Hubbard Street decides not to sell “legacy asset” Wicker Park Connection

UPDATE, April 30, 4:30 p.m.: Hubbard Street Group decided not to sell its Wicker Park Connection apartment complex, opting instead to refinance the development with plans to hold on to it for the long term.

Chicago-based Hubbard Street in mid-April secured a $64.7 million loan on the buildings at 1640-1664 West Division Street, Cook County property records show. The lender was CBRE Capital Markets.

The loan comes seven months after Hubbard Street hired CBRE to market the multifamily complex that spans two buildings and includes 207 units. But earlier this year, the firm decided to pull the property from the market, opting instead to capitalize on low interest rates on a well-performing asset, Hubbard Street Managing Partner John McLinden said.

Hubbard’s Wicker Park Connection comprises two buildings: a 61-unit mid-rise at 1664 West Division Street and a 146-unit high-rise at 1640 West Division that was delivered in 2018. Units range from studios to three-bedrooms starting around $2,000 per month. The complex was about 80 percent leased in November, Hubbard told The Real Deal.

The complex’s ground-floor tenants include a 12,800-square-foot Target and the city’s first Philz Coffee, which will open in the summer.

While Hubbard Street decided to hold the asset long-term, McClinden also said the institutional investors that have poured money into Chicago’s multifamily market are “putting the brakes” on spending here. He cited changes coming to the property tax assessment system and the slew of progressive tax proposals as reasons the investor market is cooling.

“A lot of the institutional investors are saying, ‘We’re taking a wait-and-see attitude … until we see what’s going to happen with the new mayor and the new assessor,’” McLinden said.

The Wicker Park Connection isn’t the only property Hubbard recently moved to sell. The firm in August listed its 45,000-square-foot office building in River North, with an asking price of $30 million. Hubbard Street also found a buyer for its 94-unit building known as Centrum Bucktown, according to Crain’s.

Hubbard Street also is behind the 123-unit residential portion of the Field Lofts redevelopment at 4000 West Diversey Avenue, and the firm led a joint venture in the acquisition and planned redevelopment of an Oak Lawn shopping center that was anchored by Kmart.

This article has been updated with comments from Hubbard Street’s John McLinden.