CHICAGO-A 410-unit Near West Side apartment building has been sold for $38.5 million, as well as what is believed to be a record $93,902 per unit for a class C multifamily property in the submarket. Marcus & Millichap’s Kiser Group here found fielded eight offers in 14 days for the property formerly owned by CMS Inc. of West Chicago, IL, the winner being national pension fund adviser RREEF.
CMS Inc. was involved in a Section 1031 exchange. The Taylor Place Apartments traded at a 6.24% capitalization rate even though RREEF plans significant interior improvements to the 29-year-old property, which was 98% occupied.
“Because Taylor Place is unique in its submarket, we were able to demonstrate to the buyer that with renovation and repositioning, as an investment, it has tremendous upside potential,” says Lee Kiser, senior director of Marcus & Millichap’s national multi-housing group.
Rents range from $763 per month for a studio up to $1,310 a month for a two-bedroom unit in an area near the city’s hospital complex, University of Illinois-Chicago as well as the United Center.
“In the face of the volatility of the national economy, apartments are still sound investments,” adds Kiser, whose group represented buyer and seller. “Chicago remains an attractive market for multifamily investments and the market remains active with buyer interest.”
Meanwhile, a 15-unit building at 2932 W. North Ave., across the street from Humboldt Park, has sold for $790,000 in an unrelated transaction. Marketing of this property took just 20 days before a deal was co-brokered by Ken Goldberg and Alexander Cue of Inland Real Estate Sales, Inc.’s Chicago office. The seller paid $300,000 for the property five years ago, according to property records.
Despite being located more than four miles from Taylor Place, and being much smaller, the Humboldt Park property has a couple of things in common. “This property has great potential for rehab and rent increases because it’s in a rapidly gentrifying location,” Goldberg says. “Humboldt Park is one of Chicago’s up and coming neighborhoods.”