Equity Investment Group refinances Old Town apartment complex with $51M loan

An entity tied to Sam Zell took out a new mortgage on the 297-unit Cobbler Square complex

Cobbler Square apartments and Sam Zell
Cobbler Square apartments and Sam Zell

The Equity family of companies might be unloading Chicago real estate, but it’s reinvesting in at least one city property.

An entity tied to the Sam Zell-led firm secured a $51 million loan from Wells Fargo on its Cobbler Square apartment complex last month, according to Cook County property records.

The property at 1350 North Wells Street was a Dr. Scholl’s shoe factory until 1989, when it was converted into 297 loft apartments with 22,000 square feet of retail space, according to SMNGA, the architecture firm that oversaw the project. The complex comprises 425,000 square feet of total interior space.

In 2016, Wells Fargo lent $16 million to the owner, listed in public records as Cobblesquare Place Associates. The present-day value of the complex is unknown, but it was valued at $61.1 million at the time the owner took out a nearly $40 million loan on it in 2010, records show.

Equity Residential does not list any Chicago properties in its public portfolio, nor are any Midwest locations listed among the 10 metro areas where the firm is “buying now,” according to its website. Company founder Sam Zell has been vocally bearish on the Chicago market.

Zell cashed out of the city’s office market completely last year, when Equity Office sold the O’Hare-area Triangle Plaza office complex to the Shidler Group in a $143 million deal.

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But Philip Tinkler, chief operating officer for Equity Group Investments, signed last month’s mortgage on behalf of Cobblesquare Place Associates, records show.

The Cobbler Square complex is managed by Chicago-based investment firm Waterton, according to its website. It leases studio, one-bedroom and two-bedroom apartments starting at $1,735.

The main building’s retail tenants include an Insomnia Cookies, Cafe Sushi restaurant and a Pure Barre fitness center.

Chicago-based Equity Residential posted a 14 percent year-over-year bump in its funds from operations last quarter. In an earnings call this week, CEO Mark Parrell chalked up the REIT’s success to strong rental demand in New York and Boston.

Representatives of Equity Investment Group did not immediately respond to requests for comment on Thursday.