Lowe Buys 612-Unit Bourbon Square

CHICAGO—Lowe Enterprises Investors has just acquired the 612-unit Bourbon Square apartment community in northwest suburban Palatine for an undisclosed amount. The big purchase is another signal that although there is no significant new supply on the horizon, the local area will continue to see upgrades to its existing housing stock. The previous owner had wanted to covert the development into condos, officials from the Los Angeles-based Lowe tell GlobeSt.com. The crash derailed those plans, but their firm has the wherewithal to launch a multi-year rehab of the development and will start work in the next 90 days.

“I've been familiar with this asset for a number of years,” says Andy Sands, the company's senior vice president who leads its investment activities. The previous owner bought it “late in the last cycle; their timing wasn't great.” But buying the development fits well into Lowe's business plan, which focuses a lot of attention on workforce housing built in the 1980s or 1990s and that provides renters with affordable options.

“All of the competing projects around have been upgraded and are institutionally-owned,” Sands adds. Bourbon Square's clubhouse did recently get a makeover, but the apartments “have been relatively untouched for a number of years.” However, “the property has great demographics and so does the community. It's also a great piece of land.”

Located on 41.5 acres at the intersection of Lake Cook Rd. and Hicks Rd. immediately west of Rte. 53, Bourbon Square is a garden-style community that features about 1,100 trees and two lakes. It has one-, two- and three-bedroom units with an average size of over 1,300-square-feet. In addition to the lakefront club house, the development also has an indoor pool, theater room, tennis courts and fitness center.

Lowe plans to bring an “institutional mindset” to Bourbon Square, says Sands. “We're a sophisticated owner with a close to $7 billion portfolio; our investors are generally pension funds and other institutional types,” and the company is ready to commit the funds needed to do more work on the clubhouse, update the common areas and renovate the apartments as they become available through natural attrition. “It's a large project and we're going to do it over several years.”

Moran & Co. represented the seller, a joint venture between affiliates of Marquette Companies and Arcapita. Greystar has assumed management of the property.