Rental market is down and tower owner wants out
548-unit Shoreham in Lakeshore East hits market amid falling Downtown occupancy rates
A 548-unit apartment tower in Lakeshore East hit the market, as owners continue to battle falling occupancy rates and rent prices across the city.
PNC Realty Investors, which oversees the Shoreham for owner AFL-CIO Building Investment Trust, hired CBRE to sell the building at 400 E. South Water Street, Crain’s reported.
The asking price was not known, but buildings comparable to the 47-story Shoreham have in recent years sold for around $350,000 to $500,000 per unit, per the report. Just one downtown rental tower has sold in the past year. In addition to a down market, the property also is saddled with $110 million in debt, according to the report, citing county records.
In January, an investment fund put its 1,061-unit Streeterville apartment complex, McClurg Court, on the market. It pegged a sale price at over $200 million — roughly $190,000 a unit.
Average rent in the city for a 748-square-foot unit stood at $1,860 in March, down about 6 percent year over year, according to RentCafe. Occupancy sank over the last year as well. In the third quarter, it dropped to 87.1 percent compared to 93.8 percent year over year. And in Q4, it slipped to 86.5 percent, the lowest in over two decades.
The Shoreham, where rent averages $1,900 per month, is nearly 94 percent occupied.
Some residential developers are still betting big. In March, a duo led by Fulton St. Companies proposed a 433-story rental tower in Fulton Market.
[Crain’s] — Alexi Friedman