Chicago senior apartment complex in Montclare sells for $40M

City’s senior facilities gaining interest after pandemic slowed market

Montclare Senior Residences at 6650 Belden Ave. (iStock, Montclare Senior Residences)
Montclare Senior Residences at 6650 Belden Ave. (iStock, Montclare Senior Residences)

An affordable senior housing complex in Chicago’s western Montclare neighborhood sold for $39.9 million, another sign investors are bullish on age-restricted independent living properties.

The 335-unit Montclare Senior Residences of Galewood property at 6650 West Belden Avenue sold for $119,104 per unit, with the apartments consisting of one- and two-bedroom layouts. The units are reserved for people 55 and older who meet certain income restrictions.

The seller, Montclare Senior Residences, has four senior housing properties in Chicago. The buyer is an entity that shares an address with New York-based Greystone, the latest institutional investor to lean further into independent senior living. The Related Companies recently bought two affordable senior housing properties in West Palm Beach for $65 million at $196,970 per unit.

“I’ve been doing this 28 years and I think this is the best time ever you’ve seen in the market,” said Adam Heavenrich, head of Chicago-based senior housing brokerage Heavenrich & Co., which wasn’t involved in the deal. “You have an inflationary market, and you can push rents. Historically senior housing has been very sticky in terms of pricing. People are not going to move out if you raise the rent a little bit.”

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Interest in senior housing dropped during the health crisis as tenants left communal living situations to mitigate their risk of catching Covid-19. Occupancy in independent living facilities has started to recover, and real estate investors are taking notice.

“Occupancy hasn’t fully recovered yet but it will,” Heavenrich said. “The Baby Boomers are coming. That’s why I got into this business.”

Institutional investors have been more reluctant to put equity into skilled nursing facilities for seniors, which have been slower to recover from the pandemic in Illinois, he said, although Citadel bought one in a Chicago suburb last year for $15 million.

Investors were optimistic on senior housing even early in the pandemic, when communal living facilities of all kinds were eyed skeptically by many while the virus inflicted fear and infection upon their residents and workers, The Real Deal reported. CBRE values the industry at $420 billion.

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