet.

The ambitious collection of projects goes against Chicago’s tainted reputation in the wider real estate world. Onni’s investments show that some developers see brighter days ahead, even as others are redlining Chicago in favor of other, faster-growing markets.

Of course, Onni’s gamble could go awry if crime in the heart of the city doesn’t go down, and especially if the rise of remote working steadily pushes people away from downtown. But none of those concerns have scared the company away from what it sees as a compelling market for commercial real estate.

“It’s easy for people to accept a lot of negativity,” Wlodarczak says. “But we launched new buildings during the pandemic and people moved in. It just shows that Chicago is incredibly resilient.”

Onni didn’t own anything in Chicago until 2012, but has become one of the city’s most active developers over the past decade as the downtown area flourished with jobs and residents. Today, it has office towers at 200 N. LaSalle St. and 550 W. Van Buren St., and has made major inroads into the apartment market with the dramatic expansion of the Atrium Village development in Old Town. (now called Old Town Park) and the development of a 356-unit apartment tower at 369 W. Grand Ave. at River North which opened last year.

Founded in the 1990s by Italian immigrant Inno De Cotiis (Onni is his first name spelled backwards) as an offshoot of a large family real estate business, the company has invested and grown in a handful of major US cities, including Seattle, Phoenix and Los Angeles. De Cotiis died in September 2020 and four of his sons – Rossano, Morris, Paolo and Giulio – today oversee the 18.4 million square foot portfolio of properties owned and operated by Onni. About 20% of its portfolio, including projects in development, is in Chicago, according to the company.

Chicago has been one of its top investment targets, in part because the company isn’t looking for a quick exit, Wlodarczak says. In three decades of business, Onni has never sold property in the United States. “This mindset allows you to look at the cycles we find ourselves in a little differently” and rule out short-term negative trends in promising long-term markets.

Onni leaders are responding to concerns about rising crime and property taxes in the city by pointing to favorable factors, such as the downtown population growth revealed by the 2020 census or the recent Site magazine report. Selection that the Chicago area attracted more business relocations last year than any other metro area. Market strength is reflected in Onni’s 2,100 downtown apartments, which the company says are almost fully rented, including recent activity at rents that have topped pre-pandemic levels.

Chicago has real problems that shouldn’t be minimized, but it also has a public relations problem that is keeping some investors away, says Brian Brodeur, who oversees Onni’s development work in Chicago.

“Are we the most dangerous city in America? No. Do we have the highest crime rate in America? said Brodeur. “The world needs to be exposed to our best and brightest.”

Yet many developers are not so optimistic about the downtown real estate prospects. Chicago ranked 20th in the nation last year in volume of purchases by new-to-market commercial real estate investors, rising from an average of fifth between 2015 and 2019, according to data from research firm Real Capital. Analytics.

Onni stands out from a group of real estate investors who are struggling to make financial sense of new projects today, given new affordable housing rules and rising taxes, says Armando Chacon, president of the West Central Association, which assesses development proposals on behalf of several different communities. in the city.

Chacon says major projects like Onni’s could help remind investors of the vast pool of tech-savvy talent and other perks that drew developers to the city in the first place. “Onni sees that something very special is happening here,” he said.

Wlodarczak says Onni is concerned, like many other developers, by Cook County Assessor Fritz Kaegi’s decision to shift more of the local property tax burden onto commercial properties. “It could really hold back business,” he says, adding praise for Metropolitan Water Reclamation District Commissioner Kari Steele as a promising challenger to Kaegi in an election later this year.

Nonetheless, Onni continues to make bold bets on different types of properties, even ones that don’t look good at the moment. Despite record vacancy in the downtown office market and cloudy post-pandemic demand for office space in the Loop, the company paid more than $166 million in December for the building. Outdated offices located at 225 W. Randolph St., with a plan to spend over $150 million more to renovate and lease it.