Austin buyer shells out premium $71.4M for rare Chicago-area apartment complex

High per-unit price for 1986 complex shows draw of older properties with rehab prospects

Buyer CEO Nitin Chexal, of Austin-based Palladius and 100 Forest Place (LinkedIn, 100 Forest Place)
Buyer CEO Nitin Chexal, of Austin-based Palladius and 100 Forest Place (LinkedIn, 100 Forest Place)

An Austin buyer shelled out $71.4 million for a Chicago-area apartment complex, paying a premium over recent suburban multifamily trades to acquire a 234-unit property in Oak Park.

Palladius Real Estate is entering suburban Chicago’s multifamily market with its purchase of 100 Forest Place from Denver-based Air Communities at an implied value of $305,000 per unit, well more than the $167,000 per apartment other large complexes in Chicago’s suburbs fetched this year.

“We like Chicago a lot,” Palladius CEO Nitin Chexal said. “Our goal here is to continue to acquire product in Chicago. We’re big believers in the metropolitan area. We view the path of growth as continuing to move west, toward Oak Park.”

The deal extends the Chicago area’s hot streak for large suburban multifamily assets, with the market drawing buyers of both brand new high-end apartments as well older mid-market units, like the 309-unit Edenbridge in suburban Tinley Park, a complex built in the 1970s that just sold for $34.3 million. Built in 1986, the per-unit value at 100 Forest exceeded that of the Winfield Station property, which had construction finished in August and was sold last week in DuPage County’s second-priciest multifamily deal this year.

The Oak Park complex’s allure was its high number of townhome-style apartments for suburban Chicago properties nearby commuter train lines, with 144 units in a tower and 90 adjacent two-bedroom townhomes, all with their own patios and in-unit laundry appliances included in the deal.

The large number of townhomes on the property is “very rare in a walkable transit-oriented development,” said Pete Evans of Berkadia, which represented the seller.

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Multiple buyers from the Chicago area and elsewhere expressed interest because of the metro area’s “strong fundamentals” and the property’s “exceptional durability of revenue,” he said.

The property offers easy access to Whole Foods, Trader Joe’s, Target and 30 restaurants within a three-block radius, and is a 15-minute train ride from the Loop, Berkadia said.

Since 2009, 1,272 new luxury apartment units have been built within four blocks of 100 Forest on five properties, with an average rent of $2,300 per unit, or $2.70 per square foot, the brokerage said. The gap in rents for 100 Forest and those averages is $550 per unit and 60 cents per square foot, which “presents a clear opportunity for immediate and achievable rent growth,” Berkadia said.

The 100 Forest sale follows the $111 million sale of a 662-unit property in suburban Rolling Meadows that marked a 54 percent gain over its 2017 purchase price, and this year’s $137 million sale of the 1,155-unit Glen Ellyn Crossing complex to Los Angeles-based Turner Impact Capital, which netted an 80 percent profit for the seller, Chicago-based Rockwell Property, and set a record for Chicago’s suburbs.

Palladius scored a $60.4 million mortgage for its purchase of 100 Forest. The property was last mortgaged for $35 million under Air’s ownership in 2018, Cook County records show.

“We think there is a lot of opportunity to acquire value-add product in the Chicago area that might be overlooked,” Chexal said.

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