As South Shore booms, local investor seeks a big payout on 4-building portfolio

The firm is seeking over $16 million for its Jeffery Towers portfolio

Jul.July 29, 2019 12:15 PM
The Jeffery Towers portfolio

The Jeffery Towers portfolio

Another local investor is seeking to cash out of a surging South Shore multifamily market.

Chicago real estate firm 5812 Group has listed for sale its Jeffery Towers portfolio, a group of four apartment buildings totaling 208 units. The firm is seeking $16.2 million for the portfolio.

The buildings are grouped together near 71st Street and Jeffery Avenue in South Shore, a South Side neighborhood that has seen a swell of development and investor activity.

“They want to capitalize on the activity in South Shore,” said Jack Cassin, managing broker for Apartment Investment Advisers, which is marketing the portfolio. “There’s a lot of momentum.”

The buildings for sale include the 49-unit 7144 South Jeffery Avenue, the 38-unit 7147 South Jeffery Avenue, the 56-unit 1962 East 71st Place and the 65-unit 7130 South Jeffery Avenue. Two of the buildings have ground-floor retail space, and a 34-space parking lot would be included in the sale, according to marketing materials.

5812 Group founder Adam Walls bought the portfolio for just over $7 million in 2014, Crain’s reported at the time. Walls’ firm recently injected $2 million in capital improvements to the portfolio, including facade improvements, unit rehabs and elevator work, Cassin said.

The portfolio is about 90 percent leased, Cassin said. About half the units are set aside for subsidized renters. Half the units are also family sized, an apartment type that has become increasingly out of reach for renters of modest means.

5812 is looking to seize not only on a strong Chicago multifamily market but also renewed interest in the South Side, Cassin said. Neighboring Hyde Park has seen multifamily development that has raised rents and pushed some to other areas, including South Shore.

The planned Obama Presidential Library will likely further investor interest in South Shore. Prolific artist Theaster Gates is also working to develop an incubator for creative businesses in South Shore, and Kanye West has donated $1 million to the redevelopment of the neighborhood’s Avalon Regal Theater.

Cassin said the Jeffery Towers portfolio could be attractive to outside investors looking to get in on the ground floor of a resurgent South Side. Earlier this month, a San Francisco-based firm paid $16.8 million for a 22-unit portfolio in South Shore. In May, a New York firm listed a trio of South Shore apartment complexes with an asking price of $20 million.

“South Shore seems to be the best value play,” Cassin said. “The single sight gives investors outside of town an opportunity to increase their [local] portfolio and be their anchor property.”

5812 Group bills itself as a “mission-based” real estate investor, Cassin said, and seeks to invest in under-served communities in the city.

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