AURORA, IL, October 10, 2019 – Marcus & Millichap (NYSE: MMI) , a leading commercial real estate investment services firm with offices throughout the United States and Canada, has announced the sale of a 12-unit apartment property located in Aurora, Ill, according to Steven D. Weinstock, regional manager and first vice president of the firm’s Chicago Oak Brook office. The asset sold for $785,000.
Randolph Taylor, an investment specialist in Marcus & Millichap’s Chicago Oak Brook office, had the exclusive listing to market the property on behalf of the seller, an individual/personal trust. The buyer, an individual/personal trust, was also secured and represented by Randolph Taylor.
The property is located at 557-559 Ashland Ave in Aurora, Ill and is a twelve-unit multifamily property consisting of all two-bedroom two-bath units on the Southside of Aurora bordering Montgomery, Ill. The property was fully occupied at the time of the sale. This is an example of the effectiveness of the Marcus & Millichap platform moving capital across the country, as an outstate Seattle, WA buyer was able to realize greater returns in the Midwest, specifically in the suburban Chicago market, versus their local market. Continue reading “MARCUS & MILLICHAP ARRANGES THE SALE OF AN AURORA, ILL APARTMENT BUILDING”→
A New York real estate investor paid $94 million for an apartment complex in north suburban Vernon Hills, another addition to the long list of suburban Chicago multifamily properties that have changed hands this year.
A venture of Azure Partners acquired the Oaks of Vernon Hills, a 336-unit property on U.S. Highway 45, from the joint venture that recently developed it, according to Lake County property records. The deal underscores the hunger investors have had for apartments in the Chicago suburbs in 2017, almost certainly the strongest year ever for suburban multifamily deals.
It’s the first apartment acquisition in the Chicago area for Azure, which owns 15 multifamily and retail properties mainly along the East Coast, according to Real Capital Analytics, a New York-based research firm. Azure bought the property in a joint venture with Harbor Group International, a Norfolk, Va.-based real estate firm.
Azure and Harbor Group paid $94 million, or about $280,000 a unit, for the Oaks, buying it from a venture formed by Chicago-based Reva Development, Hamilton Partners of Itasca and Deutsche Asset & Wealth Management, a unit of Deutsche Bank, according to a deed.
The developers built the complex in two steps, finishing the 304-unit first phase in fall 2015 and the second, encompassing 32 units, in spring 2016, according to the Reva website. Reva and Azure representatives did not return calls.
Suburban apartment values have jumped in recent years amid expectations that occupancies will remain high and rents will keep rising. And high prices have allowed many developers to sell their projects at a hefty profit. In August, the developers of the Reserve Glenview sold the 239-unit property for nearly $81 million, well above what it cost to build.
It’s unclear how much the Oaks cost to develop; the 30-acre property at 770 E. U.S. Highway 45 was encumbered by a $44.3 million construction loan, according to county records.
Peter Evans, managing partner of the Chicago office of brokerage Moran, arranged the sale for Reva and its partners.
It has been a busy year for apartment brokers. With a flurry of year-end deals, total suburban apartment sales in 2017 are expected to eclipse the record $1.66 billion set last year.
Average effective rents at the Oaks range from $1,505 per month for one-bedroom units to $3,200 for a three-bedroom, according to CoStar Group, a real estate data provider. The average apartment rents for $1.89 per square foot, roughly the same as a year ago. The property is 94.3 percent occupied, up from 88.1 percent a year ago, according to CoStar.
Chicago apartment landlord Stuart Handler is continuing his push into the suburbs, dropping $53 million on a housing complex in west suburban Bloomingdale.
A venture led by Handler acquired Stratford Place, a 342-unit property near Stratford Square Mall, said Handler, CEO of TLC Management. The seller was a venture of San Francisco-based Friedkin Realty Group, which paid $52.5 million for it in December 2012.
It’s Handler’s fifth big suburban apartment deal since the end of 2014, when he began to expand beyond his base in Chicago and Evanston. Using a slow and steady approach and targeting the mid-market, he has amassed a portfolio of about 4,500 units, including more than 1,500 outside the city and Evanston.
Handler, who doesn’t bring in outside investors on his deals, aims to buy one more property in the Chicago area by the end of the year.
He has nothing fancy in mind for Stratford Place, a property that he classifies as B-plus. The 27-acre complex at 232 Butterfield Road, which has an occupancy rate in the mid-90 percent range, was completed in 1991. He expects to spend $1 million or so sprucing it up but doesn’t see a need to do much more.
“It’s a strong asset now,” he said. “We’re just going to move it up to another level.”
Suburban apartment landlords have been operating at a high level for the past several years, a period of rising rents, occupancies and property values. The median net suburban apartment rent per square foot rose 3.7 percent last year, according to Chicago-based consulting firm Appraisal Research Counselors. Rents were up 22 percent over five years.
Handler remains optimistic about the market, but with interest rates rising again, he doesn’t expect property values to rise much more.
“It’s not as hot as it has been, but it’s still good,” Handler said.
Friedkin Realty, meanwhile, still likes the Chicago market and has been scouting the suburbs and downtown for more properties to buy, said Morton Friedkin, founder and chairman of the company. Friedkin Realty owns eight properties totaling more than 2,100 apartments in the Chicago suburbs. In its most recent acquisition, the firm paid $42 million for a 144-unit building in Des Plaines.
Though other suburban multifamily properties have sold for big gains the past few years, Stratford Place bucked that trend, with Handler paying roughly what Friedkin bought it for more than four years ago.
“We overpaid, and he underpaid,” quipped Friedkin.
He expects Stratford Place to fare well under Handler, who can give it more attention than he could from 1,800 miles away.
“Stuart’s local to the area,” Friedkin said. “He’s there to stay, and he’s an operator.”
Source: Crains Chicago Business May 15th 2017 Alby Gallun
Investor Pays 60 million for Naperville Arbors of Brookdale Apartments
A local landlord sold a Naperville apartment complex for $60 million, nearly twice what it paid for the property when the real estate market was in the dumps.
Prime Property Investors sold the Arbors of Brookdale, a 281-unit property on the suburb’s northwest side, to Friedkin Realty Group, a San Francisco-based investor that has been a busy buyer and seller of apartments in suburban Chicago, according to DuPage County property records.
The deal is the latest of many showing how investors that bought during the bust have been handsomely rewarded for taking the risk. Prime paid $32 million for the Arbors in December 2009, as the market was bottoming out, and cashed out earlier this month for $59.7 million, or $212,000 a unit, county records show.
Prime rode the market higher, but it also spent $2.1 million on new roofs, mechanical systems and other improvements, said Michael Zaransky, the company’s co-founder and co-CEO. In addition, the firm also renovated about 40 apartments in the past couple years, allowing it to raise rents on some units by as much as $200 a month, he said.
The property’s appreciation “wasn’t just a market timing thing,” he said.
The property’s rental revenue rose 140 percent over the nearly seven years Prime owned it, Zaransky said. Friedkin Realty plans to continue the apartment renovation plan, said Morton Friedkin, the firm’s founder and chairman, a move that could further boost the property’s revenue.
“There’s additional income to be realized,” he said. “I think the property has lasting value. It’s got great architecture and great location.”
How much further Friedkin Realty will be able to raise rents will depend on the market, which has been on a roll for the past several years. The median suburban rent per square foot has risen nearly 32 percent—about 4 percent annually—since Northbrook-based Prime bought the Arbors in 2009, according to a report from Appraisal Research Counselors, a Chicago-based consulting firm.
Wagering that rents will keep rising, investors continue to bid up prices of apartment buildings, tempting many landlords to cash out. By mid-year, major suburban Chicago apartment sales totaled $750 million and, taking into account what’s currently on the market, they could top the full-year record of $1.2 billion set in 2007, according to Appraisal Research.
The Arbors is considered a mid-tier, or Class B, multifamily property, with monthly rents ranging from $1,225 for a one-bedroom unit to $2,100 for a three-bedroom, the report shows. The property at 1373 Ivy Lane was 100 percent occupied at the time of the sale, Zaransky said.
With the Naperville sale, Prime no longer owns any apartment buildings in suburban Chicago, leaving it with properties in Texas and Denver. Yet that doesn’t mean it’s leaving the Chicago market, Zaransky said.
“We’re still active in looking and would love to own other assets here,” he said. “I still think the suburban Chicago apartment market is strong and vibrant.”
Friedkin Realty, meanwhile, owns more than 2,700 apartments in the Chicago suburbs and is looking for more. It is in the final stages of buying another suburban apartment complex, Friedkin said, declining to provide more details because of a confidentiality agreement.
Source: Chicago Real Estate Daily, Crains Chicago Business August 31st, 2016 By Alby Gallun
A California real estate investment firm bought a Naperville office complex for $18 million, 29 percent less than the property’s pre-recession price in 2007.
Irvine, Calif.-based Sperry Equities bought Washington Commons, an approximately 200,000-square-foot office complex on Diehl Road, according to DuPage County records.
The deal comes nine years after the complex sold for $25.2 million, before the recession hammered suburban values. In many cases values have never fully recovered.
Although the property’s value remains below pre-crash levels, Sperry believes it can cash in on the lowest suburban office vacancy in 14 years, allowing it to charge higher rents than those in deals signed in the past few years.
Suburban vacancy was 18.5 percent to end 2015 and 18.6 percent in the western part of the east-west corridor, according to Chicago-based Jones Lang LaSalle.
“They bought it in 2007 at the peak,” said Burton Young, a Sperry Equities principal. “Rents haven’t recovered to where they were in 2007, but we believe we can capitalize on market timing. There are some rents there that are low relative to the market, and there’s room to increase the occupancy. We think it’s a market-timing play.”
The seller was a Denver-based venture of real estate investment firm EverWest Real Estate Partners and real estate investment trust Dividend Capital Diversified Property Fund.
EverWest was known as Alliance Commercial Partners at the time of the deal. Alliance lost a few other suburban buildings to foreclosure during the downturn.
The Alliance venture that bought Washington Commons faced a potential loan default on the complex in 2011 because of rising vacancy, according to a Bloomberg loan report. But the owners later that year negotiated a maturity extension of four years, to February 2016, on the $21.3 million securitized loan, according to Bloomberg.
The Alliance venture also made a $4 million equity contribution and split the loans into A and B notes as part of the 2011 modification, according to the loan report.
EverWest, which changed its name in 2014, and Dividend Capital representatives did not return calls requesting comment.
Washington Commons, at 450-500, 550-700 and 750-900 E. Diehl Road, consists of 10 single-story buildings connected by foyers and hallways, on 21 acres, Young said. The complex was 77 percent leased when Sperry Equities struck the deal to buy it, and several small new leases have boosted occupancy to about 85 percent, he said.
The largest tenants are a regional headquarters of Toyota’s Lexus division, with 31,000 square feet, and a 17,000-square-foot Bright Horizons daycare, Young said.
Sperry Equities, once affiliated with brokerage Sperry Van Ness but now independently owned, plans upgrades including building out move-in-ready suites, he said.
“We love Naperville and the surrounding area,” Young said. “It’s a good long-term hold right off the I-88 tollway and Diehl Road.”
Sperry Equities owns about 6 million square feet of commercial real estate, including office and industrial space in Bolingbrook, Hoffman Estates and Tinley Park, Young said.
Source: Chicago Real Estate Daily Ryan Ori April 7th, 2016
Biggest Suburban Chicago Apartment Deal in 18 months An Ohio landlord on the hunt for apartments here has pulled off the biggest multifamily acquisition in the Chicago suburbs since September 2014.
Ventures led by Connor Group, based outside Dayton, paid $105 million, or about $179,000 a unit, last month for Stonebridge of Arlington Heights, a 586-unit complex in northwest suburban Arlington Heights, according to a deed filed with Cook County. It is the third acquisition in 18 months in the Chicago suburbs for Connor, which owns 14,000 apartments in the eastern half of the country.
Connor is expanding its presence in a strong suburban apartment market that shows few signs of weakening in 2016 amid steady job growth and a continued preference for renting over owning among many suburbanites. The median net suburban rent rose nearly 4 percent last year, with similar increased expected in 2016, according to Chicago-based consulting firm Appraisal Research Counselors.
Rents have been rising since 2009, about when Connor started shopping for apartments here. The firm made its first acquisition in September 2014, when it paid $61.8 million for Glenmuir, a 321-unit property in Naperville. About a year later, it completed its second deal, paying $62.1 million for Alara at Summerfield, a 368-unit complex in Aurora now called Aurora at Summerfield.
Chicago is “a big market, there are a lot of renters by choice and the submarkets we’re in are highly desirable,” said Connor Partner Pat Rini.
Connor acquired Stonebridge from its longtime owner, a venture led by local investor Maria Magnus, who did not return calls. Connor financed the acquisition with a $78.7 million loan from Freddie Mac, count records show.
The Stonebridge deal is the biggest sale of a suburban Chicago apartment complex since September 2014, when Woodland Creek, a 640-unit property in Wheeling, sold for $118.5 million.
Rini said a confidentiality agreement prevented him from discussing the transaction but not the Chicago apartment market or Connor’s plans for the Arlington Heights property.
Stonebridge, at 600 W. Rand Road, is a so-called value-add acquisition for Connor, which plans to spend $6 million on a major interior and exterior renovation, Rini said. The firm is revamping the apartments with new countertops, appliances, flooring and other improvements, he said. The project will allow Connor to charge higher rents and ultimately boost the value of the property.
Built in 1975 and last renovated in 2011, Stonebridge is considered a Class C property, with rents ranging from $1,250 a month for a one-bedroom apartment to $1,480 for a two-bedroom, according to an Appraisal Research report. Rents have held roughly steady over the past year or so, at $1.34 per square foot, the report says.
Connor is being patient in its search for apartments here, but it ultimately could end up with another half-dozen properties here, possibly even some downtown, Rini said. To achieve scale, the firm aims to own six to 10 properties in each of its markets, enough to cover the cost of a local office and other operations.
“We’ll get there,” he said. “I don’t know if it will be sooner or later, but we’ll figure it out.”
Source: Chicago Real Estate Daily, Alby Gallun April 6, 2016
An apartment investor from Rochester, N.Y., acquired a 428-unit apartment complex in northwest suburban Schaumburg, one of a flurry of suburban apartment deals expected to wrap up by yearend.
Home Properties, a real estate investment trust, bought the Lakes of Schaumburg for $67.1 million, or $156,800 a unit, including the assumption of a $33 million mortgage on the property, according to Cook County property records. The REIT acquired the complex Nov. 12 from a joint venture led by Naperville-based Marquette Cos. that bought it for $47.3 million in 2010.
The Lakes of Schaumburg, 801 Belinder Lane, is one of several suburban multifamily properties changing hands in the waning weeks of 2014, part of an annual push by investors to complete deals by the end of the year. Twenty-seven suburban apartment properties traded for a combined $779.1 million by October, according to a report by Appraisal Research Counselors, a Chicago-based consulting firm.
With several more properties on the market and some under contract, it’s possible that suburban sales for the year could top the $1.17 billion total for 2007, the last sales peak, said Appraisal Research Vice President Ron DeVries.
The fourth quarter should “have huge volume for closings,” he said in an email. “Surpassing the prior peak would not surprise me.”
Suburban apartment sales dipped as low as $471.5 million in 2009 but totaled $1.05 billion last year, according to Appraisal Research. Apartments remain a favored sector among real estate investors amid a broader shift away from home ownership and the rebounding economy, which have combined to push rents in suburban Chicago to new highs.
Home Properties and Marquette executives were not available late yesterday.
Home Properties owns 122 apartment properties with 42,250 units around the country, mainly at the mid to lower end of the market. Before buying the Lakes of Schaumburg, it owned seven properties and 2,566 apartments in the Chicago area with an average rent of $953 per month, according to a third-quarter report. The REIT’s most recent prior deal here was its $20.2 million acquisition in 2011 of the Gates of Deer Grove, a 198-unit property in Palatine.
The Lakes of Schaumburg was 99.1 percent occupied in the third quarter, with quoted rents ranging from $988 to $1,450 a month, according to Appraisal Research. The Chicago office of HFF brokered the sale of the property for Marquette, which also recently sold Bourbon Square, a 612-unit apartment complex in Palatine, for $97 million.
Source: Chicago Real Estate Daily December 3rd, 2014 Alby Gallun