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Related Cos. Buys LR Development for $25 Mil.

NEW YORK CITY--Chicago acquisition sets the stage for aggressive Midwest development. Related is also purchasing two properties LR had planned to develop in a deal worth $310 million.

By John Howe | Updated on July 31, 2000

Sources inside the Related Cos. say that today is the day the developer will purchase a 70% stake in LR Development of Chicago for $25 million. Details were sketchy, but insiders tell GlobeSt.com that the deal also involves Related’s closing on two properties that LR had planned for development in a deal valued at $310 million. The transaction will give the company a firm foothold in the Chicago market where it plans to be an aggressive player.

John Petrovski, group vice president for Heller Real Estate says, “this is a good move for both companies. Related bring financial strength and new leadership, LR brings a pipeline of business and a team on the ground.”

Related is entering a market where the vacancy rate from 1988-97 was 7.5% and rents increased by 4% according to the National Multi Housing Council. And like some other major cities, it is seeing older suburbanites moving in now that their children are on their own, increasing the demand for housing.

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