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Lombard apartments sell for $86 million

Randolph Taylor

Multifamily Investment Sales Broker at Marcus & Millichap
(630) 570-2246
Randolph Taylor
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Lombard apartments sell for $86 million

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

The suburban market is neither too hot nor too cold, with demand strong enough for landlords to push through moderate rent hikes—and for the market to absorb a rising supply of apartments

Randolph Taylor

Multifamily Investment Sales Broker at Marcus & Millichap
(630) 570-2246
Randolph Taylor
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Investor Pays 60 million for Naperville Arbors of Brookdale Apartments

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

Oak Brook office buildings sell for 24 million

Randolph Taylor

Multifamily Investment Sales Broker at Marcus & Millichap
(630) 570-2246
Randolph Taylor
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Oak Brook office buildings sell for $24 million

Oak Brook office buildings sell for 24 million – A Boston real estate investor sold a pair of Oak Brook office buildings for $24 million, not much more than it paid for them more than 11 years ago.

One and Two Oak Brook Place, a 179,000-square-foot complex, was sold to American Landmark Properties last month, according to DuPage County property records. American Landmark, a Skokie-based landlord, was part of the investor group that sold the Willis Tower for $1.3 billion last year to Blackstone Group.

The sale shows how the suburban office market, which crashed after the financial crisis, has rebounded in recent years, as rents and occupancies have risen and investors have returned to the market. TA paid $23.5 million for the buildings at 2301 and 2311 W. 22nd St. in February 2005, a couple years before the real estate market peaked, and likely would have taken a loss if it sold the properties a few years ago.

American Landmark financed the acquisition with a $15.6 million loan from Prime Financial Partners, according to Chicago-based mortgage broker Cohen Financial, which arranged the loan. The property is 94 percent occupied, according to Chicago-based Cohen.

Each three-story building has more than 90,000 square feet, and the complex was 94 percent occupied when the deal closed, Cohen Financial said. Tenants include Advocate Health Care and Taylor Precision Products, a maker of housewares including the Rabbit corkscrew.

Source: Crain’s Chicago Business Katherine Davis June 09, 2016