CHICAGO-Stark Burnham Pointe, an affiliate of Milwaukee-based hedge fund manager Stark Investments, has sold the 298-unit Burnham Pointe Apartments to Dallas-based Behringer Harvard. The Southwest-based REIT said it paid $88 million for the building at 730 S. Clark St., which was originally built to be a condominium complex.
Behringer said in an 8-K filing that it funded the purchase with proceeds from an initial public offering. “We may later place mortgage debt on the property,” the company said in the filing.
Locally-based Terrapin Properties developed the building for $100 million, securing an $83.5 million loan and dubbing the condo project as the Residences at Burnham Pointe. However, the condos didn’t sell, and Corus was shut down in 2009. The building was changed to apartments, and Stark later took over the property from Terrapin. Asking rents run from $1,675 per month for 757 square feet to $4,990 per month for 2,239 square feet.
The building is considered high-end, as it was designed as a condo building, with indoor, heated parking. John Jaeger with CBRE Capital Markets tells GlobeSt.com that investors for this type of property are now lining up. “The demand from capital is outstanding right now, it’s a seller’s market,” Jaeger says. “Buyers are able to gain great financing deals for multifamily. This is 180 degrees from where we were six months ago.”
He says part of the boom has been the realization from investors that so called “Echo-Boomers” will be getting out of college soon and wanted a place to live. “This big wave of 21-to-25-year-olds coming into the marketplace are going to drive demand and pricing for owners,” Jaeger says. “I think supply may be even boosted sooner than we thought. Developers will be dusting off plans. It’s going to take some time, and there may not be many $100 million developments, but there are groups such as REITs who can start large projects right now.” Jaeger was joined by Peter Marino, Jesse Karasik, John Clifford, Dan Cohen and Melissa Strauss in representing Stark in the sale.