DePaul University, in partnership with Chicago-based real estate services firm The Scion Group, will transform a 26-story, extended-stay residence for executives on Chicago’s “Magnificent Mile” into the university’s first downtown student apartments, under a lease agreement announced today.

The lease of the recently rehabbed 119-unit corporate residence at 320 N. Michigan Ave. will allow DePaul to offer university-affiliated housing to an additional 230 full-time students over age 21 in the fall of 2002. The building, which will be called DePaul on Michigan, will be operated and managed by Scion. It is located six blocks north of the university’s Loop Campus and a short el ride from its Lincoln Park Campus. DePaul currently offers housing to 2,600 students, all in Lincoln Park.

The lease agreement comes just seven months after DePaul, Roosevelt University and Columbia College announced plans to break ground this summer on University Center of Chicago, a new $130-million-dollar student residence hall at State Street and Congress Parkway. Opening in fall 2004, the 18-story, multi-use University Center building will house 1,720 students from the three educational institutions, which all have campuses in the South Loop. “The lease of 320 N. Michigan Ave. and construction of University Center will significantly increase DePaul’s capacity to meet the downtown student housing demand,” said Ken McHugh, DePaul executive vice president for Operations. “Overall, the presence of students living in these facilities will expand the Loop’s higher education corridor and support the city’s goal to boost the area’s after-hours vibrancy.”

McHugh noted that a Scion survey of area universities conducted for the University Center, project showed a shortage of student housing in downtown Chicago due to a record number of student enrollments at area universities, the growing popularity of urban campuses, continuing increases in land and housing costs and the conversion of rental properties to condominiums.

“We’re excited to provide DePaul’s students with this new, high-quality housing option in a culturally rich area of downtown Chicago,” said Robert Bronstein, president of The Scion Group. “DePaul’s 20 percent enrollment growth since 1997 and the university’s desire to offer a holistic college experience have created unprecedented demand for student housing among new and continuing students.” Potomac Hospitality Services, which holds the master lease on the building, offered to sublet the facility for DePaul’s use, with several options to renew. According to Jon Herman, Potomac’s senior vice president of development: “We recognized the shortage of student housing in Chicago and quickly identified DePaul as the top candidate for 320 N. Michigan.” Based in Washington, D.C., Potomac has developed, owned or managed more than 4,000 hotel rooms and furnished apartments over the past 25 years, including a property that has been converted to student apartments for George Washington University. Constructed in 1983 as a luxury apartment building, the 320 N. Michigan Ave. building was remodeled into an executive residence just 18 months ago. Most of its 119 units are studio and one-bedroom apartments, ranging in size from 550 to 700 square feet. Each furnished unit features a modern kitchen with maple wood cabinets, dishwasher, electric stove, refrigerator and breakfast bar; in-unit washer-dryers; air conditioning, track lighting and ample closet space. Many rooms have views of “Magnificent Mile” landmarks.

The renovated first floor of the white stone and glass building includes a marble lobby with a 24-hour security desk, a small exercise room and meeting/office space. DePaul is the nation’s largest Catholic university and Chicago’s biggest private university. Founded in 1898, the university enrolls a richly diverse population of more than 21,000 students who take classes on two city and six suburban Chicago campuses. Since 1990, DePaul has spent more than $200 million ($120 million since 1998) on physical improvements to its Chicago and suburban campuses. Several of the projects are innovative, mixed-use developments that combine academic, retail and office space.

The Scion Group is a real estate services partner to colleges, universities and other not-for-profit institutions. The company combines professionals from market, corporate and institutional real estate, with an emphasis on student housing. Scion has advised such recent Chicago student-housing projects as the University Center of Chicago and the Illinois Institute of Technology’s new 370-student facility on State Street.