Hubbard Street Group buys vacant Fulton Market building for $2.75M

Hubbard Street Group has acquired the vacant three-story industrial building at 167 N. Morgan St. in Chicago's Fulton Market for $2.75 million, according to Connect CRE. The buyer plans a mixed-use redevelopment of 20 apartments over roughly 3,300 square feet of ground-floor retail, with CBRE representing the seller alongside Phil Golding of Savills. CBRE senior vice president Tom Svoboda called the site "right in the middle of the action" on Morgan between Randolph and Lake, steps from the Morgan CTA station.

At about $137,500 per planned apartment, the price is a land-basis figure that only works if the existing three-story structure comes down or gets gutted and rebuilt above the retail. The acquisition cost is modest next to what 20 apartments in Fulton Market will take to deliver, so the return calculation sits in the construction budget rather than the entry price.

The neighborhood's institutional activity runs at a different scale. In August, this publication reported on a CBRE-brokered sale of two Norwalk office buildings to a joint venture planning 286 apartments. That deal was backed by a $75.5 million construction loan underwriting the office's next use — a reminder that adaptive-reuse math typically gets tested at a scale this deal does not attempt. Here the entire land check is 3.6 percent of that single loan, and the program is 20 units.

Small infill sites in supply-constrained nodes are increasingly the only inventory mid-size local operators can win, because institutional bidders need a scale this parcel cannot supply. The risk sits in the exit: 20 units is a boutique rental building whose rent roll will be measured against Fulton Market's newest luxury towers, and the 3,300 square feet of retail will be judged by whether the foot traffic Svoboda cites converts to leasing spreads.

For Hubbard Street Group, the bet is that Fulton Market's residential demand will outrun the cost of building 20 apartments above a small retail base. No construction budget, timeline, or expected delivery date is given, so the only checkable part is the entry, a vacant building on a block where the CTA station is the amenity.