Interra Realty, a Chicago-based commercial real estate investment services firm, today announced it brokered the off-market sale of a 19-unit multifamily property at 2035 W. Arthur Ave. in Chicago’s West Rogers Park neighborhood. The property sold for $2.8 million, or nearly $150,000 per unit, a strong price for the Rogers Park submarket, according to CoStar.
Brad Feldman, senior managing partner at Interra Realty, represented both the buyer, a private local investor, and seller, Marc Realty.
“Rogers Park remains attractive to renters and buyers alike because of its relative affordability,” said Feldman. “We’ve seen an uptick in activity in this pocket of West Rogers Park near Devon as people discover the area’s high-quality, plentiful housing stock. Investor appetite is especially strong for assets that are either candidates for redevelopment or, in this case, recently renovated, as they’re able to capitalize on continued rent growth. Given the strong fundamentals, we expect sales velocity to hold steady through the second half of the year.”
Built in 1928, 2035 W. Arthur is a four-story, 20,000-square-foot building with a mix of 16 two-bedroom and three three-bedroom units. Apartments were last renovated in 2012 as part of a gut rehab and feature hardwood flooring, updated kitchens and baths, in-unit laundry and individual heating and air conditioning systems. The units were fully occupied at the time of sale.
By leveraging his extensive network of buyers, including those targeting North Side investments, Feldman was able to arrange 25 tours that resulted in six written offers. The prospective buyers included both in- and out-of-state investors, including buyers from the coasts, who continue to be interested in Chicago’s neighborhoods.
The sale of the Arthur Avenue property translated to a capitalization rate of 6.9% percent, delivering a higher first-year return than many assets in more centrally located submarkets despite the strong per-unit price that was realized.
2035 W. Arthur is located less than 10 miles from Chicago’s downtown, accessible via Lake Shore Drive, the CTA Red Line or Metra UP-N line. In addition, it is a short walk from the No. 155 bus route along Devon Avenue, as well as Chicago’s Little India district, featuring a range of shops and restaurants.
Interra Realty, a Chicago-based commercial real estate investment services firm, today announced it brokered the $3.84 million sale of a four-building, 27-unit portfolio that includes assets on Chicago’s Far Northwest Side and in the nearby suburb of Harwood Heights. The price equated to $142,370 per unit, the highest to date per CoStar for the submarket, which is less than 10 miles from O’Hare International Airport.
Interra Senior Managing Partner Joe Smazal and Director Colin O’Malley represented the seller, Chicago-based Steel City Management. Interra Managing Partner Patrick Kennelly and Director Paul Waterloo represented the confidential buyer.
The properties included 4904, 4916 and 4932 N. Harlem Ave., each offering 6,000 square feet and located in the same block in Harwood Heights, and 3025 N. Harlem Ave., a 6,450-square-foot building located less than 3 miles south in Chicago’s Montclare neighborhood. The buildings are all three stories and include a mix of one- and two-bedroom apartments, which were 100% occupied at the time of sale.
“These recently modernized apartments have been very well-received in this submarket,” said Waterloo. “As a market-leading product -- with higher interior finish levels than standard for the area -- and with full occupancy, they reflect the strong appetite for stabilized buildings in this location, offering the buyer immediate economies of scale.”
Steel City had purchased and fully renovated the properties over several years, upgrading all plumbing, HVAC and electrical, adding new doors and windows, and modernizing all bathrooms and kitchens with new quartz countertops, cabinetry and appliances.
"Our goal is always to transform dated properties into fresh, modern apartments that will appeal to today’s renters,” said Brett P. Holmes, managing partner of Steel City Management. “With this particular portfolio of properties, we identified a neighborhood where there was demand, but not a lot of competition, for apartments of the finish level we typically achieve through our renovation process. We quickly found that local residents were happy to pay our marginally higher rents for a better living experience. Those market dynamics make this a smart investment for the new owners.”
In addition to O’Hare, the properties offer proximity to CTA and Metra rail stations; the No. 90 bus, which services Harlem Avenue; and several expressways. Nearby shopping and entertainment destinations include Harlem-Irving Plaza, Fashion Outlets of Chicago, the Parkway Bank Park at Rosemont entertainment district, Rosemont Theatre and Allstate Arena.
Interra Realty, a Chicago-based commercial real estate investment services firm, today announced it brokered the $7.8 million sale of a 14-building, 289-unit portfolio of affordable apartments located primarily on Chicago’s West Side. The buyer, Chicago-based real estate investment firm Villa Capital Partners (VCP), purchased the portfolio from Chicago-based nonprofit NHS Redevelopment and plans to spend about $3 million to renovate the properties, which will remain affordable under a seven-year contract with the city.
“This is one of the largest West Side transactions of its kind in recent years and reflects the broader push for the preservation and rehabilitation of affordable units throughout the city,” said David Goss, co-founder and managing principal of Interra. Goss brokered the deal with Jon Morgan, also a co-founder and managing principal of Interra, and Lucas Fryman, a director at the firm.
Founded in 2005 by Erik Hubbard and John Pagone, VCP focuses on building wealth in underdeveloped and emerging communities throughout Chicago and the Midwest. The firm has managed the affordable housing portfolio since December 2015 and will continue to do so as owner.
“Because we have operated these communities for over three years, we were already ‘invested’ in them and saw an opportunity to use our familiarity with the buildings, and the residents who call them home, to make thoughtful improvements in conjunction with our extension of their affordable housing contracts,” said Hubbard, managing principal of VCP. “As a company, we are committed to the health and revitalization of all of Chicago’s neighborhoods, and this investment directly aligns with that mission.”
The buildings are located in Chicago’s Austin, East Garfield Park, West Humboldt Park and North Lawndale neighborhoods on the West Side, and in Roseland on the South Side. All but one of the properties is vintage; the community in Roseland is about 20 years old. As a whole, the portfolio comprises a mix of one-, two-, three- and four-bedroom units.
A newly released report from DePaul University’s Institute for Housing Studies found that the number of affordable housing units in Chicago is in decline, with the share of affordable units in the Humboldt Park/Garfield Park submarket, which includes North Lawndale, dropping by 5.3 percentage points between 2012-14 and 2015-17. In Austin, the share of affordable units dropped 6.2 percentage points in the same time period. The declines put further pressure on low-income households and are likely accelerating their exodus from Chicago, the report says.
