Multifamily Investment Sales Broker at Marcus & Millichap
P: 630.570.2246
Randolph Taylor

Value-Add multifamily

11902 Longwood Dr |  Blue Island, IL 60406

View Offering Memo

property details

Price:                              $310,000

Units:                              5

SF:                                   2,856

Yr Built:                         1961

Occupancy:                  100%

Gross Inc                       $45,420

Underwritten NOI:      $19,147

Cap Rate/Proforma:    6.18%/8.44%

Investment Highlights

  • Fully Occupied 5-Unit Multifamily Property
  • Long-Term Tenancy, Written Leases, and Strong Collections
  • New Roof, Gutters, Boiler, and Windows
  • Value-Add Opportunity

Investment Overview

Marcus & Millichap is pleased to present to market this fully-occupied, 5-unit value-add multifamily offering in Blue Island, Illinois, a southern suburb of Chicago. The property consists of four one-bedroom one-bath units and one two-bedroom one-bath unit. Amenities include off-street parking, storage units, and on-site laundry.

Recent improvements to the property include a new flat membrane roof, gutters, boiler, and vinyl windows limiting exposure to large capital expenditures and reducing utility costs improving net operating income.

Each unit has an annual written lease with long-term stable tenancy and a history of timely rental payments. As of the drafting of this offering memo, per the landlord, all tenants are current on their rent.

This value-add multifamily offering provides an investor the upside opportunity to increase current below-market rents conservatively $125 per month with modest unit renovations.

The property is located approximately 16 miles south of Chicago’s Loop, two blocks from the 119th Street Metra station, the 119th Street and Vincennes Road bus stop, and two minutes from Interstate 57.

Map Overview

Multifamily Investment Sales Broker at Marcus & Millichap
P: 630.570.2246
Randolph Taylor
Adobe Stock

Freddie Mac played a critical role for multifamily borrowers in 2020 during the COVID-19 pandemic and the subsequent economic downturn, financing roughly 803,000 rental units, with more than 95% of those units being affordable to households earning 120% or below the area median income. Freddie Mac Multifamily also set a record $82.5 billion in loan purchase and guarantee volume last year, surpassing the prior record of $78.4 billion in 2019.

“In a volatile year, Freddie Mac was a stabilizing force in the multifamily market,” said Debby Jenkins, executive vice president of Freddie Mac Multifamily. “The fact that we hit a record in the midst of a pandemic shows our commitment to be a consistent force of debt financing for multifamily operators in both good times and bad. Our network of Optigo lenders did not skip a beat, and the Freddie Mac team kept up with a demanding pace to ensure we fulfilled our mission. At the same time, we exceeded our mission-driven benchmarks, the vast majority of units we financed are affordable to low- and moderate-income households.”

The $82.5 billion in production last year combined with the $17.5 billion in volume for the fourth quarter of 2019 put the government-sponsored enterprise (GSE) right at the $100 billion cap mandated by the Federal Housing Finance Agency. Freddie Mac also surpassed its mission-driven requirement of 37.5%, with approximately 40% of volume meeting the definition. These mission-driven transactions benefited affordable housing, smaller multifamily properties, seniors housing, manufactured housing, and rural housing. A new $70 billion cap has been established for 2021 with a 50% mission-driven requirement with new and different criteria.

Freddie Mac served all corners of the multifamily market in 2020 through its offerings, including nearly $5.3 billion small-balance loans, a record $12 billion in Targeted Affordable Housing loans, and $3.7 billion in seniors housing loans, including senior-living apartments. The GSE also securitized a record $78 billion through its securitization offerings, such as K- and SB-Deals, transferring a majority of expected and stress credit risk to third-party investors. Freddie Mac also provided $500 million in low-income housing tax credit equity investments to support underserved communities.

“We are proud that our achievements in 2020 reflect the critical role we play in the multifamily market,” said Richard Martinez, senior vice president of production and sales at Freddie Mac Multifamily. “During a global pandemic, Freddie Mac continued to provide critical liquidity to the market and continued working to address the persistent affordability challenges facing countless renters. We quickly adapted to the environment around us, rolling out a forbearance plan for borrowers and protections for renters to help address the challenges presented by COVID-19.”


Multifamily Investment Sales Broker at Marcus & Millichap
P: 630.570.2246
Randolph Taylor

 

Courtesy Crescent Communities Crescent Communities’ NOVEL Upper Westside in Atlanta offers creative, flexible living spaces for its residents.

When it comes to navigating multifamily real estate investments through a global pandemic, life in the suburbs has been pretty good. Of the two dozen development deals that The NRP Group had on the books in January of last year, 23 of them were closed successfully, resulting in a record production year for the Cleveland-based developer of affordable and market-rate housing.

“We started 5,000 units representing roughly $1.4 billion in real estate value, and 60% of that pipeline was in the affordable business, so we do feel blessed and very thankful again that we are a diversified company,” says NRP principal and president of development Ken Outcalt. “And we’re bullish on both sides of the business going forward. Our past experience of not getting aggressive in high-density urban deals has benefited the portfolio, and we don’t have any of those urban deals right now. We are 100% suburban.”

To be sure, 2020 was not without its challenges. The onset of the pandemic and related shelter-in-place orders in March and April resulted in a virtual freeze on apartment investment and development activity as debt providers vanished, equity players sat on cash, and contractors temporarily shuttered job sites. But despite a hard stop on buying and building in the second quarter, most multifamily firms report a rebound across the second half of the year and are buoyed by stability in underlying business fundamentals and capital markets that portend a thriving rental sector for 2021.

Like NRP, Charlotte, North Carolina-based Crescent Communities headed into the year with high expectations and the deal flow to match. “Obviously we were at the height of the real estate cycle,” says Crescent senior vice president and chief investment officer Jason LaBonte. ”Everyone was flush with cash, the fundamentals were phenomenal, and our pipeline was strong. We do roughly 10 deals a year, and we were out looking to capitalize the 10th for 2020 when the pandemic hit.”

Although six of those development deals were paused due to pandemic-related capital market pricing issues and two deals had joint-venture partners that ultimately walked, Crescent was expected to close out 2020 with all 10 deals intact.

“A lot of equity partners simply needed some insight into what the future was going to look like, and we all needed to get further into this and realize that people still needed a place to live and that Class A multifamily would be impacted less by the job losses,” LaBonte says. “The JV partners are back in the game, and we’ve replaced the ones who walked, so we’ll get all of our deals done for the year.”

Investors, developers, owners, and operators across virtually all multifamily asset classes report similar positive business fundamentals headed into 2021. At Philadelphia-based student housing company Campus Apartments, executive vice president and chief operating officer Miles Orth say occupancies and performance have remained relatively strong across a portfolio of assets serving 50-plus universities and colleges in 18 states.

“That’s not to say that there was not significant disruption,” Orth says. “Operators had to pivot quickly and address new issues and concerns while remaining laser-focused on supporting their teams. But now that we’re nine months into the pandemic, student housing occupancies and collection rates are among the highest in the real estate industry and are clearly demonstrating that this sector is strong, stable, and vibrant.”

Crescent Communities’ NOVEL Montford Park in Charlotte, North Carolina, features midcentury-inspired design.

Courtesy Crescent Communities Crescent Communities’ NOVEL Montford Park in Charlotte, North Carolina, features midcentury-inspired design.

Follow the Money

Indeed, strong multifamily asset performance during the pandemic while other real estate classes have foundered is boosting already high rates of global investment into the apartment sector, catalyzing development and possibly sparking consolidation via the acquisition and disposition of portfolios in 2021.

NOVEL Montford Park has a wealth of amenities, from a resort-style saltwater pool to a bark and brew dog park.

Courtesy Crescent Communities NOVEL Montford Park has a wealth of amenities, from a resort-style saltwater pool to a bark and brew dog park.

“There is so much capital out there that is ready to invest into multifamily, and a big reason for that is that until the pandemic is resolved, hotel is uninvestable, office is not for the faint of heart, and retail is dead,” Outcalt says. “So there is a lot of dry powder out there looking for apartment deals because most of the other international options for these investors are really risky.”

Equity already allocated to multifamily investments but forced to the sidelines in the second quarter of 2020 also has rushed back into the market, and lending commitments to the apartment sector made by Fannie Mae and Freddie Mac have admirably filled the momentary void from banks, life companies, and CMBS lenders who are now reentering the market. In November, the Federal Housing Finance Agency announced a combined $140 billion commitment to multifamily for 2021, with 50% of that allocation committed to affordable housing.

“Given the pause in activity, the agencies would have to have had just a rocking and rolling fourth quarter to meet the [2020 allocation of $200 billion],” explains PGIM Real Estate head of agency lending Mike McRoberts. “But the amount of capital still chasing the preferred equity and mezzanine parts of deals is still there, and sellers are seeing close to pre-pandemic pricing, which encourages a lot of cross pools that can tie assets together and go to the agencies to structure a credit facility. We did over $1 billion of that in 2020.”

As operators across a majority of markets report only slightly depressed—if not steady—rent fundamentals, buyer appetite in 2021, absent a force majeure event, will remain robust.

“There is a significant amount of pent-up demand for quality multifamily product in quality locations because of the slowdown from the pandemic. A lot of equity players have to get that capital into play or return it,” explains Kevin Keane, executive vice president, and chief operating officer for the Wellington, Florida-based Bainbridge Cos. “We are certainly looking at 2021 as a portfolio buyer because we have those funds in play with investors who want to make those kinds of purchases.”

The NRP Group’s EDGE 1909 is located in Pittsburgh’s eclectic Strip District.

Courtesy The NRP Group The NRP Group’s EDGE 1909 is located in Pittsburgh’s eclectic Strip District.

Limited Exposure

With asset valuations driven by net operating incomes that are heavily weighted toward rent rolls, it’s remarkable that multifamily pricing has remained steady in the face of epic U.S. unemployment and a national eviction moratorium. While rents have remained fairly flat, operators are yet uncertain whether they’ll face exposure to delinquencies across 2021. Anecdotally, the so-called urban exit of renters who no longer need to be close to core office employers and desire lower population density due to the pandemic seems to be bolstering rather than dragging down apartment fundamentals.

“We had some properties that went into lease-up in spring where leasing velocity was down in the 20s versus 30 to 40 units per month, but we did not have to discount rents,” says Keane. “But we are conservative with our underwriting and in some cases even beat our expectations. We think we are benefiting by migration to the suburbs because we are already here. A lot of competitors are still looking for sites, and we have a healthy pipeline of seven developments slated to close in 2021.”

Healthy development pipelines are keeping builders busy, too, and veteran general contractors say the action is hottest in the suburbs, where the pandemic has accelerated millennial household formation and renters escape the dense urban environments that could increase the risk of exposure to the pandemic. “All of these factors are shifting demand for multifamily housing to the suburbs,” says Richard Lara, president, and CEO of RAAM Construction. “It’s bringing us more business, and we expect to see huge upswings in demand for affordable communities in suburban markets in the next few years.”

Outbound urban population migration could also offer insurance to student housing operators should universities and colleges struggle with lingering pandemic issues. In particular, off-campus, purpose-built student housing in smaller college towns or suburban submarkets could be repurposed to meet market-rate demand.

“We have some properties where we were able to pivot to market-rate given their location and proximity to desirable locations in addition to the university they serve,” Orth says. “Five of our properties benefited from that pivot and were able to stabilize occupancy by reaching out to market-rate renters, but that won’t work in every instance, which is why we’ve accelerated our leasing program for 2021 to encourage early decisions by students in their housing selection for the fall.”

As president of Walker & Dunlop Investment Partners, Sam Isaacson oversees a $1.2 billion commercial real estate portfolio and one of the largest multifamily lending and brokerage shops in the country. While Isaacson agrees that softness in the multifamily market has thus far been limited to the urban core, Class A assets, and could perhaps trigger a larger market shift toward suburban development, he’s unsure if multifamily assets as a whole have yet to prove themselves so bulletproof against the pandemic and its socioeconomic aftershocks.

“Multifamily will not be insulated from millions of people being unemployed and having to change careers,” Isaacson says. “We are taking a risk-off position and taking preferred equity instead of joint-venture last dollar exposure, and are avoiding going 100% on the stack given what is going on. If we are taking last dollar risk, it will be on ground-up construction because the risk-adjusted return is better, and we expect a shift there to more suburban product and even single-family build-for-rent given the migration patterns.”

Campus Apartments’ TENN is a 603-bed mixed-use property steps from the University of Tennessee campus.

Courtesy Campus Apartments Campus Apartments’ TENN is a 603-bed mixed-use property steps from the University of Tennessee campus.

The Long Haul

That’s not to say that luxury urban core is dead as an asset class. On the contrary, veteran multifamily investors and owners feel that market challenges in 2021 and beyond will help winnow an overcrowded playing field of yield chasers and me-too operators and managers, with firms that can adapt without being reactive championing over their peers.

“It’s still too early to predict if there are going to be defaults beyond San Francisco, New York City, and Chicago luxury, and whether or not there has been a true flight to the suburbs,” says LaBonte. “Yes, urban is depressed right now, but time and again those markets have proved to be resilient, and you will see capital come back to core investments. By 2023 and 2024, you will have some suppressed pipeline coming into most of the market, and as long as you are not going in with a merchant build model and build in an eight- to nine-year hold, there will be great opportunities there.”

Like Lara, Outcalt sees increased opportunity in affordable housing across NRP’s markets, particularly given the perfect storm of migration, millennial household creation, and agency allocations to projects meeting affordability thresholds. Playing into the firm’s diversified model (roughly 60% of the portfolio is affordable), NRP is also having success offering third-party construction services to developers anxious to get communities out of the ground.

“In both property management and construction there has been a real flight to quality, and we have 10 deals in our 2021 pipeline that we’ll be building for third parties,” Outcalt says, adding that NRP isn’t hesitant to take on projects in submarkets where it operates its own assets. “Those are the markets where our sub base is the strongest, and one way or another someone is going to build it, so why not us?”

Politics and the economy, too, will continue to shape multifamily real estate across 2021 and beyond. While drastic changes are not expected to agency caps and allocations, leadership at the FHFA is likely to see an overhaul with the rest of the executive branch, and housing policy, in general, is likely to become more stringent and shift further toward affordability.

“Obviously it’s not just getting at the virus with a viable vaccine and treatment. There is a relief rally in the stock market that can provide higher confidence in your top-line underwriting,” McRoberts says. “Then what is the direction of the recovery, and how quickly can we employ people? The speed of that recovery, the speed of changes to the tax plan, the rent control, and eviction moratorium will all have to settle out.”

Navigating portfolios through those challenges might not be such a bad thing, Isaacson says. “Over the last 10 years, anyone could do well in multi-family, and we expect that 2021 will see a separation of the good from the not so good. A bifurcation in performance is coming that will present new buying and business growth opportunities for top performers.”


Multifamily Investment Sales Broker at Marcus & Millichap
P: 630.570.2246
Randolph Taylor

Has the Apartment Real Estate Market Changed Forever?

The Health Crisis has structurally changed life in America and many facets of the multifamily investment market. But will the changes continue once a medical solution stems from the life-or-death risks of the pandemic? Will things return to normal or has the definition of normal been rewritten?

  • Metros that have gained and lost because of the pandemic
  • Why suburban apartments have outperformed and what that means for investors
  • The role public policies like stimulus and eviction moratoriums will play
  • How apartment pricing, distress, and the transaction market will evolve

General Information

  • Wednesday, December 9, 2020
  • 1:00 p.m. Pacific/4:00 p.m. Eastern
  • 60-Minute Live Video Webcast 
  • REGISTER NOW

 

Hosted by

  • John S. Sebree, Senior Vice President, Multifamily Division

 

Featuring  

  • Diane Batayeh, Chief Executive Officer, Village Green
  • Bob Nicolls, Chief Executive Officer, Monarch
  • John Chang, Senior Vice President, Research Services

 

Multifamily Investment Sales Broker at Marcus & Millichap
P: 630.570.2246
Randolph Taylor

2149-2151 W 119th St Blue Island, IL 

 SOLD!

Investment Highlights

  • Fully Occupied Ten Unit Multifamily Offering
  • Value-Add Investment Opportunity, Below Market Rents
  • Month-to-Month Lease Offering Flexibility to Renew, Re-let, Renovate
  • Off-Street Parking, Storage and Laundry Facility

Map Overview

 

Investment Overview

Marcus and Millichap is pleased to present to market this fully occupied 10-unit value-add multifamily offering in Blue Island, Illinois, a southern suburb of Chicago. The property consists of two adjacent 5-unit brick apartment buildings each containing four one-bedroom units and one two-bedroom unit. Amenities include off-street parking, storage units, and on-site laundry in each building.

Each unit has written month-to-month leases offering the flexibility to retain these tenants, renew or renovate and release at higher market rents as each unit is approximately $150 below current market rent for the area.

The property is located approximately 16 miles south of Chicago’s Loop two blocks from the 119th St Metra Station, 119th Street & Vincennes Bus Stop, and two-minutes from Interstate 57.

Multifamily Investment Sales Broker at Marcus & Millichap
P: 630.570.2246
Randolph Taylor

 

 

301 S Ottawa St Joliet, IL 60436

Listing Price: $450,000

Cap Rate 9.25%
Number of Units 6
GRM 7.51
Occupancy 100%
Price/Unit $75000
Price/Gross SF $102.27
Gross SF 4400

Download Offering Memo

Investment Highlights

  • Fully-Occupied, Five-Unit Multifamily Property and Commercial Unit (Salon)
  • New Roof, Electrical Service, Gas Service, Furnace, and Hot Water Tank
  • Renovated Units, Exterior Paint, and Off-Street Parking Lot Replacement
  • Low Property Taxes and Tenant Paid Gas Heat
  • Located in Joliet, the Fourth-Largest City in Illinois
  • Unit Mix of Studio, One-Bedrooms, Two-Bedroom, Three-Bedroom and a Commercial Unit

Map Overview

Investment Overview

Marcus & Millichap is proud to present to market two adjacent, fully-occupied buildings on one parcel, consisting of five multifamily units plus a commercial unit (salon). Each tenant pays separately metered gas heat; combined with low taxes and current market rents provides a healthy return for a smaller investment property.​ A number of very recent capital improvements have been completed including, but not limited to new roofs, upgraded electrical service, gas service, one of two new furnaces and hot water tanks, exterior painting, and off-street parking lot replacement.​ The unit mix consists of one studio, two one-bedrooms, one two-bedroom, one three-bedroom, and one small recently renovated commercial space occupied by a salon.​ Each unit has been partial to fully renovated, is on an annual written lease agreement, and current on their rents as of the drafting of this offering memorandum.​ The property is situated in Joliet, Illinois, approximately 30 miles southwest of Chicago.​ The property is just south of central downtown Jolie t with convenient access to public transportation, local shopping, and public services.​ Jolie t is the county seat of Will County and is the fourth-largest city in Illinois.​ The largest employers in the area include Amazon, AMITA Health Saint Joseph Medical Center, and Will County.​

 

Multifamily Investment Sales Broker at Marcus & Millichap
P: 630.570.2246
Randolph Taylor

1642 Country Lakes Dr. Naperville, IL 60563

Listing Price: $899,000

Number of Units 4
Occupancy 100%
Cap Rate 6%
NOI $54448

Investment Highlights

  • Fully Occupied 4 Unit Building 
  • Desirable Naperville Address
  • Investor or Owner-Occupied Opportunity
  • All Separately Metered Tenant Paid Utilities
  • In-Unit Washers & Dryers
  • Attached One- Car Garages
  • Development Potential 

Map Overview

Investment Overview

A rare find fully occupied 4-unit apartment building for sale in desirable Naperville, IL recently rated one of the best and safest cities to raise children. This property is ideal for the multifamily investor seeking an affluent stable market like Naperville with upside in rents upgrading units, a developer with the area to potentially build another 4-unit building or an investor homeowner that would like to live in one unit for low housing costs collecting rents. Conveniently located on the Northside of Naperville seconds from I-88 E-W Tollway, minutes from the Route 59 Metra train station, and the Fox Valley Shopping District. Each two-bedroom one and a half bath unit has all separately metered tenant-paid gas, electric, water, sewer, and trash utilities. Amenities for each unit include dishwashers, in-unit-owned washer and dryers, central air, and a one-car garage. Three of four units have full basements two of which are finished. Recent improvements include new windows, furnaces, hot water tanks, and all but one air conditioning unit replaced in the past 3-4 years.

 

 

Listing Broker: Shamshad Sanaullah HomeSmart Realty Group 651 N Washington st, Naperville, IL 60563 630-940-7011 (cell) Email:[email protected]

Multifamily Investment Sales Broker at Marcus & Millichap
P: 630.570.2246
Randolph Taylor

call for offers Due: Wednesday 10/7/2020

 

 

 

Victorian Apartments

800-834 Victoria Dr. Montgomery, IL 60538

Listing Price: $14,500,000

Cap Rate 6.38%
Number of Units 152
GRM 8.30
Occupancy 96%
Price/Unit $95395
Price/Gross SF $135.14
Gross SF 107200

View Listing Documents

Investment Highlights

  • 152 Unit Suburban Multifamily Property
  • 32 Studios, 72 One-Bedrooms & 48 Two-Bedrooms
  • Clubhouse with Office, Laundry Facilities, Fitness Area, Outdoor Pool, and Courtyard
  • Located in Montgomery Illinois | 40 Miles Southwest of Downtown Chicago
  • Many Upgraded Kitchens and Baths
  • Tenant Paid Electric Baseboard Heat
  • Value-add component, upside in rents

Map Overview

Investment Overview

Marcus & Millichap is proud to present to market Victorian Apartments, a 152-unit apartment community located in west suburban Montgomery, Illinois bordering Kendall County to the South, the fastest growing county in Illinois, and the City of Aurora, IL to the East, the second-largest city in Illinois. The subject property is approximately 40 miles southwest of downtown Chicago.

Victorian Apartments consists of 16 two and three-story apartment buildings and clubhouse spread out over almost 10 acres; offering 32 large studios, 72 one-bedrooms, and 48 two-bedroom apartment homes.​​​ Community amenities include a clubhouse, an on-site management office, laundry facilities, a fitness area, an outdoor pool, a central courtyard area with a playground, and ample off-street parking.​​​

Each unit has separately metered, tenant paid, low maintenance, electric baseboard heating, and ac sleeve units.​​​ Approximately 60 percent of units have recently updated kitchens & baths as well as other capital improvement made including new windows, parking lot repairs, replacement of all deck footings & supports an updated intercom system with integrated Alexa. Roofs are in good condition approximately 10-12 years old.

There is investor upside in this multifamily offering through the continued renewal and releasing of under-market rents. Further upside may also be realized in future years from job growth and economic development in the area through the redevelopment of the recently sold 350-acre former Caterpillar manufacturing complex minutes from the property.

 

Apartment Demand Surges to Strongest Third Quarter on Record
Multifamily Investment Sales Broker at Marcus & Millichap
P: 630.570.2246
Randolph Taylor

Tenants are moving to the suburbs in droves, according to CoStar’s latest apartment report, and downtown landlords are cutting rents.

CoStar tracked several novel trends in the multifamily sector during the past quarter, including an extended leasing season and a lot of pent-up demand for cheaper, larger suburban apartments during the pandemic and economic shutdown.

“Let’s start with some good news: Apartment demand came roaring back in the third quarter, topping 100,000 units. That’s easily the best third-quarter demand on record,” John Affleck, CoStar’s vice president of market analytics, said in a new video. The wave of leasing “confirms that many renters postponed moving into a new apartment until after lockdown measures imposed in the spring had lifted,” he said.

That sounds good. But the third quarter also saw some huge numbers of new apartments coming to market. And mostly, they opened in areas considered to be falling out of favor with renters: expensive, downtown neighborhoods that used to boast proximity to offices and now-restricted hangouts such as restaurants and bars.

“Downtown landlords are doing their best, though. Overall, they’ve slashed rents for downtown product by more than 6% from the March peak — even as rents for suburban product are trending above pre-COVID levels,” said Affleck. “And the rate of decline in downtown rents has yet to slow. Rents have fallen at a rate of about 1% per month since June.”

Renters have been voting with their feet, moving outside city centers.

“That third-quarter demand was powered by near-record absorption of suburban units, which offer cooped-up city dwellers more space at lower cost — and at least the perception of safety,” said Affleck.

The discounts on downtown rents appear to be having an effect. He noted, in the third quarter, downtowns saw more people moving in than moving out of apartments — the opposite of the second quarter. But those areas still have a vacancy rate that’s higher the historical average.

One indicator, search activity for rentals on Apartments.com, part of CoStar Group, the parent of CoStar News, increased in the suburbs and areas farther out in places such as Stamford, Connecticut; California’s Inland Empire; and Baltimore.

“Still, search activity is still running at above pre-COVID levels in every major market, and we’ve seen that activity turn into strong demand last quarter,” he said. “Could the fourth quarter also bring a record number of new leases in a leasing season that never ends?”

 

Source: By John Doherty CoStar News October 6, 2020 | 11:19 AM


call for offers Due: Wednesday 10/7/2020 @ 5 PM

 

 

Victorian Apartments

800-834 Victoria Dr. Montgomery, IL 60538

Listing Price: $14,500,000

Cap Rate 6.38%
Number of Units 152
GRM 8.30
Occupancy 96%
Price/Unit $95395
Price/Gross SF $135.14
Gross SF 107200

View Listing Documents

Investment Highlights

  • 152 Unit Suburban Multifamily Property
  • 32 Studios, 72 One-Bedrooms & 48 Two-Bedrooms
  • Clubhouse with Office, Laundry Facilities, Fitness Area, Outdoor Pool, and Courtyard
  • Located in Montgomery Illinois | 40 Miles Southwest of Downtown Chicago
  • Many Upgraded Kitchens and Baths
  • Tenant Paid Electric Baseboard Heat
  • Value-add component, upside in rents

Map Overview

Investment Overview

Marcus & Millichap is proud to present to market Victorian Apartments, a 152-unit apartment community located in west suburban Montgomery, Illinois bordering Kendall County to the South, the fastest growing county in Illinois, and the City of Aurora, IL to the East, the second-largest city in Illinois. The subject property is approximately 40 miles southwest of downtown Chicago.

Victorian Apartments consists of 16 two and three-story apartment buildings and clubhouse spread out over almost 10 acres; offering 32 large studios, 72 one-bedrooms, and 48 two-bedroom apartment homes.​​​ Community amenities include a clubhouse, an on-site management office, laundry facilities, a fitness area, an outdoor pool, a central courtyard area with a playground, and ample off-street parking.​​​

Each unit has separately metered, tenant paid, low maintenance, electric baseboard heating, and ac sleeve units.​​​ Approximately 60 percent of units have recently updated kitchens & baths as well as other capital improvement made including new windows, parking lot repairs, replacement of all deck footings & supports and updated intercom system with integrated Alexa. Roofs are in good condition approximately 10-12 years old.

There is investor upside in this multifamily offering through the continued renewal and releasing of under-market rents. Further upside may also be realized in future years from job growth and economic development in the area through the redevelopment of the recently sold 350-acre former Caterpillar manufacturing complex minutes from the property.

 

Suburbs Outperform Cities as Renters Relocate: Report
Multifamily Investment Sales Broker at Marcus & Millichap
P: 630.570.2246
Randolph Taylor

A pair of recent reports, one from  CoStar and another from  Real Capital Analytics  (RCA), show that multifamily property continues to see price increases despite the pandemic.

Defining the indices

The CoStar report focuses on a relative measure of property values called the CoStar Commercial Repeat Sales Index (CCRSI). Real Capital Analytics calls their equivalent measure the Commercial Property Price Index (CPPI). Both indices are computed based on the resale of properties whose earlier sales prices and sales dates are known. The indices represent the relative change in the price of property over time rather than its absolute worth.

Comparing multifamily to the rest

The first chart combines data from both reports to show how multifamily property values have changed over time relative to the values of other commercial property types. The data are normalized so that the index values for all property types are set to be 100 in December 2000. The change in the value of the index since then shows how the relative value of that property type has changed since.

multifamily property prices

Source: CoStar and Real Capital Analytics

The chart shows that the value of commercial property, excluding multifamily, has failed to grow recently. This is due to relative strength in industrial and, to a lesser extent, office properties being offset by weakness in retail and hospitality properties. It also shows that prices continue to rise for multifamily property, although the rate of increase may be down slightly from its recent level.

Being specific

Both the value-weighted CoStar index and the RCA index for multifamily property values have performed relatively well despite the pandemic. RCA reports that apartment property prices are up 1.2 percent over the last 3 months and up 7.4 percent for the last 12 months. CoStar reports that its value-weighted index is up 1.4 percent in the last 3 months and up 7.0 percent over the last 12 months. This compares to a 2.3 percent fall in the CoStar CCRSI for commercial property types, excluding multifamily, from its year-ago level.

CoStar also reported that transaction volume has dropped significantly this year. The transaction volume in the last 3 months is down by 39 percent from that in the same three months of last year. It is also noteworthy that “distressed” transaction volume has not risen. Distressed transactions represented about 1.2 percent of total transactions over the past 3 months, the same percentage as they were in the year-earlier period.

 

Source: YieldPro ByMichael Rudy -September 28, 2020


Call for offers Due: Wednesday 10/7/2020 @ 5 PM

 

 

Victorian Apartments

800-834 Victoria Dr. Montgomery, IL 60538

Listing Price: $14,500,000

Cap Rate 6.38%
Number of Units 152
GRM 8.30
Occupancy 96%
Price/Unit $95395
Price/Gross SF $135.14
Gross SF 107200

View Listing Documents

Investment Highlights

  • 152 Unit Suburban Multifamily Property
  • 32 Studios, 72 One-Bedrooms & 48 Two-Bedrooms
  • Clubhouse with Office, Laundry Facilities, Fitness Area, Outdoor Pool, and Courtyard
  • Located in Montgomery Illinois | 40 Miles Southwest of Downtown Chicago
  • Many Upgraded Kitchens and Baths
  • Tenant Paid Electric Baseboard Heat
  • Value-add component, upside in rents

Map Overview

Investment Overview

Marcus & Millichap is proud to present to market Victorian Apartments, a 152-unit apartment community located in west suburban Montgomery, Illinois bordering Kendall County to the South, the fastest growing county in Illinois, and the City of Aurora, IL to the East, the second-largest city in Illinois. The subject property is approximately 40 miles southwest of downtown Chicago.

Victorian Apartments consists of 16 two and three-story apartment buildings and clubhouse spread out over almost 10 acres; offering 32 large studios, 72 one-bedrooms, and 48 two-bedroom apartment homes.​​​ Community amenities include a clubhouse, an on-site management office, laundry facilities, a fitness area, an outdoor pool, a central courtyard area with a playground, and ample off-street parking.​​​

Each unit has separately metered, tenant paid, low maintenance, electric baseboard heating, and ac sleeve units.​​​ Approximately 60 percent of units have recently updated kitchens & baths as well as other capital improvement made including new windows, parking lot repairs, replacement of all deck footings & supports and updated intercom system with integrated Alexa. 

There is investor upside in this multifamily offering through the continued renewal and releasing of under-market rents. Further upside may also be realized in future years from job growth and economic development in the area through the redevelopment of the recently sold 350-acre former Caterpillar manufacturing complex minutes from the property.