Structured Development sold its 199-unit New City apartment complex for significantly less than what the firm was aiming, despite a strong demand market for rentals in Chicago.
An entity linked to The Gelman Companies paid $75 million for the development located at 1457 North Halsted Street, according to property records filed Tuesday. The property was built by Structured, Bucksbaum Realty Properties and JPMorgan Asset Management.
AIG Investments provided a $50 million acquisition loan.
Gelman, based in Washington, D.C., owns and manages office, retail, industrial and multifamily properties. Michael Miller, principal at Gelman and commercial real estate firm Foxhall Partners, signed for the deed and mortgage.
Structured Development and its partners hired Eastdil Secured in early 2019 to sell the apartment portion of the mixed-complex, in hopes it would fetch north of $90 million. Structured’s J. Michael Drew told Crain’s at the time that it was not clear if or when the retail portion of the development would be up for grabs.
It was not immediately clear if just the residential tower sold or if other parts sold as well. But if just the apartment portion sold at the $75 million sale price, the deal comes out to about $377,000 per unit.
Neither party immediately responded to requests for comment.
Despite an expected 8,000 new apartment units coming online in Chicago in the next three years, demand for rental units has been robust, especially in Downtown, where Class A building occupancy rates recently ticked up to 94.3 percent.
The New City complex opened in 2015, and the joint venture built the project on the former site of the Cabrini-Green public housing complex, which was demolished between 1995 and 2011. Last year, Strive Logistics inked a 20,000-square-foot lease at the new development.
Structured is in the midst of developing The Shops at Big Deahl, a 3-acre mixed-use complex near New City that would have apartments, retail and office space.