Lombard apartments sell for $86 million
A venture backed by a big Texas investment fund paid $86 million for a Lombard apartment complex, the second-biggest deal in what could be a record year for apartment sales in suburban Chicago.
The venture between Dallas-based Crow Holdings and Marquette Cos. of Naperville acquired City View at the Highlands, a 403-unit property just west of the Yorktown Center mall, from Sentinel Real Estate, according to DuPage County property records.
City View is a fixer-upper, or a “value-add” investment, in industry parlance. The two firms aim to boost their returns by renovating the property, overhauling its fitness center and clubhouse and rehabbing its apartments, said Marquette President Darren Sloniger.
“We felt there was enough meat on the bone” to get the returns they’re seeking, he said.
County records show that Crow, which manages investments for the family of legendary developer Trammell Crow, invested in City View through a $1.85 billion fund it raised last year. Sentinel, which paid $78.6 million for the property in 2006, sold it to the Crow-Marquette venture in August for $86.2 million, or $214,000 a unit, according to county records.
That’s makes it the second-biggest suburban apartment deal so far this year, after Connor Group’s $105 million acquisition of Stonebridge of Arlington Heights in February, according to a report from Appraisal Research Counselors, a Chicago-based consulting firm.
With so many investors scooping up suburban apartments, 2016 is on track to be the strongest year for suburban multifamily sales ever, topping the $1.2 billion record set in 2007, according to Appraisal Research. Suburban occupancies are high, rents keep rising and development is rising but not enough to create a glut.
The suburban market has “been very stable,” Sloniger said. “Anytime we hit any kind of softness, we’re always able to pull out if it in 60 days or so.”
Developed in 2003, City View was 96.5 percent occupied at the end of the second quarter, according to the Appraisal Research report. Rents at the property at 2720 S. Highland Ave. range from $1,180 a month for a one-bedroom unit to $2,295 for a three-bedroom.
Marquette’s other local properties include Catalyst, a 223-unit apartment building it developed in the West Loop, a 278-unit tower in the South Loop that it’s in the process of selling and an apartment project in the works in west suburban Lisle.
Source: Crain’s Chicago Business October 4th, 2016 Abby Gullun