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CHICAGO-”The darling of the investment community is multifamily,” says Appraisal Research Counselors VP John Jaeger. He recently ticked off a string of deals with rock-bottom capitalization rates as well as projects that are showing steady leasing progress during a market overview for the Chicago Real Estate Council.

For example, Archstone-Smith sold the 139-unit building at 2470 N. Clark St. in the Lincoln Park community this year for $19.1 million, at a 6.17% cap rate, Jaeger reports. The REIT outdid itself with the $37 million sale of 33 W. Delaware Pl., selling it at a 5% cap rate in addition to a record $265 psf, he adds. Then there is the $82-million sale of 30 E. Huron St. at a 4.0% cap rate.

Appraisal Research Counselors tracks multifamily rental property sales of $5 million or more, and they are expected to total around $300 million this year, Jaeger says. “I see that continuing,” he adds. “It’s being driven by interest rates.”

Of the 10 deals done so far this year, seven have been to investors and two to condominium converters, while pension funds and REITs have been shut out on the acquisition front, according to Appraisal Research Counselors’ third-quarter report. Likewise, four of the six acquisitions in 2002 were by investors while condo converters grabbed the other two, according to Appraisal Research Counselors.

Another big deal on the horizon is the 412-unit City View Plaza on the near West Side, acquired by RREEF two years ago for $38.5 million but on the market now for $55 million, Jaeger notes.

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