Developer Riverside lands financing for 199-unit West Loop apartment tower
566 West Van Buren - Rendering
By Rachel Herzog | April 8, 2026
AA Chicago developer has lined up financing to begin work on a West Loop apartment tower, kicking off a project it had suspended amid high costs and scarce capital.
Riverside Investment & Development secured a $64 million construction loan through a U.S. Department of Housing & Urban Development program for rental housing developers for a 12-story, 199-unit building at 566 W. Van Buren St., executives at the firm said. The $85 million development is also being funded with equity from Riverside’s partners on the project, which include Blue Star Properties and German family office Metropolis Investment Holdings.
Riverside, known locally as the developer of the nearby BMO Tower and other downtown office skyscrapers, first unveiled plans for the project in 2022. But like many other developers in recent years, the firm had to contend with inflation driving up construction costs and interest rate uncertainty, so they put the project on pause.
“This is a deal that we’ve been working on for a number of years,” Riverside Executive Vice President Mike Potter said. “Capital markets today are very constrained. That’s why there’s very few cranes and active projects that are out there. As a team, we pursued a number of different avenues to get this started. . . .To get things done these days, it requires a lot of creativity.”
Riverside Vice President Stefani Kalter said it was “really attractive to get to lock in interest rate certainty” with the financing through HUD’s 221(d)(4) program. Loans through that program are fixed-rate, with interest rates that range from 5.6% to 6.1%, and are fully amortizing for 40 years, according to HUD’s website.
The project is targeted for completion in early 2027.
Chicago’s development pipeline has been muted when it comes to large-scale projects because of challenges in the debt and equity markets over the past few years. Four apartments complexes totaling about 800 units are on tap for completion in 2026 and about 2,100 units are anticipated in 2027, according to data from Integra Realty Resources.
While those numbers show some recovery, the supply constraints have pushed rents higher and higher. The net monthly rent at top-tier apartment buildings in downtown Chicago was up about 8.6% year over year in the fourth quarter, according to Integra.
Rents at 566 W. Van Buren St. are expected to land at about $4.25 per square foot, which would be a slight discount from the pricing at other nearby luxury buildings, Potter said.
“I think we’ve got a great value proposition overall,” he said.
The project is being built as of right, meaning it didn’t require zoning approval from the City Council and isn’t subject to the city’s Affordable Requirements Ordinance, which mandates that 20% of units in many new development projects be marketed at affordable rates.
“Just from an execution standpoint in today’s market, the size is part of what helped us get it started,” Potter said.
Riverside is also working on a city-subsidized office-to-apartments conversion at 135 S. LaSalle St. That project and the West Van Buren Street development mark the firm’s first residential forays in the city. Riverside built a nine-story apartment complex, The Main, in downtown Evanston in 2016.
Real estate services firm Draper and Kramer arranged the HUD financing on behalf of Riverside.