On behalf of DAC Developments (the “Sponsor”), Capstone is pleased to present an LP equity investment opportunity to support the development of 424 S Wabash. 424 S Wabash is a to-be-built, 27-story, 280-key Sonder apartment/hotel project with 9,348 SF of office and retail space located between East Van Buren St and East Ida B. Wells Dr in The South Loop neighborhood of Downtown Chicago, IL. The South Loop neighborhood is a prime location for this type of development, as it is a stable and high-income area with several significant demand drivers. The immediate area contains a wide range of professional office centers, residential high-rises, universities and colleges, medical facilities, world-renowned cultural destinations, tourist attractions, and offers unobstructed views of the Chicago skyline and Lake Michigan.

The development is planned to comprise 27 stories with 2,941 SF of retail space, 6,407 SF of office space, and roughly 14,000 SF of Class A amenity space for guests. The development will be master-leased by Sonder Hospitality USA for 10 years, with two five-year extension options, providing reliable and strong cash flow to underpin the investment. The office space is also leased to Sonder USA Hospitality, Inc, to serve as their Midwest U.S. headquarters, further de-risking the project and demonstrating Sonder’s commitment and expected performance of the project. Additionally, the Chicago CBD hospitality market has seen a strong rebound after COVID restrictions have been lifted nationally, generating a strong uptick in demand for hotels and short-term rentals.

Sonder Master Lease

Sonder's Proven Performance in Chicago Market

Robust Hospitality & Multi-Family Fundamentals in Submarket

Proximity to World-Renowned Demand Drivers